MBA Can Open Doors For Risk Managers

Risk managers, as prototypical knowledge workers, need to keepupgrading their education and skills to prosper in an increasinglycompetitive job market, the professions top placement specialistcontends.

The job is getting a lot more complicated, with many riskmanagers having to cope with Sarbanes-Oxley compliance demands andnew broker disclosure requirements.

“That means risk managers need to get up to speed and make suretheir skill sets are state of the art,” said Bill Perry, presidentof Logic Associates, the veteran risk management placement expertheadquartered in New York.

Logics “2004 Risk Management Compensation Survey,” co-sponsoredby National Underwriter, found that among the riskmanagers surveyed, very few have law degrees, despite the fact thatinsurance policies are contracts and claims often involvelitigation.

However, Mr. Perry said this is not a surprise, given theevolution of the profession into high finance.

“Many years ago, risk managers were usually insurance buyers andclaims processors, so it was more of a lawyers function. Somereported to the general counsel at their firms rather than theCFO,” he recalled.

“But with the growth of the profession over the years, now itsclearly a treasury and finance position,” he added. “Youd ratherhave a risk manager with an MBA in finance than one with a lawdegree. You hire lawyers to handle litigationyou dont need a lawyeras your risk manager.”

However, the survey found that while virtually all risk managershave at least a BA degree, not all have earned an MBA. In fact,even at the largest firms, no more than two-thirds possess anadvanced degree, while only 30 percent of risk managers at thesmallest-size firm category have an MBA.

The number of those with an Associate in Risk Management (ARM)designation is also far from an overwhelming majority. Only two ofthe eight categories surveyed show over half of the respondentswith ARMs.

“Theres definitely room for risk managers to grow here,” saidMr. Perry. “The better educated you are, the better chance you haveof moving up the ladder to bigger firms that pay highercompensation.”

Flag: Back To School

Head: RMs Still Have A Lot To Learn

In no company-size category do more than two-thirds of riskmanagers have MBAs, and at smaller firms the percentage is a lotlower. Even fewer have ARM designations.

Flag: FYI

Complete Copies

Of RM Compensation

Survey Report Available

Copies of the complete results from the “2004 Risk ManagementCompensation Survey,” including a far more detailed breakdown ofsalary and bonus averages by specific industry and stateeachsegmented by company sizemay be ordered for $95 from LogicAssociates Inc. at 67 Wall Street, 22nd Floor, New York, N.Y.10005.

Orders also may be placed by calling212-227-8000, or by e-mailing Logic AssociatesPresident Bill Perry at[email protected].

In addition, you may visit with Mr. Perry in Philadelphia duringthis weeks Risk and Insurance Management Society conference, atBooth 1124.

Reproduced from National Underwriter Edition, April 15, 2005.Copyright 2005 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.