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The Actuary The magazine of the Institute & Faculty of Actuaries

Developing emotional intelligence

In the past, actuaries were often pigeonholed as number-crunchers they could calculate a cost projection in their sleep, but would favour calculus over communication. Today, in contrast, communication is a prerequisite: actuaries must advise and communicate with clients, pitch for new business, deal with other experts and work well within teams. To do any of these tasks well, they need to enhance their so-called ‘soft skills’. In other words, they need to develop their emotional intelligence.
Emotional intelligence (EI) comprises four broad areas of ability:
– Self-awareness knowing how your emotions are affecting your performance; being able to make decisions based on your feelings; knowing your strengths and weaknesses and, as a result, having a high level of self-confidence.
– Self-regulation managing disruptive feelings, emotions, and impulses so that you can: focus on the jobs in hand; be flexible in handling change; be open to new ideas; be ready to act on opportunities.
– Social awareness/empathy being able to put your own emotional preoccupations on hold in order to be aware of other people’s feelings, needs, perspectives, and concerns. This forms the basis of a number of competencies, enables you to help others to develop, and increases the ability to read political undercurrents.
– Social skills being warm and friendly and thus able to persuade, build bonds, and collaborate.
The EI skills listed above help actuaries to cope with a role that has changed we now live in a world where information is universally available and where actuaries use computers to deal with simple, as well as complicated procedures. As a result, PCs have released much of an actuary’s time for the tasks a computer cannot do, either as well (such as analyse complex information) or at all (such as bring in business, meet top executives, and entertain clients).
As well as enabling actuaries to do their jobs better, developing EI skills also has an impact on their success. This is because actuaries work in a cognitively demanding field, where everyone has a high IQ, and where this is not enough to guarantee a successful career.
Actuaries and other professionals with the prerequisite intellectual capabilities are experiencing this. Paradoxically, in fields such as finance, IT, or engineering, IQ can be a poor predictor of career success, as proponents are at the very high end of the bell curve and there tends to be very little variation in intellectual capability. Commensurately, a high IQ does not always offer enough of an advantage. EI, rather than IQ and technical skills alone, is gaining recognition as being key to determining career success.
Hay McBer research indicates that IQ predicts just 4%/10% of career success: it mostly determines what field a person qualifies in and what kind of job he or she can secure. It has been statistically proven by Hay McBer that EI is twice as predictive of success as IQ and technical skills combined and, for business leaders, EI competencies count for 85% of what sets star performers apart from the average. The world of work is rife with people of high intelligence who work for people of moderate intelligence but high emotional intelligence. Unlike IQ, which is something you are born with and cannot alter, the good news is that EI skills can be developed.
EI can be taught but it requires a very different model of learning from traditional business training. The classroom model going to a lecture, hearing about it is simply not enough. The emotional brain learns very differently from the thinking brain. The emotional brain learns through practice, shaping itself through repeated experience. If you consciously repeat a response to a particular stimulus, that response will eventually become automatic.
The best method to foster high levels of EI is one-to-one coaching. This tailors the transformation process to each person’s goals, needs, and circumstances. Changes also have to be planned over a number of months, because to embed new habits at a neural level requires considerable practice. A personal coach can play a unique role in helping to understand emotional reactions in real-life situations and in teaching how to monitor them, through practising emotionally intelligent responses.
Emotionally intelligent actuaries also benefit the firm they work for. Higher levels of EI enable executives to boost their personal success through the better management of others which, in turn, boosts the productivity and effectiveness of the organisation. Improving EI levels can thus bring significant benefits in terms of personal career development and company performance. With EI as a key determinant of both personal and corporate success, neither actuarial professionals nor their companies can afford to be left behind.