When considering likelihood, we might do some statistical analysis or even think in terms of percentages. A word of caution here though – statistically, a risk that occurs once or twice a year every year without fail can be shown to have an extremely low percentage probability, even though there’s a cast iron certainty that it’s going to happen again if we don’t do something about it (the case study on page 50 gives a real life example of this). So it’s not always helpful to try to be too logical or pseudo-scientific about assessing risk – common sense has an important role to play too.


Moreover, taking at face value statistical “evidence” that a particular risk is a 20, 50 or 100 year event (as seen in some insurance-related statistics) can be somewhat misleading. Just because a “20-year” event (such as a fire) hasn’t happened for 19 years, it doesn’t mean that one’s imminent. And just because we experienced a “100-year” event (such as a major flood) last year, it doesn’t mean that we’re safe for another 99 years (see the case study on page 22 for a real-life example).


So while it’s important to think about likelihood when assessing our risks, and whether we do so with or without the “benefit” of huge amounts of statistical or historical information, it’s really just a guess, albeit an educated one. Indeed, for certain types of risk – in particular the low likelihood, high impact risks – a sensible approach may be to focus more on the impact than the likelihood (see also “Contingency planning” on page 60). This approach is borne out by the fact that many of the high profile, disastrous events of recent times had never happened before and were therefore inconceivable to many before the event – but it didn’t stop them happening.


“We can’t get much better at predicting. But we can get better at realising how bad we are at predicting.”


Nassim Taleb, author CHAPTER 3 45


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