It is crucial for any business to have a procedure that efficiently manages assets and risks. This is especially true in the financial sector, where insurers put the premiums they earn from policyholders in assets to generate revenue and keep solvency. Assets can be volatile, which is why it’s crucial for investors to be able to manage their investments effectively which includes knowing when to take more risk or lower risk to reach their goals.

A good asset and risk management system is also essential for energy and resource businesses to safeguard assets and maximize ROI over the course of their lifespan. This includes identifying and analysing the risks posed by the assets of an organization, including physical, such as equipment and buildings, as well as intangibles, such as intellectual property and data.

The first step is to identify and name its assets. Idealy, each asset should be given a name and a designated owner who is responsible and has authority over the asset. They are the ones who are most familiar about the risks that come with their assets and are able to reduce them effectively. These stakeholders should be consulted by the risk management department in order to determine the potential threats and vulnerabilities.

From there, a company should prioritize the risks identified. This is typically determined by the probability of the risk’s occurrence as well as the impact of each risk on the business. Priority risks should receive the most attention, including investments, and security implementation. Other risks need to be addressed based on the business’s operational requirements and regulatory compliance.

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