Risk Register Correlation Modelling

Correlated Risk Registers Provide More Realistic Business Risk Costs

Course Summary

Risk Registers can tend to over bloat the actual portfolio of risk costs. Correlation Modelling attempts to link certain risks to others and, in doing so, reduces the overall Risk Cost to more realistic values. This advanced course is paramount for any business whose risk registers have or are growing to a size such that Risk is affecting a companies ability to provide a cost benefit, or simply helps a business to more realistically manage their risks.

The course is an extension of the Risk Register Modelling course. It has drawn upon experience and examples from both Private Finance Initiative (PFI) and Public Private Partnership (PPP) tender processes. The approach is equally applicable in any Business or Corporate environment.

Duration

Course Duration: 1 day (9.30am – 5.00pm)

Participants: 10-12

Objectives

Participants of this course will come away with the following:

• Understand and describe the concepts of Risk and Uncertainty
• Understand the how to attribute uncertainty to Risk monies
• Determine correlations between Risk monies
• Implement Monte Carlo Simulations
• Identify and prioritise critical Risks
• Create realistic risk portfolios
• Target risks for mitigation or transfer

Audience

Participants will include:

• Senior managers who are responsible for managing risk and/or embedding effective systems of corporate governance
• Bid Managers and Team Leaders who are responsible for identifying risk, both qualitatively and quantitatively during a bid process
• Insurance managers, project investors, brokers, safety practitioners, auditors, project managers, accountants, solicitors and consultants who are increasingly finding risk management is forming part of their remit or are expected to have a broad understanding of the subject
• Individuals taking up a new role in risk management or wishing to enter the profession
• Practitioners who require a refresher on recent developments in risk management 
• Students studying or about to embark on studying Practical and Enterprise Risk Management
• Chief executives and heads of departments who require a better understanding of risk management and the role it should play within their organisations
• Non executive directors

Outline

Risk Registers

• The purpose and content of a Risk Register
• Portfolio approach to Risk Management
• Types of Risk Registers
• Risk Register templates
• Risk quantification, qualification and mitigation
• How a Risk Register contributes to effective risk management
• Identify critical Risks

Risk and Uncertainty

• Meaning of Uncertainty
• Why model uncertainty in relation to Risk?
• Using three-point estimates for activities
• Cost uncertainty
• Types of uncertainty modelling techniques
• Excel-based Monte Carlo simulation

Risk Correlation

• Meaning of Risk Correlation
• Why correlate Risks?
• Impact of Risk Correlation
• Types of Correlation Models: Historical Models, Average Models, Factor Models
• Risk output analysis