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Free loss assumption worksheet

Annual loss expectancy calculator.

Prepared by ValtyUpdated

Annual event frequency × mean loss per event. Enter two assumptions to calculate expected annual loss (ALE). No signup or upload; your inputs stay in this browser.

Step 1 of 1: two required inputs

Enter your frequency and severity assumptions.

Your own assumption. Must be greater than zero — e.g. 0.5 means one event every two years on average.

Your own assumption for the average total cost across possible events. Must be greater than zero.

Shown back for reference only. Leave blank if not applicable; zero is allowed.

Free text, shown back as entered. Not used in the calculation.

Enter both required fields to see a result

Blank fields never compute as zero.

Your result will appear here

events/yr × USD/event = USD/yr

Enter an annual frequency and a mean per-event loss to see the one-line arithmetic result, before any commitment is requested.

Read the result correctly

Events per year × dollars per event = dollars per year.

Use an annual frequency, not a percentage: 0.8 events per year means eight loss events over ten years on average. Mean per-event loss should cover the defined scenario’s costs without double counting. A vulnerability count or the number of attempted attacks is not a loss-event frequency.

One consistent example

The fictional sample uses 0.8 events per year × $1,000,000 mean loss per event = $800,000 expected annual loss. Its separate 50,000-trial simulation estimates about $791,066. That small difference is sampling variation, not a different company or a hidden adjustment.

A mean is not a tail-loss estimate

This calculator cannot tell you P95, the chance of a loss-free year, or the worst possible loss. A single mean does not describe how variable outcomes are or how uncertain your inputs may be. See the loss-metric definitions.

Cost alone cannot establish return

An action cost is shown only for reference. Choosing an investment also requires its effect on frequency or severity, required work, the budget, and implementation constraints. Expected loss is not booked savings, an EBITDA adjustment, or an insurance premium.

Before using your own inputs, record their source, scope, collection date, and confidence. Use the data requirements checklist. To move from an ALE calculation to a funding choice, follow the worked investment comparison and board report template.

Next step

Want a full simulated worked example instead of one multiplication?

The sample decision memo runs a real Monte Carlo engine over a full loss distribution (mean, median, and tail) for one illustrative company and funding decision.

Request a platform demoRead the sample decision memo

Deterministic arithmetic on your entered numbers only — not a simulation, forecast, or audit opinion.