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New SOA Credential

New SOA Credential

Risk Management Has a New Face: Chartered Enterprise Risk Analyst
Here's how you can obtain the credential that tells the business world you're ready to turn risk into opportunity.
By: Karen Bresson

In July 2007, Mike McLaughlin, FIA, FSA, MAAA, became one of the first individuals to add a new credential from the Society of Actuaries after his name: CERA. Short for Chartered Enterprise Risk Analyst, the CERA is the first new credential from the SOA since it was formed in 1949. While the development of this new international credential was the work of many members over the past few years, McLaughlin was at the helm.

Opportunity Recognized

Several years ago, McLaughlin realized that today's business world was facing an expanding breadth of risk. While managing and mitigating risk has long been the domain of actuaries, the changing nature of risk now encompassed financial and operational risks. Better known as enterprise risk management (ERM), organizations of all types were taking a 360–degree view of their risk profile, signaling an opportunity for actuaries to become leaders in this emerging practice.

"Soon after I was elected to the Board of Governors of the SOA in 2002, I read that the number of people registering for membership as chartered financial analysts just that one year exceeded the total number of members of the SOA," McLaughlin said. "Clearly the business world was relying on professionals who can convert risk into opportunity. Because actuarial training offers both qualitative and quantitative insights to risk management, I knew our profession was uniquely positioned to play a leadership role in ERM."

With the support of the SOA Board of Governors, the Knowledge Management Strategic Action Team (KMSAT) was engaged to develop a curriculum for a new professional credential. Designed to encompass the most comprehensive and rigorous demonstration of enterprise risk management available, the CERA credential stems from the same rigorous process through which actuaries earn their credentials. Already more than 83 individuals have earned the designation.

"Actuarial principles have traditionally helped the world understand risk, and the CERA credential signifies an evolution of the profession," said SOA President Ed Robbins. As new roles in enterprise risk management continue to grow, CERAs will be qualified for risk management leadership positions in all types of organizations, including insurance, benefits, broader financial services and the energy, manufacturing, transportation and health care industries.

Building upon the profession's inherent rigorous training, the CERA credential provides opportunity beyond "traditional" choices, offers an avenue for differentiation from the competition, and increases actuaries' expertise in risk, enhancing the profession's image in ERM.

How to Get it

To earn the new credential, candidates are required to successfully complete five examinations, as well as an educational module and professionalism course, to help prepare for leadership in the identification, measurement and management of risk within complex, risk–bearing enterprises. The CERA curriculum (CERAnalyst.org) includes the topics of:

  • Probability.
  • Financial Mathematics.
  • Financial Economics.
  • Micro and Macro Economics.
  • Construction of Actuarial Models.
  • Advanced Finance and Enterprise Risk Management.
  • Financial Reporting and Operational Risk.
  • Professionalism.

Advantage Actuaries

McLaughlin notes that while the CERA credential responds to the market's needs, it also better positions the profession for a competitive future. Accordingly, the credential provides CERAs with the qualifications necessary to fulfill the role of risk analyst, risk manager and chief risk officer. "The vision for the CERA credential–and the SOA's ultimate belief–is that this credential will build greater bench strength in traditional markets and afford easier transportability into new markets," McLaughlin said.

With the increasingly complex and fast–changing business environment, organizations are seeking risk management professionals to join their teams. "The definition of risk is evolving from mere mitigation to expansion of opportunity; CERAs don't merely speak to what we can lose; they focus on what we can gain," said Robbins.

Karen Bresson is director of marketing and branding at the Society of Actuaries.