The Australian Prudential Regulation Authority’s (APRA) new risk management standards may prove to be expensive for insurers.

As reported in insuranceNEWS.com.au last week, APRA’s CPS 220 draft standard proposes that insurers’ risk management functions should be overseen by designated chief risk officers (CRO).

This position is intended to be a separate senior management function, as the regulator has ruled out the CEO, CFO, appointed actuary or head of internal audit taking on the job.

But appointing a specialist to this role will not be cheap.

According to Financial Recruitment Group MD Judith Beck, a CRO with such big responsibilities would command a salary of $250,000-$400,000, depending on the size of the organisation.

“Then there would be the long and short-term incentives to add to the base salary,” she told insuranceNEWS.com.au.

Ms Beck says there will also be other costs, and problems attracting people to fill this role at both general and life insurers.

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