Estimating Risk: A Management Approach
 
Andy Garlick's book explores the role of quantitative techniques in modern risk management. Risk management has grown in importance in most organisations in the last 20 years, but in many remains simply a matter of processing lists of risks and actions. Andy argues that this fails to make the most of the techniques available and that organisations can improve their risk decision making by using risk models.

His book describes a broad range of modelling techniques, all illustrated with business-relevant examples. The role of the models in decision making is also discussed with particular emphasis on what the risk premium - the price people charge for taking risk - is and should be.

In order to provide a self-contained account the underpinning material from probability and decision theory is also included, so the book will provide a handy reference guide for all practitioners. The discussion is consistently informal and the book provides a critical view of the accepted wisdom in risk management. This book will enable managers and their specialist advisors to improve thier approach to risk whilst removing the mystique.

For more information, see some sample chapters and to order the book you can visit the publisher's website and quote reference G8APP25 to claim 25% discount on the recommended retail price. (You have to go to the checkout, register and enter G8APP25 as the 'Promotional code'.)

The following sections give you a more detail of the contents.

Part I: Risk Management Overview
 
This part of the book is aimed at the general reader. First it describes the context for risk and then provides a brief introduction to risk management. This sets the scene for the introduction of quantitative risk models which underlie the practical examples of how they can be used. This enables us to answer our 4 key questions:
  • what is quantitative risk estimation, and what do you need to know?
  • when should you do it, and when not?
  • how should you do it, and how not?
  • how do you make the decision?

    One of the examples is a waste management PPP. More details of this are included on our technical page.

  • Part II: Risk Models
     
    The aim of this part is to illustrate the range of risk models which can be generated. These include reliability models, cost models, schedule models and more general decision models.

    The cost models include a detailed description of the waste management PPP and you can visit the technical page to understand its detailed working.

    Part III: Decisions and Risk
     
    Because risk models are used to support decision making, Part III talks about how this works in both the public and private sectors, and for safety.

    The topics covered include public sector appraisal (the Green Book, optimism bias, time preference), investor expectations (and what they actually get), risk-based safety regulation and much more.

    Part IV: Techniques
     
    Finally Part IV provides the underlying basics of risk modelling, including probability theory, Monte Carlo in theory and in practice, decision analysis and some other useful methods.

    Because Monte Carlo is the most common way of calculating risk models we have created an easy-to-use spreadsheet Natural Monte Carlo which you can download from our software page. The technical page has some of the results.

     
    For more information, see some sample chapters and to order the book you can visit the publisher's website and quote reference G8APP25 to claim 25% discount on the recommended retail price. (You have to go to the checkout, register and enter G8APP25 as the 'Promotional code'.)
    If you can see only this page, go to the complete Risk Agenda website.