The insurance industry is all about calculating and managing risk. Home insurance, life insurance, commercial business insurance, and auto insurance all calculate the risk and reward of these everyday issues. Risk management analysts are part of this process, and among the highest-paid security professions. Similar occupations include account managers, financial analysts, senior auditors, and underwriters.
Main responsibilities of risk management analysts:
- Compile data by researching and developing risk assessment portfolios for life, health, property, and commercial business to determine how to avoid and reduce risk.
- Research, learn, and understand compliance issues for policies that you recommend and develop.
- Develop and maintain good communication and collaboration skills with staff including managers, underwriters, and researchers, as well as with providers and claimants.
- Analyze incidents and claims for policies such as life and property and workman’s compensation to find causes of claims to determine validity.
- Assist with litigation by presenting analysis in hearings and trials.
What Does a Risk Analyst Do?
The risk analyst role will vary depending on the organization, and encompasses all areas of risk to the employer organization. In Marquette University’s description of the Roles and Responsibilities in Risk Management, the risk manager works with cooperation from departments and divisions to “identify and analyze the financial impact of loss.”
The role is responsible for risk management and insurance budgets and allocating claims costs appropriately, as well as maintaining records of insurance policies and claims, and reviewing major contracts. This is done in cooperation with the university’s general counsel to manage insurance and claims and contracts in the best interests of the university.
The risk manager there deals with workers compensation, certificates of insurance, automobile forms, background checks, and reimbursement of loss. The role works to “mitigate the adverse effects of loss” and expands to include internal audit and “anything that can prevent the company from achieving its objectives.”
The university takes an aggregate view of risk, listing risks to include changing interest rates, receivables, operational risks like labor strikes, management changes, and loss of reputation. Marquette has a risk assessment committee that uses an enterprise risk model to monitor the organization’s overall financial state.
How to Become a Risk Manager
The path to becoming a risk manager starts with a bachelor’s degree in areas such as business or accounting. It can include professional certification such as Certified Management Consultant or RIMS-Certified Risk Management Professional. Professional certification provides a competitive advantage in the job market, enhances professional reputation, and provides advanced knowledge and resources to support professional development.
According to the Association of Certified Fraud Examiners (ACFE), other valuable professional certifications for risk management include the Certified Fraud Examiner (CFE), Certified Risk Analyst (CRA), Certification in Risk Management Assurance (CRMA), Financial Risk Manager (FRM), Professional Risk Manager (PRM) and/or Certified in Risk and Information Systems Control (CRISC).
According to the Bureau of Labor Statistics (BLS), a bachelor’s degree is the typical requirement for risk management analysts, but some employers prefer advanced degrees like a master’s in business administration. Risk managers have degrees in business, management, finance, computer and information science.
Risk Management Career Path
According to ACFE, there are various career paths to a risk manager career.
- Accounting – a degree and experience in accounting can lead to a career in risk management as a government accountant protecting taxpayer funds, a public accountant with a role in auditing and fraud detection, or a forensic accountant uncovering suspicious and fraudulent activity.
- Auditing – auditors work to ensure compliance and uncover fraud and loss whether in an internal or external capacity.
- Governance and Compliance – understanding government and compliance requirements and laws helps businesses and institutions avoid loss through costly fines and litigation.
- Investigation – investigators in all segments work in risk management to uncover wrongdoing that causes loss; whether it’s police detectives, FBI agents, business security detail, or private investigations, investigation plays a big role in risk management.
Salary for Risk Management and Job Outlook
A career in risk management has a high satisfaction rate. According to Payscale, the average risk manager salary is $86,538, with a range of $56k through $129k, the higher ranges for those with years of experience. This is reflected in employer risk manager salaries from Microsoft $122k, Capital One Financial $121k, and J.P. Morgan Chase $118k. Bonus and profit sharing and commission figure into risk manager compensation.
The BLS anticipates job growth in the field of risk management at about 16 percent through 2028, faster than average for all occupations. With high profile data breaches and identity theft increasingly in the news, risk management is a necessity in all industries.