It is crucial for any industry to have a method that effectively manages assets as well as risks. This is particularly true in the financial sector, where insurers invest the premiums they collect from policyholders into assets to generate income and maintain the financial viability of their business. Assets are prone to volatility, so it’s essential for investors to manage their investments with care This includes knowing when to take on more risk or take fewer risks in order to achieve their goals.
A well-designed asset and risk management strategy is essential for energy and resource companies to protect assets and increase ROI over their lifetime. This involves identifying and assessing the risks that are associated with an organization’s assets – including physical, such as equipment and buildings, as well intangibles like intellectual property and data.
First, a company should identify and name its assets. Ideally, each asset named should have a person in the organization that has the responsibility and authority over it. They are the ones who are most familiar with the risks associated with their specific assets and are able to mitigate them effectively. These stakeholders should be consulted by the risk management department to assess possible threats and vulnerabilities.
Then, a business must prioritize the risks that are identified. This is typically determined by the probability of occurrence and the impact of each risk on the business. Priority risks must be given the most attention, as well as investment, and security implementation. The other risks should be addressed if necessary, while taking into consideration the business’s operational needs and regulatory compliance.
