Risk Management and Insurance Major

A risk manager is responsible for allocating an organization’s resources to maximize value amidst future uncertainty. The risk manager must strike a critical balance between the strategic upside and potential downside of risk. Responsibilities involve analyzing and advising the organization on navigating risks such as strategic, legal, financial, technological, ESG, operational, and reputational, among others. Risk managers need outstanding communication skills to convey risk-based goals within the organization that appeal to a wide range of employees from the board of directors and corporate executives to entry-level employees.

Insurance injects capital into the economy by absorbing risk efficiently and effectively. Without it, we could not start new businesses, hire employees, or purchase homes. Insurers accept risk from policyholders, whether those policyholders are businesses, organizations, or individuals. Insurance is undergoing technological transformation, and with the Creative Destruction Lab hosted at the UW, we have the benefit of being on the forefront of those innovations. Opportunities in the insurance industry include product innovation in emerging risks like cyber and climate change, venture capital investment, and implementing new technology into the value chain. Traditional roles involve commercial underwriting, product development, and strategy roles, as well as positions in real estate, finance, accounting, and marketing.

• Underwriting: The purpose of underwriting is to control risk while generating profits through policy sales and premiums. Underwriters review and analyze applications for insurance to determine the risk for the insurance company and make recommendations about whether to provide insurance, the amount of coverage and the amount of premiums. Underwriters, who use special underwriting software that performs calculations and makes recommendations based on the data entered, write insurance policies based on their findings.
• Brokerage: Brokers and consultants work directly with clients to assess and address risk for their businesses. This includes risk assessment and analysis, compliance and regulatory support, crisis management and contingency planning, and risk mitigation and transfer recommendations. For brokers, it will involve annual placement and negotiation of insurance products to transfer their client’s risk as well as support during loss events. The specific focus can vary depending on the client’s industry and needs but will always involve working with stakeholders to identify critical risks and design strategies to protect the organization’s interests.

Consultants give expert advice to people working in a professional or technical field. They examine organizations, identify areas for improvement, and develop actions to create change. Both large and boutique consulting firms hire talent to focus on specific practice areas or industries (i.e. Specialists). These firms and their employees provide deep expertise on a similar topic area or industry for their clients. These niche areas require a higher level of expertise and personnel in these areas are usually referred to as SMEs (Subject Matter Experts). Consultants in this pathway have a more focused and specialized path, while still serving a variety of clients. There are many boutique firms that only consult in one of these specialties.

• Risk: Determine potential loss exposures, identify existing controls, and make recommendations on additional loss control programs and activities that will assist clients in increasing their safety awareness and maintaining or enhancing their ability to reduce/prevent losses. Risk consultants work with brokers to obtain the insurance coverage on behalf of their client.