Asset Life Assessment for Risk-Informed Decision Making

Background

As part of a global asset risk management initiative, Whitecastle Engineering Ltd (WEL) was commissioned to conduct an Asset Life Assessment (ALA) of critical rotating and production equipment across two major refineries. The goal was to quantify end-of-life risks, evaluate operational vulnerabilities, and provide an objective basis for CAPEX planning and insurance risk profiling.

Objectives

• Identify and document failure modes with high safety or business impact.
• Estimate residual life and reliability trends of critical equipment.
• Quantify asset-level risk and establish a mitigation hierarchy.
• Enable insurers and clients to align capital investment with risk reduction goals

Method

• WEL’s systematic approach integrated engineering analysis with risk modelling, focusing on the following components:

  • Asset Condition Review
    Interviews with site engineers, maintenance plan reviews, and analysis of historical data, design documentation, and spare part logistics.

  • Degradation & Damage Mechanism Assessment
    Identification of dominant wear, fatigue, corrosion, and obsolescence risks, based on both qualitative and quantitative asset evaluations.

  • Risk Profiling
    Each asset was assessed using a structured risk matrix, accounting for likelihood of failure (PoF) and consequence categories (CoF): safety, business interruption, environmental, and financial.

  • Mitigation Strategy Development
    Practical, cost-effective mitigation actions were proposed to reduce overall risk exposure (RRFs) . Post-mitigation residual risk was also recalculated.

  • CAPEX Alignment & Investment Planning
    A forward-looking 20-year investment plan was created, prioritizing actions based on risk reduction potential and asset criticality

Results & Recommendations

• The client’s existing maintenance strategies were generally effective, but select high-risk assets required targeted interventions.
• WEL developed a prioritized mitigation plan to optimize the cost-benefit ratio of investment against risk exposure.
• A CAPEX roadmap was produced to support long-term resilience and insurance alignment.

Value to Insurance and Risk Engineering

• Provides insurers with a technical foundation to refine risk scoring and underwriting criteria.
• Informs site-level loss prevention planning and inspection focus.
• Strengthens the client’s ability to demonstrate duty of care and due diligence for operational risk.
• Enhances visibility of latent risks associated with aging or obsolete machinery.

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