In every industry it is essential to have a well-functioning process for managing risk and assets in place. This is particularly true in the financial sector, where insurers rely on the premiums they collect from policyholders to invest in assets to generate revenue and ensure their viability. Assets can be volatile, and it is vital that investors take care of their investments. This includes knowing when to take on more or less risk in order to achieve their goals.
A sound asset and risk management system is essential for energy and resource companies to protect assets and increase ROI over their lifetime. This involves the identification, assessment, and managing the risks associated with the assets of an organization which includes tangibles such as equipment and buildings, as well as intangibles, such as intellectual property and data.
The business must first determine and name all its assets. Ideally, each asset should be assigned a named owner who is responsible and has authority over it. These individuals are aware of the risks that are associated with their property and can mitigate those risks effectively. The risk management department should work with these stakeholders in order to evaluate the risks and vulnerabilities that could be present.
The company can then prioritize the risks identified. This is usually based on the likelihood of the risk arising and its impact on the business. Risks that are most important should be given the greatest attention, investments, and security implementation. Other risks must be addressed based on the business’s operational requirements and regulatory compliance.