Annualized loss estimates were used in briefings with State Civil Defense and the City of Honolulu Executive Branch, Legislative Branch, and Departmental briefings to measure the relative economic importance of particular natural hazards.  These annualized loss calculation were also used to prioritize mitigation actions by quantifying the benefits from reduced annual loss costs resulting from proposed mitigation projects.
AAL = ΣLi x Pi
Li = Estimated Loss for Event i
Pi = Annual Probability of Event i
Description: Sum of the expected loss for each event
(i.e., sum of the products of the estimated loss from each event and that eventís rate of occurrence)

Analysis of the Relative Risk of Natural Hazards in the State of Hawaii

Risk calculations based on expected economic losses were conducted to objectively evaluate the priorities for pre-disaster hazard mitigation planning for the State of Hawaii and the City and County of Honolulu. 
This probabilistic assessment of relative risks of natural hazards estimated the Average Annualized Loss (AAL) for each hazard, which is an objective measure of future direct economic losses averaged on an annual basis.  Through this methodology, the expected frequencies and severities of natural hazards can be compared on a common economic frame of reference.