Baromètre AMRAE 2011-ERM specialists earn more than insurance managers

The 2011 edition of Baromètre AMRAE, a survey published every two years, has also found that professionals who are responsible for the implementation of enterprise risk management policies earn higher salaries than their insurance focused peers. In fact, those who are only responsible for ERM, and not insurance, tend to be better remunerated even than their colleagues who have both areas under their wings the survey says. Higher paid, better placed ERM specialists, however, still represent a minority in the profession. Less than one in every four risk managers surveyed have classified themselves in this category. Insurance-focused risk managers still constitute 45% of the total, while the newly arrived all-rounders who deal with both areas represent one third of all respondents. The survey was conducted by AMRAE and Deloitte with 106 risk managers at French companies, 45% of whom work for large firms with revenues of more than €7.5bn. The sample comprised mainly international companies (85% have operations outside France), and 44% of them have more than 40,000 employees on their payroll.hideThe survey, which will be officially presented this week during Les Rencontres d’AMRAE 2011, in Deauville, reflects the gradual progress of the risk management profession within French companies, but also some of the challenges that still lie ahead of them. For example, while French risk managers say they are often consulted by top managers about matters of strategy, they remain generally excluded from the higher echelons of their firms’ hierarchies. In fact, 64% of those surveyed reported that they are not even part of the operational risks committees in their organisations. The ratio reaches 67% in audit committees and 78% in risk committees at board level. The survey has also identified a relatively low level of preparedness of French companies to deal with the recent financial and economic crisis. Only 39% of the respondents said that crisis management is one of the functions that they perform in their daily activities. But even this ratio shows potential for progress, says the study, as crisis management emerges as one of a number of new areas that French managers have been asked to take responsibility for. Others include taking part in audits of acquisitions and improving business continuity plans. The study notes that the role played by risk managers is set to evolve towards greater participation in risk-related decisions at board level. In the future, we should see more Chief Risk Officers in French companies, the report suggested. For the moment, however, only 17% of those surveyed said that they are part of the first level of executives in their companies and report directly to their Chief Executive Officers or equivalent bosses. ERM-focused risk managers are the most likely to figure closer to the top management structures, the survey found. Risk management departments have not been depleted by cost-cutting measures implemented by French companies as they coped with the economic downturn in the two years since the last Baromètre was published. A large majority of respondents said that staff under their management have not been slashed since 2009, although additions did not take place. The authors of the study give the finding a positive interpretation, commenting that the resistance of risk management teams to staff cuts in hard economic times shows that the activity is firmly anchored in the organisation of French companies. The average French risk manager is a man who is more than 40 years-old and who began his career as an engineer or in the sales department. ERM-focused professionals are different. They tend to be younger, have a background in newer activities such as audit committees, and include a higher percentage of women. The survey may actually have identified a trend for female risk managers to play a more significant role in France. Among professionals under 35 years old, they constitute a majority of the sample, with 60% of the total. ERM-focused risk managers also make more money, with more than 60% of them earning wages of over €120,000 a year. This is attributed to the fact that these managers tend to be closer to the top managers in their companies, according to the survey authors. The most common salary range among insurance specialists is between €60,000 and €80,000 accounting for more than 35% of the respondents. About one out of every four of respondents earn more than €120,000 a year. Almost 40% of risk managers who are responsible for both ERM and insurance make €80,000 to €100,000 a year, while about 22% said they earn over €150,000. Variable remuneration is an important part of their compensation packages, amounting to 10% to 20% of annual pay for 54% of the total, and more than 20% for a further 17%. In many French companies, current risk managers are the first to implement the function in their organisations, as 48% responded that they took the job as the function was created. The survey points out that a growing number of risk managers have been recruited by head-hunters (23%, compared to 16% in 2009), although the most common path to the job still is an internal promotion, with 35%. The survey has also concluded that French risk managers are reasonably upbeat about their future. Most of the respondents believe that the function will gain relevance or at least stabilise within their companies. Many are also optimistic that their current duties will, in the end, prove to be a launching pad for further incursions to the top management of their organisations. A total of 17% expect career advancement in the financial department of their firms, while 16% see themselves more involved in the compliance department, and 15% in the main executive office.

Baromètre AMRAE 2011-ERM specialists earn more than insurance managers

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