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 costbenefit analysis for specific intervention proposals government of nepalministry of home affairs accessed may