What is the primary purpose of risk assessment?

The primary purpose of risk assessment is to identify and analyze risks that may impact organizational objectives. This process involves systematically examining potential hazards or vulnerabilities that could affect the achievement of goals. The insights gained from this evaluation enable organizations to understand the nature and extent of risks they face, assess their potential impact, and make informed decisions about how to manage or mitigate those risks.

By focusing on the identification and analysis of risks, organizations can prioritize which risks to address based on their likelihood and impact. This enables effective resource allocation, leading to improved strategic planning and a stronger foundation for achieving objectives. A robust risk assessment process also fosters a proactive risk management culture, encouraging teams to engage in ongoing discussions about risk and resilience.

In contrast, increasing operational costs, complicating risk identification, or eliminating the need for ongoing monitoring would not support the fundamental goal of risk management, which is to enhance organizational resilience and ensure that objectives are met despite potential challenges.