The first is probabilistic risk modelling to estimate average annual loss and the second is based on potential climate scenarios. The estimate is a weighted average of the expected loss from every disaster event, given its probability of occurrence - the average annual loss (AAL). An AAL calculation involves three components: hazard modelling, exposure and vulnerabilities, and risk estimations. It uses both historical experiences and modelled predictions to give a comprehensive picture of what can be expected. Policymakers can use this for DRR financing budgets, designing risk reduction schemes and carrying out cost-benefit analysis for specific intervention proposals. Government of Nepal/Ministry of Home Affairs (accessed 21 May 2015).