By STEVE YAHN, who has written for and edited national publications for more than 30 years
The world according to GARP is an ambitious one, but the Jersey City, N.J.-based Global Association of Risk Professionals is just one of many highly rated risk management professional organizations in the United States and elsewhere around the world.
"I like GARP because they combine traditional risk management issues with much more quantitative and qualitative matters than other groups," said Kevin P. Kalinich, Chicago-based national managing director, professional risk solutions, for Aon Corp. "They take almost a capital markets analysis approach, not just operational matters. They focus on credit risk, liquidity risk, larger issues like that. They cover broad issues, but they are more in-depth than most professional risk management associations."
Another knowledgeable observer noted that GARP, which has 120,000-plus members, has been most vocal on enterprise risk management issues.
The group is launching an Energy Risk Professional program in which it is hosting a series of discussions themed around energy risk management in major cities internationally.
In addition, the group's financial risk management (FRM) certification has been attracting great attention. More than 23,000 finance professionals have registered to take the FRM exam this year, up 70 per cent from a year earlier.
"The thing that struck me is the scope and extent of the certification," said a risk manager for an international entertainment company. "Specifically, the exams appear to focus on the actuarial and financial modeling aspect of risk management, which will be critical in developing our discipline beyond conventional insurance buying."
GARP was founded in 1996 as a networking outlet for financial risk managers to discuss and share ideas regarding risk-related issues. Quickly this evolved into an examination program, the offering of events and other means for individuals to interact globally. The exam was well received, gained traction and was expanded to become more robust, covering the depth and breadth of risk topics and metrics on a global scale.
While holding GARP in high regard, veteran risk management observer Felix Kloman, now retired after a distinguished career as a risk management consultant with Towers Perrin, noted GARP is heavily weighted to the finance sector. But Kloman likes the group's growth prospects.
"As the role of risk management expands, GARP will grow as well," he said.
Another of the largest global professional associations for risk managers is the Professional Risk Managers International Association (PRMIA).
"Like GARP, it has a strong finance bent," said one observer familiar with the international scene.
Also like GARP, he added, the organization has plenty of depth as well as breadth. "They are particularly strong in the area of enterprise risk management," one observer noted.
Established in 2002 by a volunteer group of risk industry professionals, the group is a not-for-profit group governed by a board of directors elected directly by its global membership.
The group, with 67,225 members in 197 countries, was created to provide a free and open forum for the promotion of sound risk standards and practices globally. PRMIA promotes cross-cultural ethical standards, serving emerging as well as more developed markets. The group, which works actively with other risk management professional organizations, holds 150 meetings a year through its local chapters.
WHERE RIMS FITS
Whereas GARP and PRMIA are heavily weighted to financial-realm risk managers, New York-based Risk and Insurance Management Society (RIMS) is "a big melting pot," said Mary Roth, the group's executive director. "We are not siloed. We are involved in all aspects of corporate risk. We have various types of members, but the majority are risk managers."
"The place to go is RIMS," said Rick Vassar, general manager of risk at Volkswagen Group of America Inc. "RIMS focuses on larger companies but others as well."
Roth said she speaks regularly with officials at GARP and PRMIA. RIMS has forged relationships with many other organizations as well.
"It is critically important that RIMS and its members recognize there is a vast melange of risk management associations out there, many of which have moved far beyond the now-limited origins of the insurance world," said one knowledgeable observer.
In response, RIMS' Roth underscored that her organization's central mission is to be the global leader in risk management.
RIMS has 10,296 members, 8,014 based in the U.S. and 2,282 internationally. RIMS in Canada is one of the organizations chapters.
RMA AND FIRMA
A U.S.-based risk management professional association that is well thought of is the Risk Management Association (RMA), a member-driven association that helps bank and nonbank institutions identify and manage the impacts of credit risk, operational risk and market risk on their businesses and customers.
The Philadelphia-based group, one of the oldest for risk management-oriented professionals, was started by a group of bankers who were informally exchanging credit information at a Salt Lake City hotel in 1913 and then decided to create a formal organization.
The following year, RMA held its first meeting of what was then called the Robert Morris Club. That meeting attracted 82 lenders. In 2000, the organization changed its name to reflect its mission to promote enterprise risk management.
Today, according to William Githens, president and CEO, the group has 18,000 members throughout North America, Europe and Asia/Pacific. As in the beginning, the group is membership-driven, with more than 70 percent of its revenue derived from providing products and services to members.
Another top-notch professional association in the finance sector is the Stockbridge, Ga.-based Fiduciary Investment Risk Management Association (FIRMA), a member-driven organization serving 800 risk managers and fiduciary officials at financial institutions throughout the United States.
The current president of the organization, Keith A. Bujalski, who is in the audit department at J.P. Morgan Chase & Co. in New York, said the group is celebrating its 25th anniversary.
The group's Web
site noted that as banks, trust companies, securities firms and insurance companies are allowed to affiliate with one another, they become more of a financial supermarket providing their customers with "one-stop" shopping, thus creating a need for cross-discipline professional standards.
Two of the group's main objectives are offering continuing educational opportunities for the maintenance of professional certificates, and maintaining ethical standards within the fiduciary and investment services industry.
THE PUBLIC-SECTOR GROUPS
In the public sector, a group that gets top marks is the Alexandria, Va.-based Public Risk Management Association (PRIMA), the only national association dedicated solely to practice of risk management in the public sector.
"PRIMA is a very heads up, well run association," said one well-placed person familiar with the group. "They have definitely tackled the challenge of enterprise risk management among other things."
PRIMA has 1,700 government-entity members in all parts of the United States. Members include risk management personnel, human resources officials, health and safety managements, claims managers and others in risk-oriented capacities.
Jennifer Ackerman, the group's senior manager of communications, cited four standout things that PRIMA has to offer its members:
-- It's annual meeting, with more than 60 educational sessions addressing such topics as safety loss control and school risk management.
-- PRIMA Cybrary, which puts up more than 2,500 risk-related documents available 24/7.
-- PRIMAtalk, an information and networking tool. This members-only listserve puts hundreds of industry specialists at the fingertips of PRIMA members.
-- Public Risk magazine, a 10-times-a-year publication.
The robust Public Agency Risk Managers Association (PARMA) is a California-based regional group dedicated to facilitating the exchange of ideas and innovative solutions with regard to risk management in government.
The organization was founded in 1974 by eight Bay Area government risk managers. Today, according to Bryant Newcomb, the group's president, PARMA has 400 public-entity members and 200 associate members in California and neighboring states of Washington, Oregon, Nevada and Colorado.
The leadership of PARMA, whether on the board or serving as officers of its six chapters, is made up of all volunteers. The group holds the second largest meeting for risk managers in public entities in the country (second only to PRIMA).
Like PARMA, a number of other state-oriented organizations for risk management professionals have their own associations, including Missouri, New York and Texas.
By all accounts, one of the finest professional associations for risk managers is the Bloomington, Ind.-based University Risk Management & Insurance Association (URMIA).
"URMIA is as well run an organization as you'll find anywhere," said a top university insurance and risk management academic.
Throughout the 1960s, several groups of university insurance and risk managers had started meeting informally in different locations, but it wasn't until 1969 that these groups joined together and formed URMIA.
The organization, which has 1,430 members throughout the United States and several overseas countries, primarily serves risk management and insurance professionals at colleges and universities.
The group has actively reached out to other organizations.
URMIA works with RIMS on the higher education agenda session at the RIMS annual conference, and the two groups meet at least once a year to explore opportunities to further collaborate.
The group also has a reciprocal relationship with PRIMA to offer sessions at each other's annual conferences, and they have collaborated on regional conferences with them as well.
Executive Director Jenny Whittington said that, with its strategic objective to become increasingly global, URMIA recently created a global task force to understand the risk of doing business abroad and sending and receiving students from all over the globe.
THE INTERNATIONAL SCENE
Beyond AIRMIC, GARP, PRIMIA and RMA on the international scene, there are plenty of other organizations abroad, both global, regional and local in nature.
A few other standouts include:
-- The Federation of European Risk Management Associations (FERMA) is made up of 20 European risk management associations, representing more than 4,800 members and a wide range of business sectors, including manufacturing, financial services, charities, health organizations as well as local government associations. RIMS is a member of FERMA.
-- The International Federation of Risk and Insurance Management Associations (IFRIMA), which was founded in 1984 to unite risk groups globally, including RIMS as a North American member. The group was formed to provide educational tools in the risk management area. It continues to do that, but it also fosters interaction of various sorts between the associations in the groupacross six continents.
-- The London-based Association of Insurance and Risk Managers (AIRMIC) is another top-notch player internationally is. "It is a terrific group," said a former top Marsh executive. "I always had a very favorable impression of them."
"I like it because it takes away the sales angle," said another observer with a global perspective. "It's not an infomercial. It's about information that risk managers need."
AIRMIC is a members' association for those persons responsible for the purchasing of corporate insurance or the management of risk within their organizations. The group has more than 800 individual members representing more than 450 companies in the United Kingdom and internationally.
Taking a big picture look at the world of professional risk management associations, Kloman, author of "The Fantods of Risk: Essays on Risk Management", observed: "What we've talked about does not include the many regional associations elsewhere in the world, nor does it include a large number of educational institutions that teach some sort of risk management, some of which have centers devoted to the subject, including the Center for Risk Analysis at Harvard, the Center for Risk and Regulation at the London School of Economics, and the Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania."
May 1, 2010
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