It is essential for every sector to have a system that efficiently manages assets and risks. This is particularly true in the financial sector, where insurers invest the money they collect from policyholders into assets to generate revenue and keep solvency. Assets are volatile, so it is essential that investors are able to manage their investments effectively. This means knowing when to take on more risk or less risk to reach their goals.
A sound asset and risk management system is also vital for resource and energy businesses to safeguard assets and maximize ROI over their lives. This involves identifying, assessing, and managing the risks associated with the assets of an organisation including tangible assets like equipment and buildings, as well as intangibles, such as intellectual property and data.
First, a company should identify and identify its assets. Ideally, each asset should be assigned a named owner who is accountable and has authority over the asset. These individuals are aware of the risks that are associated with their assets and reduce those risks effectively. These stakeholders should be consulted with the risk management department in order to determine possible threats and vulnerabilities.
The business is then able to decide on the most asset and risk management risky risks to be a priority. This is usually done based on the likelihood of the risk arising and its impact on the business. The most important risks need the greatest security implementation, investment, and attention. Other risks should be addressed according to the business’s operational requirements and regulatory compliance.