RMs Must Expand Skills To Keep Jobs
Risk managers, whether still employed orvictims of the recession, need to beef up their financial skills,and perhaps even get a masters degree to improve their chances ofkeeping their position or landing a new post in this tough jobmarket, according to risk management experts.

“The hard [insurance] market is a blessing and a curse for riskmanagers with average skills,” said William Perry, president ofLogic Associates Inc., a risk management placement firm in NewYork. “It's a blessing in that it's keeping risk managers on thejob because they're needed more than ever. At the same time, therisk manager is under the microscope and his skill set might not beexactly what his company wants.”

Ultimately, Mr. Perry said, a risk manager who lacks the desiredfinancial skills or know-how could be pushed out of a job.

The skills desired by employers are “much more financiallyoriented,” he said. “Companies are looking for risk managers withskill sets that include the whole financial arena of riskfinancing, alternative risk-transfer and captives.”

Because of the complexities of the current insurance and jobmarkets, “all of this is very important,” he said. “A company ayear ago might not have cared about it, but today because of themarket, they care about it.”

Mr. Perry stressed that now is a good time for mid-level riskmanagers to reassess their skills. “I would tell them that if theynever thought of it before, it's time to enhance their academicbackground in terms of more finance courses,” he said. “If they'venever thought of going for their masters in finance, it's time theydid.”

An additional factor, he said, is therecession. “I'm getting 50-to-100 unsolicited resumes a day fromCEOs, CFOs and COOs who are out of work, which is a field that Idon't even handle,” he said. “I don't think the employment marketwill turn the corner for another six-to-nine months.”

Robert Hoyt, professor and head of the risk management andinsurance program at the Terry College of Business, part of theUniversity of Georgia in Athens, backed up Mr. Perrysobservations.

Although the school has seen an increase in students interestedin pursuing the field of risk management, “there arent as manyentry-level positions in risk management departments,” he said.

The schools research that profiles people moving into chief riskofficer or similar positions found that “those people, by andlarge, do possess that kind of broadened exposure base. They havehigher-degree levels of masters and even doctorate degrees,” hesaid.

Those filling high-level positions, he said, “possess a broadbase of skills. Were actually starting to see a pattern withpeople, such as the risk manager at Delta, who recently moved intoa CRO position. He has a broad base in terms of his experience withthe industry, but he also holds a masters degree and reflects thatkind of need to broaden your skill set as much as possible.”

Mr. Hoyt explained that many firms want risk managementemployees to be able to respond to whatever is going on in themarket, “and also its language,” he said. “Because of a lot of thedevelopments over the last six months, now risk management isgetting more attention at the level of the CFO and board ofdirectors. Now they want to have more conversations with regard torisk management.” Those conversations, he said, mean that riskmanagers “need to be able to converse in a framework” thatregisters with executives.

The CFO, he added, now wants to talk about “the companysoperation, profit and loss, their leverage, choices about capitalstructure, cost of capital, and they want that conversation in thecontext of discussing risk management for their firm,” he said.

Mr. Hoyt said the university keeps in touch with alumni andinvites companies to contact the school “if they need somebody withyears of experience for a job.”

During the past year, he said, the school was contacted by threeorganizations looking to place a second-in-command position in arisk management department. In all three cases, the companies werelooking for financial analysis capabilities, he said. “They werevery specific about wanting somebody with this upward mobility totheir background,” he emphasized.

The already hardening insurance market and the Sept. 11terrorist attacks were “important triggers” in terms of raising thebar for risk managers, he said. Another important factor isEnron.

“Even in the absence of Sept. 11, [Enron] would have had a bigimpact [on risk managers],” Mr. Hoyt explained. “Those two eventsare contributing to the much increased interest in what it takes todo risk management.”

Mr. Hoyt, however, added that there is still a place fortraditional risk management. “I think its more about how its goingto be housed and is there going to be another manager associatedwith risk that coordinates that,” he said.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, April 15, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.