The probability of loss risk is primarily based on what factors?

The probability of loss risk is primarily based on prior incidents and trends because historical data provides valuable insights into the likelihood of future occurrences. Analyzing past incidents allows organizations to identify patterns, potential vulnerabilities, and the frequency of events that have previously led to loss. This empirical evidence can help in quantifying risk, allowing security professionals to make informed predictions about future risks based on what has already happened.

While financial forecasts and projections, as well as employee feedback and sentiment, can contribute useful information in the risk assessment process, they do not directly measure the past likelihood of loss in the same way that historical incidents and trends do. Financial projections might address potential impacts post-event rather than the probability of an event occurring, and employee feedback might highlight areas of concern but does not provide the same quantitative analysis necessary for determining the likelihood of specific risks materializing. Determining risk probability relies heavily on concrete data derived from previous experiences, making the focus on historical incidents key in assessing potential future risks.