What distinguishes qualitative risk assessment from quantitative risk assessment?

Qualitative risk assessment is characterized by its reliance on subjective judgment to evaluate risks rather than on numerical data. This approach often involves gathering insights from expert opinions, discussions, or focus groups, where risks are assessed based on their perceived impact and likelihood rather than on measurable values. For instance, a qualitative assessment might result in categories such as low, medium, or high risk based on consensus or expert views.

On the other hand, quantitative risk assessment employs numerical analysis to evaluate risks, using data and statistical methods to calculate probabilities, impacts, and potential financial consequences. This could involve metrics like expected loss calculations, risk indices, or various statistical models.

The distinction between qualitative and quantitative assessments lies in their methodologies; qualitative focuses on subjective perspectives, while quantitative emphasizes concrete numerical values. This fundamental difference is what makes the assertion about subjective judgment in qualitative assessments and numerical analysis in quantitative assessments accurate.