A risk specialist generally assesses risk in a particular endeavor for the purpose of mitigating it. He or she may analyze statistical data, calculate the odds of potential risk factors, or measure the return on investment that risk reduction strategies have produced. Those who work in this area may also recommend procedures for avoiding risk through transfer to another party, or constructing a risk-reduction plan for an enterprise or undertaking. Both intangible and tangible risks may be managed by a person working within this field. Jobs involving risk mitigation span many areas, including finance, engineering, and transportation.
Minimizing risk through conducting a detailed analysis is a common task for a risk specialist. This analysis generally involves tabulating, sorting, and quantifying various aspects of an undertaking or endeavor. For example, if a business is investigating expansion of production facilities into a another country, a risk specialist may be tasked with calculating commonly expected risks of such an endeavor, as well as estimating the probability of less frequent events that could be catastrophic, if they were to occur. Risk factors may arise from human error, or as a result of the inherent underlying weaknesses in a system.
A risk specialist may analyze mechanical systems or, as is more often the case, the interface between human activity and some form of technology. For example, an automobile is a mechanical device that carries two types of risks: potential failures in materials and potential errors made by human operators. A risk specialist attempting to assess these combined risks in an automobile prototype would likely assess both types of risk, as well as anticipating how they might work together to produce a synergistic effect. Transportation systems often employ risk specialists in order to seek ways to reduce both human-caused accidents and failures in materials and processes.
Manipulating mathematical and statistical data is generally considered a crucial part of the job of a risk specialist. Once he or she quantifies the level of exposure to a risk, these risks can be ameliorated by various means. Strategies recommended may include expanding insurance coverage, increasing redundancies in processing systems, or instituting safety training for personnel. Sometimes, the risk specialist may recommend transferring risk to another party.
Most assessments of this type involve the interactions of people and processes or people and machines. As a result, risk reduction strategies often involve collecting historical and psychometric data, as well as calculating mathematical probabilities. Assessing psychological factors may also come into play for a risk specialist, such as in instances of financial system speculations where large numbers of participants may not accurately gauge risk factors. Some risk reduction specialists work to develop mathematical formulas that attempt to weigh the risks of different investment strategies.
