In risk assessment, what does "likelihood" refer to?

In risk assessment, "likelihood" specifically refers to the probability that a risk event will occur. This term helps practitioners evaluate how often a particular risk is expected to materialize, allowing them to prioritize risks based on their potential occurrence. Understanding likelihood is crucial for effective risk management, as it informs decision-makers about which risks may require more immediate attention and resources.

For example, if a risk is assessed to have a high likelihood of occurring, it may warrant proactive strategies to mitigate or manage the risk, whereas a risk with a low likelihood might require less immediate concern. By focusing on probability, organizations can allocate their resources more efficiently and develop appropriate response strategies.

Other concepts mentioned in the other answer options, like severity, potential losses, and time frames, are indeed important in the overall risk assessment process, but they pertain to different aspects of risk analysis distinct from calculating likelihood.