What is the main difference between qualitative and quantitative risk assessments?

The distinction between qualitative and quantitative risk assessments fundamentally revolves around the nature of the analysis applied in each method. Qualitative assessments are characterized by their reliance on subjective analysis, which often involves expert judgment and descriptive evaluations to determine the level of risk. These assessments typically categorize risks based on their severity or impact without assigning specific numerical values, thus providing a more narrative form of risk assessment.

In contrast, quantitative assessments employ numerical values and statistical data, allowing for precise calculations of risk levels. This method focuses on quantifying risk in terms of potential impacts, such as financial loss or the likelihood of adverse events, enabling organizations to make data-driven decisions.

This difference highlights why the statement accurately captures the essence of what sets qualitative apart from quantitative assessments. Understanding these distinctions is crucial for effectively managing risk in various organizational contexts.