Every advance in risk management education must strive to improve risk management practice, contends George L. Head who explains recent advances.

In a survey of the worldwide state of risk management education in Global Risk Manager two years ago, six general models emerged for teaching risk management in universities, professional seminars, and other classroom settings. Two years ago, the structured study of risk management anywhere in the world almost certainly would have followed one or more of these models:

1. The insurance management model. This is an adaptation of the traditional insurance course that describes insurance from the business buyer's perspective and explains how to purchase an appropriate set of insurance policies for a given organization.

2. The general business risk management model. This most widely taught approach presents risk management as a general decision process for cost-effectively preventing and paying for any accidental losses any organization may suffer.

3. Sector-specific or industry-specific models. These are variations on the general business risk management model that have been tailored to the particular accidental loss exposures or other concerns of a given industry or economic sector.

4. The strategic risk management model. This model treats pure and speculative risks (exposures to accidental loss and uncertainties of future business losses or gains) together, recognizing that an organization's executives must deal holistically with these two general sources of uncertainty.

5. The public (or societal) risk management model. This view of risk management considers exposures to accidental losses that face all of society as a whole, not just any one organization or other entity within that society.

6. The treasury risk management model. In a treasury management setting, risk management focuses first on an organization's treasury manager taking actions that prevent the organization from becoming insolvent because of the treasurer's poor decisions or other foreseeable adverse business or economic changes.

No one of these models has come to predominate, none has become the "world's favorite". Instead, during the last two years, numerous organizations around the world have drawn eclectically from these models, combining what they see as the best elements of each, the elements most relevant for the constituencies within the risk management community that they serve. These organizations include professional associations and institutes, certification and training programs, and collegiate academic departments.

The choices that these organizations are making do not point to one single, "ideal" course - instead, they suggest an entire range of risk management courses that, together, explore the entire "known world" of risk management. Because risk management as a discipline is still in its "age of exploration," this known world continues to expand. In time, the leaders of this discipline and professional practice will develop several courses of risk management study that, taken as a whole, by students around the world, will:

* Encompass all sources of uncertainty - implying that some parts of the curriculum will focus on "accidental" losses, some on "business" or speculative gains and losses, and still others on the effective co-ordination of accidental and business gains and losses.

* Apply all risk management techniques - recognizing that some ways of dealing with risk focus on engineering solutions, some on managerial or financial solutions for particular organizations, still others on economic or political solutions for entire countries or regions, but that all sound risk management efforts strive to stabilize an organization's or nation's affairs to achieve its objectives in an uncertain, constantly changing, world.

* Recognize different basic organizational and societal objectives - applying the same risk management principles for private profit-seeking or non-profit organizations, as well as for governmental entities, and economic or geographical regions and recognizing that the underlying truths of risk management do not change with (but adapt to) changes in political regimes, economic systems, or religious beliefs as these factors shift as one moves from country to country or century to century.

* Teach risk management at appropriate levels - meeting the educational needs of both today's novices and today's experts in risk management, because today's novices must become tomorrow's experts, hopefully managing risks and seizing opportunities more efficiently tomorrow than can be even imagined today.

* Adapt to different perspectives and entities - acknowledging that, today and tomorrow, the world needs risk management professionals for individual households, for a variety of specific organizations, particular countries, as well as for the entire planet, and that risk management professionals have an ethical obligation to manage well the uncertainties facing whatever local or global entity they serve.

To explore these frontiers of the risk management profession and to work with others in making the right educational choices to enhance the profession's future, the Center for Advanced Risk Management Education (CARME) was formed in 1997 as a division of the American Institute for CPCU and the Insurance Institute of America. With the Associate in Risk Management (ARM) designation as its core, CARME is developing new courses, products, and educational services to extend and deepen the study of risk management.

Building on the base of more than 18,000 persons who now hold the ARM designation worldwide, CARME is establishing strategic alliances with several organizations to develop specialized and applied curricula. For example, within the United States, The American Society for Healthcare Risk Management and the Public Risk Management Association already have collaborated with CARME to develop courses, both to be available this year, that are focused on risk management practice in those respective environments. In addition, CARME plans to develop programs in risk financing and international risk management topics in partnership with professional associations and universities around the world.

Every advance in risk management education must strive to improve risk management practice so that the organization, region or world that benefits from this improved practice can be safer, healthier and more productive. Just as physicians throughout the world pledge their professional lives to preventing and curing disease, so risk management professionals in every country should pledge to guide us all in coping with - and ultimately benefiting from - the uncertainties, accidents, and opportunities each day presents.

George L. Head is vice president, American Institute for CPCU and Insurance Institute of America, Malvern, Pennsylvania. He is also on the senior staff of the Center for Advanced Risk Management Education (CARME). Dr Head is the author of numerous books and articles on risk management and has received a number of awards from insurance industry groups for his contributions to risk management education and to the insurance industry.