Parametric Risk Estimation is a statistical method used to assess the potential risks associated with uncertain events. It relies on predefined parameters, such as historical data and probability distributions, to estimate the likelihood and impact of various risks. This approach helps organizations make informed decisions by quantifying risks in a structured manner. By using mathematical models, parametric risk estimation simplifies complex risk scenarios into manageable figures. It is commonly applied in fields like finance, insurance, and project management, where understanding potential losses or gains is crucial for strategic planning and resource allocation.