In every industry, it’s critical to have an effective asset and risk management process in place. This is especially true for the financial sector, where insurers use the premiums collected from policyholders to invest in assets in order to generate revenue and maintain their financial viability. Assets are prone to volatility, so it’s important for these investors to manage their investments with care This includes knowing when to take more risk or lower risk in order to achieve their goals.
In addition, an effective process for managing risk and assets is vital for energy and resource companies to safeguard their assets and get the highest ROI over their lifespan. This involves identifying and analysing the risks posed by the assets of an organization – which includes physical assets such as equipment and buildings, and intangible, like intellectual property and data.
A company should first identify and name all of its assets. Ideally, each asset named should have an owner within the company that has oversight and responsibility over it. They are the most knowledgeable about the risks that come with their particular assets and can manage them effectively. The risk management department should collaborate with these stakeholders to identify the potential risks and vulnerabilities.
The business then has the ability to prioritize the risks that are identified. This is usually determined by the likelihood of occurrence and the effect of each risk on the business. Priority risks should be given the most attention, along with investing in security, and implementing it. Other risks should be considered in accordance with the company’s operational requirements and regulatory compliance.
