Risk Probability is a fundamental concept within the PRINCE2 7 Risk Practice that refers to the likelihood or chance that a particular risk event will occur during the project lifecycle. It represents an assessment of how likely it is that an identified threat or opportunity will actually materiali…Risk Probability is a fundamental concept within the PRINCE2 7 Risk Practice that refers to the likelihood or chance that a particular risk event will occur during the project lifecycle. It represents an assessment of how likely it is that an identified threat or opportunity will actually materialise and impact the project.
In PRINCE2 7, risk probability is typically evaluated on a scale, which can be qualitative (such as Very Low, Low, Medium, High, Very High) or quantitative (using percentage ranges like 10%, 30%, 50%, 70%, 90%). The organisation or project will define the specific scale to be used, ensuring consistency across all risk assessments.
When assessing risk probability, project teams consider various factors including historical data from similar projects, expert judgement from team members and stakeholders, current project circumstances, and external environmental factors that might influence whether the risk occurs.
Probability forms one half of the risk estimation equation. When combined with the impact assessment (the effect the risk would have if it occurred), probability helps determine the overall severity or exposure level of each risk. This combined assessment enables the project team to prioritise risks effectively and allocate appropriate management effort and resources.
The Risk Register captures probability assessments for each identified risk, allowing the project board and project manager to make informed decisions about which risks require active management responses and which can be monitored with less intensive attention.
Regular reassessment of probability is essential throughout the project, as circumstances change and new information becomes available. A risk that initially seemed unlikely might become more probable as the project progresses, requiring updated response plans.
Understanding and accurately assessing risk probability enables project managers to focus their attention on risks most likely to affect project success, supporting better decision-making and more efficient use of project resources within the PRINCE2 framework.
Risk Probability in PRINCE2 Foundation V7
What is Risk Probability?
Risk probability refers to the likelihood that a particular risk event will occur during a project. In PRINCE2, probability is one of the key parameters used to assess and evaluate risks, helping project teams understand how likely it is that a potential threat or opportunity will materialize.
Probability is typically expressed using scales such as: - Very Low (less than 10% chance) - Low (10-25% chance) - Medium (25-50% chance) - High (50-75% chance) - Very High (greater than 75% chance)
Why is Risk Probability Important?
Understanding risk probability is essential because it:
- Enables prioritization: Risks with higher probability require more attention and resources - Supports decision-making: Helps the Project Board and Project Manager decide which risks need active management - Contributes to risk exposure calculation: Probability combined with impact determines the overall risk exposure - Informs contingency planning: High probability risks may need contingency plans or fallback positions - Facilitates communication: Provides a common language for discussing risks with stakeholders
How Risk Probability Works in PRINCE2
Risk probability is assessed during the Assess step of the risk management procedure. The process works as follows:
1. Identify the risk: First, the risk must be clearly identified and described 2. Estimate probability: Evaluate how likely the risk is to occur based on available information, historical data, and expert judgment 3. Use consistent scales: Apply the organization's or project's defined probability scale consistently across all risks 4. Calculate expected value: Multiply probability by impact to determine risk exposure 5. Record in Risk Register: Document the probability assessment in the Risk Register for ongoing monitoring 6. Review regularly: Probability may change as the project progresses, so reassessment is necessary
The Relationship Between Probability and Impact
Risk probability works alongside impact to provide a complete picture of risk exposure:
Risk Exposure = Probability × Impact
A risk with high probability but low impact may be less concerning than one with medium probability but very high impact. Both dimensions must be considered together for effective risk management.
Exam Tips: Answering Questions on Risk Probability
1. Remember the formula: Risk exposure equals probability multiplied by impact - this is frequently tested
2. Understand the scales: Know that probability is assessed using defined scales (Very Low to Very High) rather than arbitrary numbers
3. Know the context: Probability assessment occurs during the Assess step of the risk management procedure
4. Distinguish probability from impact: Questions may try to confuse these two concepts - probability is about likelihood, impact is about consequence
5. Consider both threats and opportunities: Probability applies equally to negative risks (threats) and positive risks (opportunities)
6. Link to the Risk Register: Probability assessments are documented in the Risk Register, which is a key management product
7. Watch for scenario questions: You may be given a scenario and asked to identify which risk has the highest probability or how probability affects risk response selection
8. Remember reassessment: Probability can change over time and should be reviewed at stage boundaries and during exception situations
9. Connect to risk responses: Higher probability risks often require proactive responses (reduce, avoid) rather than reactive ones (accept, share)