How to Become a Risk Manager

Risk management is an essential part of the finance and insurance field that focuses on identifying, evaluating, and prioritizing a variety of risks related to the organization. Risk managers are highly trained professionals that supervise programs to minimize risks and losses that may occur within an organization.

What does a risk manager do?

Risk managers oversee a variety of risk management programs to reduce risks and losses that may occur from business operations and financial transactions. They assess the exposures of the organization and control activities using a variety of means such as transference and avoidance. They make executive decisions on how to best limit the risks and losses of an organization by using a variety of techniques to limit the organization’s exposure to prices changes of currency and commodities. Risk managers also calculate and limit the possible risks associated with operations.

What kind of training does a risk manager need?

Risk managers typically need at least a bachelor degree in risk management, finance, or other related field. Many have a master degree in business administration with focus on risk management. Prospective risk managers typically complete courses in finance, risk theory, insurance, and profit prevention and loss. Many aspiring risk managers complete internships to gain practical experience in the field. Many employers provide some on the job training to enable new risk managers to learn the necessary policies and procedures. Many risk managers gain professional certification through organizations such as the American Risk and Insurance Association or the Public Risk Management Association. Risk managers must complete regular continuing education to maintain their certifications, keep their skills up to date, and stay abreast with advancements in the field.

What are the prospects for a career as a risk manager?

Employment of risk managers is expected to grow as fast as average for all professions, increasing 8% from 2008 to 2018 (1). The growth and expansion of the financial industry and regulatory changes will drive job growth.

Job prospects are expected to be good with strong competition. Risk managers with professional certification and extensive experience will have the best job opportunities. Some job openings will arise from the need to replace risk managers that retire, transfer, or leave the profession for other reasons.

How much do risk managers make?

As of February 2010, the middle 50% of risk managers earn annual salaries between $81,399 and $113,155. The top 10% earn annual salaries of more than $128,592 (2).

A career as a risk manager is an excellent choice for individuals with a strong interest in risk management and overseeing a variety of tasks. Risk managers must have a solid understanding of the concepts, policies, and procedures related to risk management. Patience, analytical thinking, good problem solving skills, and excellent leadership skills are essential characteristics. Risk managers must have excellent communication and interpersonal skills and the ability to effectively work under stress and pressure and make effective decisions.

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