I agree We use cookies on this website to help us provide the best user experience. By browsing this site you agree to their use - more information is available here.

Barnett Waddingham
0333 11 11 222
Risk-reward optimisation is the process of using advanced statistical analysis to maximise returns while minimising risk. For companies, this improves strategic decisions and business profitability.

Companies want to achieve the best outcome for every action they take or activity they engage in. Risk-reward optimisation enables them to allocate capital and resources to achieve an optimal outcome. Managers can choose where to strike the balance between risk and reward, to meet their appetite for risk, with the least expenditure of time, effort, manpower and money.

Partnership approach

At Barnett Waddingham, we pride ourselves on our true partnership approach. Our risk specialists understand business and will work with you to embed the risk-reward optimisation framework into your key processes. This will enable us to help ensure you successfully satisfy your long-term business objectives in a cost-effective way.

Bespoke service

The way we help achieve your business objectives, improve strategic capital decisions and exceed your profitability expectations naturally differs from one company to another. We do not believe in a one size fits all approach, and we tailor our advice to suit you.

Barnett Waddingham graph demonstrating optimal Return On Capital / Marketing Spend

Calculating and quantifying uncertainty

As an example, a company may be considering how much money to invest in a new project. Using our stochastic risk-return optimisation techniques, with the aid of company and external data, we can not only calculate expected returns for every level of investment, but we can also quantify the uncertainty around these returns.

Determining your risk appetite

Our analysis would identify the spend which would give the most certain level of return, and the investment which should give the highest expected return.  Working with you to determine your risk appetite, you will be able to determine the spend appropriate for your business, predicting the expected return from this capital, and the level of uncertainty around this return.

Related knowledge and resources


  • Picture for How to manage the risk of Brexit
    How to manage the risk of Brexit

    If the UK votes to leave the EU on 23 June it could have a significant impact on your business. What, if anything, should companies be doing ahead of the referendum?

  • Picture for Dealing with uncertainty - a risk worth taking
    Dealing with uncertainty - a risk worth taking

    Decisions in the oil and gas industry – especially at the exploration stages are fraught with uncertainty. We are working with companies in this sector to optimise risk and returns in investment decision making using a range of quantitative techniques.

Updates delivered to you

Stay ahead with our latest comment, expert insight and event details.