Although risk managers in 2007 enjoyed the biggest average salary boost in the past three years, they need to brace themselves for the inevitable fallout from a struggling economy and should not depend on the softening commercial insurance market to establish their reputations and preserve their departments, the head of the profession’s top placement service warns.
Indeed, although the soft market might provide a welcome, though temporary cushion against the impact of an economy increasingly in distress, over the long run risk managers must prove their worth beyond the benefit of temporarily falling insurance premiums, according to Bill Perry, president of New York-based Logic Associates.
“Risk managers cannot afford to become complacent,” he told National Underwriter. “This is no time for them to rest on their laurels. With the economy in a rut, everyone’s job is on the line and everyone’s department is on the spot, including the risk manager’s.”
For the moment, however, risk managers are basking in the glow of a big boost in their pay scale last year. Logic’s “2007 Risk Management Compensation Survey” revealed an average salary of $187,215 for the 1,317 risk managers filling out the questionnaire—a 30 percent response rate.
That’s a steep 6.6 percent raise in the average salary over 2006—beating the prior year’s gain of 4.8 percent, and more than double the 3.2 percent hike for 2005.
Bonuses for all risk managers surveyed averaged $19,688 in 2007—up 5.7 percent, down slightly from the 6.7 percent bonus boost the previous year. However, when combining salary and bonus, the average risk manager’s total cash compensation last year topped the $200,000 mark for the first time, up 6.5 percent to $206,902.
The Logic Associates report was co-sponsored exclusively by National Underwriter, and for the sixth-consecutive year was based on a survey of NU’s risk manager subscribers.
For the first time, risk managers at one of the company-size survey categories—the biggest, with those at firms generating sales of over $15 billion—topped the $300,000 salary plateau, with the 95 respondents at such organizations averaging $311,803 in salary, which was 7.3 percent over the prior year. Adding in an average bonus of $44,917—up 6.9 percent—the total cash compensation for risk managers at the biggest companies averaged $356,720, a gain of 7.2 percent.