Risk appetite and ratings
Define dollar thresholds and choose the statistic that turns simulation output into Low, Moderate, High, or Critical ratings.
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Define dollar thresholds and choose the statistic that turns simulation output into Low, Moderate, High, or Critical ratings.
Simulation output is a distribution; decision makers want a rating. The risk appetite bridges the two: you choose a statistic to rate against and dollar thresholds, and every result gets a Low, Moderate, High, or Critical badge.
Go to Settings > Workspace > Risk appetite.
Choose which statistic is compared to the thresholds:
Expected annual loss (mean)
P90 loss (1 in 10 year)
P95 loss (1 in 20 year) (default)
P99 loss (1 in 100 year)
Rating against a tail percentile (the default P95) expresses "we care about bad years", while rating against the mean expresses "we care about the long-run average". Pick the one that matches how your organization talks about appetite.
Set the dollar levels where the rating steps up:
Low
below Moderate
Moderate at or above
$250,000
High at or above
$2,500,000
Critical at or above
$25,000,000
A live preview scale shows the bands as you type, and validation keeps the thresholds in order.
Some scenarios warrant their own appetite, for example a scenario scoped to a small subsidiary. In the scenario editor, switch Risk appetite from Inherit to Custom and enter Moderate, High, and Critical thresholds for that scenario alone.
Ratings appear on the results badge, in the scenario table, and in generated reports, so aligning thresholds with your organization's actual appetite statement pays off everywhere at once.
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