Charles Crispin on Types of Assets for Risk Assessment
Charles Crispin always begins his client consultations with a brief discussion about risk assessment and management. As president of Evergreen Re, one of the most respected consulting firms for managed-care facilities in the country, Crispin had numerous opportunities to work with companies that are in the verge of taking certain risks with reinsurance. In the course of his work, he had come into the conclusion that clients were likely to choose the better option – which is not necessarily the safer or the more potentially profitable choice – if they clearly understood what risk assessment and management involved. More specifically, Crispin wants to make sure that his clients have reasonable expectations from such analysis and to accept the fact that risks are simply a potential form of change and are thus inevitable as well.
Charles Crispin defines risk to his client as the potential inability of a company to achieve its goal. As such, risks can be caused by one or more factors, the combination of which depends largely on the situation and all other elements involved. In assessing risk for a company, Crispin always reminds his clients not just to focus on profitable assets but also non-profitable or indirectly profitable assets as well. Ignoring them will cause the company to consider incorrect or inaccurate valuation. Firstly, there are the people making up the backbone of the company. They may not be “sellable” but they still have something important to contribute.
Property is next. Charles Crispin cautions his clients from only considering the market value of real estate property. They should also consider what it directly contributes to overall operations and how the company can be affected if it was lost. Moreover, Crispin also reminds his clients to consider other forms of property, such as intellectual and which may include trademarks and copyrights. He also lists non-material assets that may be difficult to value but play a contributing role to the company’s success as well. There is reputation for example. Reputation is incredibly difficult to purchase – almost impossible even – and it can be unfair how years of hard work building one’s good reputation can easily crumble with a single lie or deception. Nevertheless, all these make up the assets that are work considering for a risk assessment report.
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