In every industry it is essential to have a successful process for managing risk and assets in place. This is especially true in the financial sector, where insurers use the premiums collected from policyholders to invest in assets to generate revenue and maintain their financial stability. Assets are prone to volatility, so it’s important for these investors to take care of their investments which includes knowing when to take on more risk or lower risk to achieve their goals.
A sound asset and risk management system is also essential for energy and resource companies to protect assets and increase ROI over the course of their lifespan. This includes finding, assessing, and managing the risks that come with assets owned by an organization which includes tangibles such as equipment and buildings, as well as intangibles such as intellectual property and data.
The first step is to identify and identify its assets. Idealy, each asset should be assigned a named owner who is accountable and has authority over it. They are the most knowledgeable with the risks associated with their specific assets and are able to manage them effectively. The risk management department needs to work with these stakeholders to evaluate the possibility of threats and vulnerabilities.
From there, a business must prioritize the risks that are identified. This is usually dependent on the probability of their occurrence and the potential impact of each risk on the business. Risks with the highest priority need the greatest security implementation, investment, and attention. Other risks must be addressed based on the business’s operational requirements and regulatory compliance.