Time to discuss the “escape clause” of the actuarial profession: the enterprise risk management and corporate finance track (henceforth ERM). Many candidates pursue the ERM track because they have little interest in pursuing a more traditional actuarial role in health or life and would prefer to give the challenging and frantic world of corporate finance a try. While relatively unpopular at second to last in number of exam passers, the ERM track teaches general business acumen rather than specific actuarial regulations and techniques, which provides opportunities to continue within the actuarial profession in a less specialized role, or to leave altogether and pursue finance.
Candidates pursuing the ERM track will likely struggle to find employment in insurance due to these fields’ highly specialized nature, making general corporate finance and consulting the more typical paths. Similar to the other FSA tracks, careers in consulting can offer MBA opportunities and exit opportunities into industry (in this case, corporate finance); largely unlike the other tracks, however, corporate finance can pipeline candidates into consulting as well, making consulting both an entry level and an executive level opportunity for ERM actuaries.
Also unlike other FSA tracks, ERM better prepares candidates for strategy consulting rather than industry specific (life/health) consulting. The general business knowledge, including finance, management, marketing, and accounting, taught by the ERM track applies directly to strategy consulting rather than to specialty firms like Wakely Consulting or Oliver Wyman. Within strategy consulting, a risk specialization fits ERM actuaries best as they can apply the risk management background from most actuarial curricula as well as the business acumen from the ERM track. Most strategy consultant strive to become a partner in their firm after ten to twenty years in consulting and managing roles, but an immediate risk specialty can expedite this process by jumping directly into a more specialized role.
The terminal professions for most ERM actuaries who start and stay in finance are the Chief Financial Officer and Chief Risk Officer; these C-Suite professions offer the most compensation and the highest regard among finance professions, making them a widely held end goal.
Typical intermediate steps for corporate actuaries include financial and corporate controller or treasury manager, among other middle management positions that manage the risk and finances of a company. Regardless of entry position and progression, compensation for the finance path remains just under six figures with upper level positions seeing salaries well into the two-hundred thousands and even higher for top companies.
Since the ERM FSA must cover a broader range of material than any other track, many consider it the most difficult and “risky” of FSAs since the demand for corporate actuaries typically falls below that of insurance actuaries and other more traditional actuarial roles. Like the other FSA paths, ERM consists of three tests, four modules, and the professionalism course, with the two five hour written tests, Foundations of Corporate Finance and Strategic Decision Making contributing most of the path’s difficulty.
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