Risk Manager’s role is also to analyze the risk. He will analyze the frequency and severity of the risk. If the risk is of low severity but it occurs frequently then it cannot be retained, same is the case when the severity is high and frequency is low. Therefore the risk manager will analyze the risk very carefully and then will decide on which risks can be retained and which could be transferred.
While analyzing the risk, the risk manager should investigate on the frequency of particular types of disasters, determining the predictability of disaster, analyzing the onset of disaster, determining the amount of forewarning associated with disaster, estimating the duration of disaster, analyzing the impact of disaster and its after effects, analyzing the consequences of disaster such as personnel availability, loss of assets, loss of operating capability etc.
To accommodate critical systems and functions including hardware, information, communication, personnel and services to determine the existing and required redundancy levels through out the organization is also included in the analyzing role of risk manager. Risk manager also analyze and estimate the potential loss in the currency value, this loss can occur due to increase in operating costs, loss of business opportunities, loss of financial management capabilities, loss of assets, negative media coverage, loss of stockholders’ confidence, loss of goodwill, loss of income, loss of competitive edge and legal actions.
The risk manager also analyzes the risk quantitatively and qualitatively. Impact and likelihood of the identified risk is assessed in a rapid cost effective manner by the risk manager in qualitative analysis. After having a qualitative analysis and studying the effects and impacts of the risk event and deriving a value will help risk manager to analyze the risk quantitatively. Quantitative Analysis is performed to quantify the effect of risk on overall project.