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Loss exceedance curve

Also known as: LEC

A loss exceedance curve plots, for every possible loss amount, the probability that losses over a period — usually a year — will exceed it. Read left to right: there might be a 50% chance of exceeding $200K, a 10% chance of exceeding $1M, and a 1% chance of exceeding $5M. The curve is the most complete single picture of a risk, because it shows the whole distribution rather than one point on it.

Exceedance curves are produced from a Monte Carlo loss model and are especially useful for comparing before-and-after states: a control that works should pull the curve down and to the left. They are also how insurers reason, which makes them a natural shared language between a security team and the people pricing its cyber policy.