Risk managers: are you being paid enough?

More than half of Asia-Pacific’s heads of insurance and risk earn more than US$150,000, as do one-third of its risk managers. This is one of the key findings from the 2015 StrategicRISK Asia Risk Report benchmarking survey.

Furthermore, more than half of the region’s chief risk officers earn more than $250,000, compared to only 17% of the region’s heads of insurance and risk.

Perhaps surprisingly, the survey indicates that 37% of the region’s risk managers earn less than $100,000 while 51% earn between $100,001 and $200,000.

Michael Page Financial Services risk and audit consultant Tom Gibbons told StrategicRISK that the best pay for risk professionals in the region was currently available in Hong Kong (“for financial risk, due to equities risk and access to Chinese stock”), as well as Japan and the Philippines (“for operational and insurance risk”).

Hong Kong-based Gibbons added that he anticipated salaries for current employees to rise by 3-7% over the next 12 months, but a staggering 20% for external hires. This would be driven by continuing changes in regulatory requirements across the region, he pointed out.

Furthermore, Gibbons said, Chinese financial services institutions had restructured total compensation packages to offer candidates a much larger bonus component to attract talent as they executed their aggressive growth strategies.

“They are phasing in rolling payments over three years, thus attracting and retaining some of the best talent in the market,” he said.

PARIMA board member and senior vice president of risk management at Hong Kong-based telecommunications company PCCW Limited David Ralph said he would expect to see only minor upward movement in the salaries of risk managers in the coming year, “as many companies are still not recognising the key strategic value of this role”.

“Looking further out, I would expect to see a more significant growth as the responsibility for ensuring risk management systems are in place becomes more important to the boards and senior management of each company,” he said.

Franck Baron, chairman of PARIMA and general manager for risk management and insurance at International SOS, told SR that he believed salaries would “move along with the improvement of the risk managers’ positioning in organisations”.

“In my eyes, this should be supported by a more strategic perception of top management regarding the role of risk management,” he said. “The efforts of PARIMA through initiatives such as our regional conference, though leaderships activities, and the up-coming certification and education programme should gear our professional community towards better recognition.”

Baron said that salaries were currently higher in Australia, Hong Kong, Japan and Singapore “based on their economic development, the national currency strength and the strong local corporate and financial institutions markets”.

Vietnam-based PARIMA board member Ly Xuan Thu said she only expected salaries to rise over the next 12 months if additional companies needed risk professionals to implement “more mature risk management activities in companies across Asia”.

“More banks now focus more on non-financial risks and they need two chief risk officers: one manages financial risks to comply with Basel regulations and another one focuses on non-financial risks to support the back office,” she said.

Thu added that she thought Australia and Singapore paid the best as “more companies in these countries are also are hiring CROs to run their enterprise risk management systems”.

More than 145 of the region’s top corporate risk and insurance managers took part in the salary component of the 2015 StrategicRISK Asia Risk Report benchmarking survey, sponsored by XL Catlin.

As part of the survey, respondents were also asked what they felt were the most important skills a risk manager needed to operate effectively.

The full results for this section of the survey will be published in StrategicRISK’s Asia Risk Report, an annual thought-leadership study examining risk management best practice.

This will be published and available for download next month at www.strategic-risk-global.com/asia.