Free tool
Annualised loss expectancy calculator
What a risk costs per year on average, from the asset's value, the share lost in one event, and how often the event happens. No account needed.
What the asset is worth to you, in euros.
The share of its value lost in one event.
0.5 means once every two years.
Single loss expectancy (SLE)
Asset value × exposure factor
€25,000.00
Annualised loss expectancy (ALE)
SLE × occurrences per year
€12,500.00
How to read it
The result is an average over many years, not a forecast: the event may not happen for years, and then cost far more than the annual figure. It is as reliable as its inputs, which are often estimates, so use it to compare options and to rank risks. Whatever the figure, the decision to accept a risk belongs to its owner.
Questions
- What is the ALE formula?
- ALE = SLE × ARO. The single loss expectancy (SLE) is the asset value multiplied by the exposure factor. The annualised rate of occurrence (ARO) is how many times per year the event is expected.
- What is an exposure factor?
- The share of an asset's value lost in one event, as a percentage. A flood that destroys a quarter of the equipment in a room has an exposure factor of 25%.
- What does an ARO of 0.5 mean?
- That the event is expected once every two years.
- How do I use the ALE to decide on a control?
- Compare the ALE before and after the control. If the reduction is larger than the control's yearly cost, it pays for itself. Legal duties apply whatever the result.