Risk classification is important as a pre-event tool to prioritize identified risks for further
treatment and to obtain attention and involvement of higher management levels to develop, resource and execute
actions to eliminate, reduce or control risk.
The basic questions are: how often can the unwanted event occur to trigger the sequence from hazard towards
consequences and what and how large could these consequences be?
Risk classification is also an important tool as a
post-event tool as part of the accident, incident and other unwanted event investigation.
The principle of dimensional value
The degree of management attention is directly related to the size of the problem
Determining the potential loss (= risk) is the objective of risk classification. The outcome of the
classification process helps to determine such issues including:
- setting priorities to deal with identified risks
- whether a team approach should be used (highly recommended) to contribute to risk control or unwanted event
- which persons should be on the team - operational, management, staff
- the management level of the chairperson of the team
- selecting risk control alternatives and making resources available
- assigning responsibilities to make sure that selected measures will be don correctly and in time
Two of the main tools to classify risks are:
- use of a risk matrix
- Fine/Kinney method
In principle, these methods are the same, both combining frequency of occurrence (of the accident, incident
and other unwanted event preceding the loss) with the potential loss. The main difference is that the Fine/Kinney
method combines an exposure factor with a likelihood factor to arrive at the frequency. So, if you want, the matrix
is 2-dimensional while Fine/Kenney has 3 dimensions.
Risk Classification correlates (1) the chance of occurrence of the event ("failure rate") to (2) the
A risk matrix could be simple form a 3 x 3 matrix (using frequency values such as: low, average, high and
potential loss values such as: minor, serious, catastrophic) or be more complex such as the 5x5 matrix shown
below and further explained in the accident investigation
Fine / Kinney
While the matrix example in the figure above shows a 2-dimensional approach, the method originally developed in
1971 by W. Fine (later publication in 1976 by G.H.F. Kinney) is 3-dimensional. It breaks down the failure rate into
- Failure rate
- Likelihood or probability (P) - the probability of occurrence of the unwanted event during the
- Exposure (E) - the frequency or duration of the activity concerned from which the unwanted event
- Consequences (C) - the possible consequences of the accident, incident and other unwanted event
The three aspects P, E and C are provided with value descriptions and factors allowing a numeric risk score
calculation - R = E x P x C. The Fine/Kinney method also provides a cost justification factor.
In case of considering a certain task of activity, the questions related to the failure rate would be:
- P - what is the probability that the risk will materialize during the execution of the task or
- E - how often will the task be performed? How often does the activity take place?
See under "risk management resources" to obtain the original Fine
document from NTIS.
Easy to use risk score and cost justification calculators can be obtained from SafetyRisk in Australia.
The Fine/Kinney method has an advantage over the risk matrix as it divides the failure rate or frequency of
occurrence into two factors. The Fine/Kinney method gives one more aspect to consider. Also look here for additonal information about the Fine/Kinney method.