With today’s precarious financial market many companies, no matter the size, are investing in the services of a risk management consultant. Because companies are looking for ways to gain business and financial success without making bad decisions and large financial loss, few organizations make major decisions about new projects without first assessing the associated risks.
Risk management is the identification, assessment and prioritization of risks, or the uncertainty of objectives, with coordinated and economical application of resources to minimize, monitor and control the probability and impact of unfortunate events.
In simpler terms, a risk management consultant researches ideas and plans that a company has come up with that involve spending large amounts of money and/or resources to find out if the return on that investment would be worth it, and if the project is liable to pan out in their favor or not. It involves a large amount of research, planning, analysis and informed predictions on how the future financial market will play out in accordance with the specific type of industry the company is involved with.
Risk managers coordinate loss control systems for companies and organizations. This includes disaster recovery plans; emergency evacuations; purchasing of insurance programs; managing claims and loss control activities; managing relationships with third-party service providers including brokers and insurers; preparing loss analyses and budgets; and identifying exposed areas, recommending solutions, implementing approved programs, promoting loss prevention, updating and monitoring compliance with insurance necessities and managing safety and risk management manuals.
This position is solely focused on strategizing and planning in order to protect the assets of companies and organizations.
In order to be a successful consultant, one must have the following skills: a good understanding of business administration, retail sales and marketing; technical knowledge of the insurance industry; excellent communication skills; attention to details; ability to pivot and multi-task; project management skills; be able to gather analytics then write reports summarizing the details; an ability to be outgoing and self-motivated.
Many times they may have a specialty field with specific knowledge of a certain industry that will help them match up with companies who fall into these industries. Some of these industries include, but are not limited to: chemical manufacturing, mechanical engineering, civil engineering, manufacturing, environmental science, medical devices, information technology, and the pharmaceutical sector.
Along with having a bachelor’s or master’s degree in accounting, auditing or compliance and finance, earning a Certified Risk Manager (CRM) designation is an important step in becoming recognized as a specialist in risk management. The CRM is a professional designation for those working in risk management and fields such as financial, insurance, legal, accounting, claims specialist, and loss control. The CRM is earned by completing five courses, each two-and-a-half days, followed by completion of a 2-hour exam required for each course to earn the designation.
After the CRM is earned, there is an annual two-and-a-half day course completion necessary to maintain the designation. Some higher-level risk managers also have earned a CPA, or certified public accountant, designation as well.
There is also a professional development group dedicated to the this field. SRMC, The Society of Risk Management Consultants, is an international organization of professionals who work in the fields of risk management, insurance and employee benefits consulting. The goal is to advance these fields to benefits the practitioners, their clients, and the general public. This type of organization dates back to the early 1960s, showing that this field has been a valid business entity for many decades.