A new holistic model of risk assessment: Towards an exhaustive conceptualization of risk elements

This research claims that real-life risk assessment nature is not linear as always has been the perception. It shows exponential-like growth behaviour. Risks – including those of natural and other disasters - have always been assessed by considering two aspects: likelihood of occurrence of an adverse event, and the potential unfavorable effects of that event once it occurs. This understanding has always been used both in theory and practice, but modern complexity of the world undeniably calls for more detailed all-encompassing models of risk assessment that consider other inputs to the risk perception on top of the two well-established aspects. To better assess the risks associated with various types of natural and man-made disasters; this article introduces a new risk assessment model – tagged as ‘holistic risk’ - that additionally includes possibilities of risk event occurrence escalation and acceleration, adverse event root causes early detection and potential control, adverse effects augmentation and propagation, robustness of the system, and exogeneous responsiveness towards the adverse event and its consequences. Logical reasoning arguments are furnished to introduce the new holistic understanding of risk assessment. These arguments are further used to develop a new mathematical model of risk assessment, which is then verified using a Monte Carlo simulation experiment. A new preliminary numerical scale of the holistic risk is further introduced for ease of use of the proposed new model.