Expected Loss Calculator

About this calculator

Expected loss is a core risk-management concept used to put a single number on an uncertain future cost: multiply how likely a bad outcome is by how bad it would be if it happened. In credit risk and banking, this is formalized as EL = PD × LGD × EAD (probability of default × loss given default × exposure at default), a framework baked into Basel banking capital rules.

Outside banking, the same probability-times-severity logic shows up in insurance underwriting, project risk registers, cybersecurity risk scoring, and business continuity planning — anywhere a manager needs to compare risks that differ in both how likely and how damaging they are, or decide whether the cost of mitigation is worth it.