Risk Aggregation

Aggregation of Risks to any Risk Groups

The aim of this task of a Risk Manager is to aggregate multiple risk functions in order to be able to assess them in line with the rules of risk management by Mehr and Hedges viability of the risks in their entirety for the enterprise (as in Rule 1: "Don`t risk more than you can afford to lose") and whether the risks borne are adequate to the respective profit potential (as in Rule 2: "Don`t risk a lot for a little").


Normally the „Monte-Carlo-Simulation“ is to be used for Aggregation of Risks. This approach is quite convenient for a few risks, but not for many risks.

Our Enterprise Risk Manager uses the analytical mathematical approach “Full Enumeration” to quantify recursively every possible combination of possible sizes of the risk functions, subject to aggregation. The key principle is that equivalent to throwing multiple dices, the total result may come about through varied combinations of dices. Applied to risk management, this means that a specific total potential damage for an enterprise results from different combinations of potential damage sizes from individual risks.


With the “Full Enumeration” it’s possible to aggregate any number of Risks! Automatically! In Seconds!