It is essential for every industry to have a process that effectively manages assets and risks. This is especially true for the financial industry, where insurers use the premiums collected from policyholders to invest in assets to generate revenue and maintain their financial viability. Assets are prone to volatility, so it’s essential for investors to take care of their investments which includes knowing when to take on more risk or lower risk to reach their goals.
A solid asset and risk management system is also vital for resource and energy businesses to safeguard assets and increase ROI over the course of their life. This includes identifying and assessing the risks that are associated with the company’s assets, which include physical assets, like equipment and buildings, as well as intangibles, such as intellectual property and data.
A business should first identify and name all of its assets. In the ideal scenario, each asset should have a person in the company that has the authority and responsibility for it. They are aware of the risks associated with their property and can reduce those risks effectively. The risk management department needs to work with these stakeholders to identify potential threats and vulnerabilities.
From there, businesses should prioritize the risks identified. This is usually done in relation to the likelihood of the risk arising and its impact on the business. Risks that are most critical should receive the greatest security implementation, investment and focus. Other risks need to be addressed according to the business’s operational requirements and compliance with regulatory requirements.
