The diverse experiences, career paths and responsibilities of nearly 500 risk specialists has been captured in one place giving the first profile of the risk management profession courtesy of The National Alliance Research Academy’s risk and insurance studies division.
The first edition of the Risk Manager Profile, available for download here, is based on a survey of 489 individuals about how they came to risk management. The profiles cover their education and training level; responsibilities; job rewards and difficulties; annual compensation, and what they feel to be the most important trends and opportunities currently facing the industry.
The Profile also contains ten in-depth interviews asking the risk managers of organizations including a coastal resort, public services for an Arkansas city and a major branch of the YMCA, to share their thoughts on the past, present and future of their career.
“We wanted risk managers to be able to compare their responsibilities and compensation with peers to help them with their own career planning,” says Jim Cuprison, research director for the report. “The survey is also useful to risk department managers to need help with budgeting, assigning responsibility, and improve the overall effectiveness of the department.”
According to the report, the majority of risk managers surveyed work for privately-held firms, make between $80,000 and $120,000 annually, and are 40 to 59 years of age. They come from a variety of backgrounds as diverse as teachers, professors, and attorneys who were introduced to their current profession through their previous careers.
“We saw that a lot of risk managers were 40 or older in years, having an advanced education and being many years into their career,” Cuprison says. “Often, these professionals work in another industry for 10 to 15 years, get an advanced degree, and then migrate to a risk position. It’s a growing profession where many educated, experienced individuals are gravitating.”
The survey found that a third of risk managers had at least an undergraduate business administration university degree along with an associate in risk management or certificate in risk management designation; although a quarter have no further specialized risk training.
A third of risk managers have had at least two decades of experience in the field. Many have been with the same employer for a decade or more.
The usual responsibilities of risk managers were found to be the administration of risk management policies and procedures, claims and litigation management, risk financing and supervising regulatory compliance. Surprisingly, only 31 percent of those surveyed were implementing enterprise risk management (ERM) into their workflow.
As for emerging trends in risk management, half of respondents claimed more proactive risk planning for the future; about as many said they will become more involved with strategic issues, and 41 percent say they will improve their attention to measure the financial impact of risk on the company’s profitability.
The greatest current challenges to risk managers are budget constraints, compliance and regulatory requirements, and economic conditions.