There are various approaches that can be used in assigning probabilities of acts of God. This includes drawing of risk impact/probability chart which helps the risk manager to decide which type of risks requires more attention. Scientific approach can also be used in assigning probabilities of acts of God.
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Scientific approach is an appropriate approach in managing risks and making decisions under conditions of uncertainty such as acts of God. Risk managers can also use lay people response to occurrence and probability of risks as a result of acts of God (Attar, 2010). As a risk manager, I prefer using risk impact/probability chart because it demonstrates both the probabilities of the risk occurring which ranges from anywhere just above 0% and below 100%.
The probability of risks associated with acts of God is also expressed. Additionally, the impact as a result of the risk is shown. The approach that cannot be used in assigning probabilities to acts of God is use of lay people response; this is because it is biased, unscientific and ill-informed approach.
. The source of valid data for estimating chances of a single act of God is history records that are already kept showing the frequency in which the events occurred in the past. From these records, the risk manager is able to estimate the chances of an act of God occurring in the present.
According to the concept of conditional probability, it argues that the probability of an event or outcome occurring is mainly based on the occurrence of a previous event or outcome. In risk management, conditional probabilities are mainly contingent on a previous result. In the exposure of due intelligence, I will apply the concept of conditional probability by multiplying the probability of the preceding event by the updated probability of the succeeding event.
Attar, H. (2010). The Scientific Approaches to Risk and Risk Management: A Critical Review. Retrieved August 16 from <http://scialert.net/fulltext/?doi=tasr.2011.386.393&org=10>See More on Management, Risk