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Airmic, FERMA seek to certify risk managers

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LONDON—European risk management associations are looking at ways to put the status of risk managers on a par with other professionals such as lawyers and accountants.

The Federation of European Risk Management Assns. has embarked on a project to certify risk managers in Europe, while London-based Airmic Ltd. is seeking chartered status for risk managers in the United Kingdom.

Airmic and FERMA say they want to put risk managers on a level footing with other professions, and the New York-based Risk & Insurance Management Society Inc. says it is watching developments in Europe and continues to explore similar moves to raise the profile of risk managers in the United States.

There are several qualifications widely held by U.S. risk managers, but, while there is a chartered status for underwriters, there is nothing that would elevate risk managers to the same level as lawyers and accountants, said Richard J. Roberts, a RIMS board member and board liaison for RIMS' professional development group.

“RIMS looks continuously at how we can get to the point of a chartered risk manager, much like professions like accountants,” said Mr. Roberts. “The debate continues as to whether chartered status adds value, and we are reaching out to member companies to see if it would be recognized by senior management. If you build a program, you will want members to see value in it,” he said.

Mr. Roberts said RIMS wants to see how the efforts of European associations pan out, including Airmic's partnership with the London-based Chartered Insurance Institute, the U.K.'s professional organization for insurers and financial advisers.

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RIMS is not a certified body and does not have the resources to administer and test a certification process, said Mr. Roberts. “It would be a big undertaking, so partnering with another organization (as Airmic has done) is likely to be the best way forward, but we have not investigated that yet,” he said.

Brussels-based FERMA says it has established a working group to consider a pan-European certificate of professional competence for risk managers. The working group will present a plan at the 2012 FERMA Seminar in Versailles, France, on Oct. 22-23.

FERMA plans to issue two certificate types: professional and specialist. The professional certification would be aimed at senior risk managers and based on evidence of the risk manager's previous professional development and education. The specialist certification is aimed at newcomers and would involve formal education and examination by accredited organizations.

It is still early in the process, but FERMA is looking at how it can best deliver such certifications, which could see the organization partner with other groups to provide an internationally recognized accreditation, said Julia Graham, London-based chief risk officer at law firm DLA Piper UK L.L.P. and member of the FERMA working group.

Risk management has reached a level of “maturity” that deserves professional recognition, in particular given the increasingly complex risk environment and the developing role of insurance and risk managers, said Ms. Graham.

Independently, Airmic has been talking to the Chartered Insurance Institute about developing a chartered risk manager designation.

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Airmic has turned to the institute because it already has chartered status and has the scale to police the profession, as it already does for insurers and brokers, said John Hurrell, the association's chief executive. Airmic is acting only as the “catalyst” for the discussions and is not seeking to become the professional designation body for risk managers, he said.

Recognized, consistent qualifications and standards should help improve the profile of risk managers at the board level, said Mr. Hurrell.

The institute is empowered by the Privy Council—the governmental body that grants chartered status to a professional organization in the United Kingdom—to award chartered status to insurers and brokers, and has now requested to add chartered risk manager.

If successful, only a risk manager who meets minimum qualifications and commits to a code of ethics and appropriate continuing professional development would be able to use the title chartered risk manager, said a spokesman for the institute.

It is likely to take 18 to 24 months to receive approval from the Privy Council. A positive outcome is not assured, however, the spokesman said.

Qualifications and standards of member associations and professional bodies in individual European countries, such as the United Kingdom, could be recognized by FERMA's accreditation process, said Ms. Graham.

“We are all looking at the same issue,” said Ms. Graham of the work of FERMA, AIRMIC and RIMS to seek professional status for risk managers. Ultimately, the International Federation of Risk & Insurance Management Assns., of which RIMS and FERMA are both members, could be the forum for discussions on international recognition, she said.

The moves by Airmic and FERMA, should they succeed, would fill a gap, said Elaine Heyworth, London-based risk management consultant and director at Heyworth Risk Consulting Ltd. and former risk manager at banking group Barclays P.L.C.

“As a risk manager, I have found that credibility is lacking in our environment. Chartered status would raise risk managers status and profile. Professional recognition brings credibility,” she said.