For any business, it’s critical to have a well-functioning process for managing risk and assets in place. This is particularly true in the financial sector, where insurers invest the premiums they receive from policyholders in assets to generate revenue and ensure solvency. Assets are volatile, which is why it is crucial that investors take care of their investments. This includes knowing when to take more or less risk in order to reach their goals.
Additionally, a well-designed process for managing risk and assets is essential for companies in the fields of energy and resources to protect their assets and get the best ROI throughout their lifespan. This includes identifying and taking into account the risks associated with the assets of an organization – which includes physical assets, like equipment and buildings, and intangible assets, such as intellectual property and data.
A company should first identify and name all of its assets. The ideal is that each asset should have a person in the organization who has the authority and responsibility for it. These individuals are aware of the risks associated with their assets and are able to manage those risks effectively. These individuals should be consulted by the risk management department to evaluate the possibility of threats and vulnerabilities.
The company can then determine the risk that is most important to them. This is usually done based on the likelihood of the risk occurring and its impact on the business. Risks that are most critical need the greatest security implementation, investment and focus. Other risks need to be addressed based on the business’s operational requirements and regulatory compliance.