What is a Risk Assessment Tool? – Data Collection
A risk assessment tool allows data to be collected and analyzed to determine the probability of risk. It is essentially just a form that usually consists of yes or no questions that can be filled out and then a probability of risk can be assessed from the information. It is a tool that simplifies the process of risk assessment to determine anything from fire risk assessment, health risk assessment, and even mental health risk assessment. These risk assessment tools are primarily used by insurance companies but are also used by government agencies and many businesses including the stock market to determine many different factors. It may determine financial risk, health risk, risk of death or injury, or the possibility of property damage just to name a few. It is based on a scientific process to provide statistics of possible dangers involved to determine the risk involved. For instance the risk of skydiving may use statistics of accidents while performing this activity to determine a percentage comparatively to amount of deaths and injuries to assess the possibility of these events occurring. A similar process may be used for auto insurance by using the statistics of accidents by age groups and accidents in certain vehicles or how many deaths occur in it, and by combining the data they can assess the risk to give insurance rates based on this information. For example an older man in a vehicle with a high safety rating will have a much lower risk assessment than a teenager in a turbo charged sports car and will affect the rates that are offered.
