In any industry it’s crucial to have an effective asset and risk management process in place. This is especially true for the financial sector, where insurers make use of the premiums from policyholders to invest in assets in order to generate revenue and ensure their financial stability. Assets are prone to volatility, therefore it is important that investors are able to manage their investments effectively. This includes knowing when to take on risk or take a lower risk to reach their goals.
A well-designed asset and risk management system is essential for energy and resource businesses to safeguard assets and maximize ROI over their lifetime. This means identifying and assessing the risks that are associated with the assets of an organization – which includes physical assets like equipment and buildings, as well as intangible, like intellectual property and data.
The business must first determine and name all of its assets. In the ideal scenario, each asset would be given a name and a designated owner who is accountable and has authority over the asset. They should be aware of the risks associated with their assets and can reduce the risks effectively. These stakeholders should be consulted with the risk management department to review the possibility of threats and vulnerabilities.
The business then has the ability to decide on the most risky risks to be a priority. This is usually based on the likelihood of the risk happening and its impact on the business. The highest priority risks should receive the most security implementation, investment, and attention. Other risks should be addressed if necessary and while taking into account the business’s operational needs and regulatory compliance.