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How Do I Become a Risk Analyst?

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  • Originally Written By: M.C. Jones
  • Revised By: C. Mitchell
  • Edited By: Lucy Oppenheimer
  • Last Modified Date: 29 November 2016
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Becoming a risk analyst isn’t usually something that happens instantaneously, but rather requires a bit of planning and anticipation — candidates usually have to have a combination of specialized training, certification, and experience in the field before they’re able to assume analyst duties in full. People hoping for a career in this area usually need to be prepared to start work at a lower level, often as an assistant or trainee. Getting a degree is usually a first step. Some universities actually offer degrees in risk management, often at the graduate level, but depending on the circumstances degrees in finance, business, computer science, and law can be substituted. Once you’ve graduated, you’ll need to work on building your professional network and honing your expertise. There are a number of different specializations; analysts can work in finance, in the corporate realm, or for insurance companies, to name a few. Though the work in each is similar, it requires slightly different skills that can usually only be gained through hands-on experience. Being willing to work your way up to progressive responsibility is essential.

Understanding the Field Generally

A risk analyst, also known as a risk manager, identifies risk or risk behaviors through the help of actuarial tables and other helpful information. Armed with this information and analytical skills, he or she will predict possible outcomes and make suggestions to improve those outcomes.

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These sorts of professionals are really valuable in a range of different settings, and as such you’ll typically have a lot of different options when it comes to specialization and area of work. The training and expertise needed for different branches tends to be a bit different, though. As such, work experience in, say, the insurance realm determining risk associated with homeownership policies won’t necessarily equip you to work within an international corporation looking at the risk of fraud. Knowing what you want to do or at least having a vague sense of where you want the career to carry you can help get you started on the right path.

Required Education

While requirements vary among companies that hire analysts and governments or regulatory bodies that regulate risk analysts, in most cases, to become a risk analyst, you'll have to have a bachelor's degree and certification in the field. While the bachelor's degree of a risk analyst can usually be in any discipline, degrees in business, finance, or law are typically preferred. Some job descriptions may waive this requirement if equivalent job related experience can be shown. Additionally, some degrees are helpful in terms of reducing the typical requirements for certification.

Certification and Training

In addition to a degree, most businesses in the United States that employ risk analysts, only hire certified risk analysts. In the US, that certification is granted by the American Academy of Financial Management. The AAFM also has providers in Asia and the Middle East, as well as Great Britain. If you want to become a risk analyst, you should research certification requirements for the geographic and professional area you are looking to get into. Other risk analyst certifications are also available, including financial risk manager certification and the chartered financial analyst certification.

Different Job Possibilities

There are a variety of types of risk analysts. The difference generally centers on the field in which the analyst operates. A financial risk analyst, for example, would be well informed about financial regulations and analyze investment losses and the market generally. With this knowledge and information, he or she would be better able to offer an educated opinion about investment decisions. An insurance risk analyst, or underwriter, on the other hand, typically works for insurance companies to assess the collective risk of its insured members to protect the company against financial loss.

A specialized risk analyst could benefit from membership in a professional group that caters to his or her field. For instance, someone who evaluates credit, market and operational risks may benefit from being a member of the Risk Management Association. These professional associations may require a fee in return for the educational, research, career, and networking opportunities they provide. The organization may also help its members pass the certification exams, and most also provide a range of networking opportunities that can help you make connections in your area of interest.

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Discuss this Article

Bertie68
Post 2

Being a financial analyst carries a lot of responsibility with it.

You might be hired by a large corporation to be one of their financial analysts. Among the many job descriptions, you will research, do analysis and give investment ideas to the company. You are essentially a "fortune teller" as it is so difficult to predict the economic changes.

Another part of your job would be keeping tabs on the company's sales, costs,and tax rates.

You would be involved in researching the whole industry and looking at market competition. There's a lot of analysis of patterns and trying to make prediction.

At least a bachelor's degree and certification with regular refresher courses is needed in this field.

PinkLady4
Post 1

A career as a risk analyst sounds interesting. I think the insurance field would be particularly fascinating. I'm sure it would be intriguing to research and find out the risk behavior that would reflect on client's use of insurance.

Once you pinned down the risky behavior that was going on before insurance claims, I assume the insurance company would adjust their premium so they can continue to make a profit.

Another positive aspect of the job is the networking and belonging to a professional group. This cooperation is usually a great part of any job.

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