For utility companies a main obstacle to implement risk based asset management (AM) is the effort of understanding asset health and criticality. For life cycle costing optimization (LCO) of distribution networks a model of the current and forecasted breakage probability is necessary. Unlike for many other assets though a reliable model cannot be generated for distribution networks simply based on inspection and maintenance data, nor will a simple classification into 3 or 5 health classes be detailed enough to decide on future investment needs. OptNet® has been used to model failure functions for german distribution networks since the 1970ies. The ageing function used within OptNet is determined by up to 48 influencing factors. Evaluation of the influencing factors allows for the creation of individual ageing functions for every single network section. To adjust those to the actual local conditions they are subsequently calibrated using the known number of breakages. Only by calibrating the ageing functions is it possible to reach a level of precision that allows for realistic forecasts. Recent research allowed for example to include the influence of stray currents in the vicinity of trams based on electrical potential measurements or the impact of high pressures on asbestos cement pipes affected by changing groundwater levels. To assess criticality of single assets current hydraulic models allow for n-1 analysis also of distribution networks. Modelling each single household connection with the associated consumption documented by billing makes it possible to simulate how much water cannot be sold in case of breakages for each single pipe in the network. This paper will show how the combination of determining health and criticality for each single pipe in this way provides the setup of a reliable and transparent operative and strategic Asset Management Model in alignment with ISO 55.000.