In any industry, identifying and minimizing the impact of future threats is an important part of risk management. Insurance is one way to mitigate risks. It prevents companies from losing profit and product when a risk event occurs. That’s where insurance risk managers come in.
Insurance risk management is a fascinating and challenging field of work—one that is currently growing. If you’re interested in learning how to become a risk manager for insurance, you’re in the right place. Keep reading to learn more about the role—including duties, training, and salary—from these industry experts.
What is an insurance risk manager?
An insurance risk manager is responsible for assessing and managing risks that could impact an insurance company. Risk managers work with the carrier’s underwriters to identify potential risks, and then develop risk management strategies to mitigate them. Risk managers may also be involved in developing new products or services for the company, and may also be responsible for marketing those products or services to clients, says Tom Kelly, Chief Technology Officer at Life Part 2.
Insurance risk managers study a client’s insurance policies and evaluate potential risks management may face; they also try to identify future issues with claims.
“Companies with various insurance policies usually have a lot to protect, so they are more vulnerable to risks,” adds Linda Chavez, Founder & CEO at Seniors Life Insurance Finder. Insurance risk managers ensure that all company insurance policies are updated, and may suggest additional policies as needed.
What does a risk manager do?
An insurance risk manager is typically responsible for the following:
- Identifying possible scenarios which could lead to a financial deficit or litigation for the insurance company
- Developing strategies to protect the insurance company from the identified risks
- Evaluating insurance premiums
- Reviewing claims
- Offering advice on policy changes
- Recommending appropriate insurance policies for sufficient protection
What training and education does someone need to become an insurance risk manager?
One could arrive at a career in risk management via multiple paths. However, it is generally recommended that those interested in pursuing a career in risk management should have a degree in business or a related field. It is also important to have a strong understanding of risk assessment and risk management principles, says Kelly. There are various professional risk management associations and certification programs available which can provide additional training and development opportunities.
Most insurance risk managers have a bachelor's degree in risk management, insurance, business administration, or a related field. Many also have a master's degree in risk management or a related field. To be successful in this career, it is important to have strong analytical and problem-solving skills, as well as experience with insurance underwriting and claims processing. It is also helpful to be familiar with insurance regulations and have a solid understanding of financial concepts.
Currently, there are no formal qualifications for the role; most people interested in pursuing a career as a risk manager hold entry level positions and work their way up with on-the-job training. But most companies would require the minimum of a bachelor's degree in risk management, actuarial science or something very closely related.
What are the salary and job opportunities for insurance risk managers?
The salary range for insurance risk managers is very broad. The average is around $90,000 per year, although some experienced professionals can earn more than $200,000 per year. High-earners typically have a Master's degree in risk management at minimum, and work for large, top-tier organizations. Similar to salary, the opportunities run far and wide, too. Insurance firms of all sizes tend to have their own risk managers in-house, as do most large independent corporations.
Most insurance risk manager jobs are located in large cities. New York City, Chicago, and Los Angeles have the most opportunities. There are also many jobs in cities where insurance companies' headquarters are located, such as Hartford, CT; Philadelphia, PA and Atlanta, GA.
Becoming a risk manager for insurance isn’t for everyone, but for those who have an insurance background and strong problem-solving and analytics skills, becoming a risk manager is a career path with the potential to be highly rewarding. By assessing and managing risks that could impact an insurance company, risk advisors play a crucial role in our industry –it’s their expertise that (in part) helps ensure that agents are able to offer customers competitive rates on everything from auto to home to life insurance products.
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