Critical Soft Skills for the Modern Actuary

June 25, 2024

Estimated reading time: 5 minutes

Actuaries are known for their expertise in mathematics, statistics, and financial theory, that they use to analyze and solve problems related to risk and uncertainty. However, in today’s dynamic business environment, possessing technical knowledge alone is not enough. To truly excel, actuaries must also develop and hone a variety of soft skills. These skills not only enhance their professional effectiveness but also enable them to communicate complex ideas, work collaboratively, and adapt to changing circumstances.

In the evolving landscape of the actuarial profession, where automation and advanced software are becoming more common, the technical tasks of actuaries are increasingly being supported by technology. This shift increases the importance of soft skills, as they enable actuaries to add value beyond what can be automated; interpreting data, influencing decisions, and steering strategies. In our view, soft skills may soon outweigh technical skills for actuaries. Below are the top 6 soft skills for actuaries:

  1. Communication: Breaking down complex data for decision-makers ensures actionable insights, not just numbers.

  2. Teamwork and Collaboration: Actuaries typically work as part of multidisciplinary teams. Collaboration is key there.

  3. Client Relations: Understanding and meeting client needs goes beyond mere data analysis.

  4. Adaptability and Problem-Solving: Staying ahead in a rapidly evolving field means being ready to pivot and innovate.

  5. Leadership and Management: Guiding teams and projects to strategic success relies more on people skills than purely technical knowledge.

  6. Ethical Judgment and Integrity: Making decisions that affect lives and livelihoods demands a strong moral compass and unwavering integrity.

In a world where machines compute, the human touch will not only differentiate but dominate. For actuaries, enhancing soft skills could be your most strategic career move. But taking risks and venturing out to areas like soft skills that might not come to us naturally also has the pre-requisite of having some availability of time. It is important to spend some free time with yourself because an occupied and busy mind focusing entirely on routine will tend to not do anything to learn further or learn those skills (such as soft skills) that are not directly relevant or less important than other more immediate skills (such as quantitative skills for actuaries).

While actuaries are renowned for their analytical prowess and mastery of quantitative skills, success in this field also hinges on developing a robust repertoire of soft skills. These interpersonal and communicative abilities are instrumental in navigating the complexities of the actuarial profession, fostering effective collaboration, and driving impactful decision-making. As the actuarial landscape continues to evolve, cultivating these soft skills becomes paramount.

How soft skills relate to the actuarial field

Effective communication is the cornerstone of an actuary's role. Beyond crunching numbers and analyzing data, actuaries must convey intricate findings, recommendations, and insights to diverse stakeholders, including executives, colleagues, and clients. Honing the ability to articulate complex concepts in a clear, concise, and compelling manner is crucial for influencing decision-making processes and ensuring the practical application of actuarial work. Actuaries are often tasked with tackling multifaceted challenges that extend beyond mathematical calculations. Developing strong problem-solving skills enables actuaries to approach issues from multiple angles, think critically, and devise innovative solutions. This involves breaking down complex problems, identifying underlying patterns, and employing creative thinking to generate viable strategies that align with organizational goals and risk management principles.

In the actuarial field, even minor errors or oversights can have significant financial and reputational consequences. Cultivating a meticulous attention to detail is essential for ensuring the accuracy and reliability of actuarial analyses, calculations, and reports. This skill encompasses not only thoroughness in computational work but also the ability to scrutinize data, identify anomalies, and maintain a keen eye for nuances that may impact decision-making.

Actuarial work frequently involves cross-functional collaborations with professionals from various departments, such as underwriting, finance, and risk management. Developing strong teamwork and interpersonal skills enables actuaries to effectively communicate with diverse stakeholders, build rapport, and foster an environment of trust and shared understanding. This includes active listening, respectful communication, and the ability to integrate diverse perspectives to achieve collective goals. Actuaries often juggle multiple projects, deadlines, and competing priorities. Mastering time management and prioritization skills becomes crucial for maintaining productivity, meeting client expectations, and ensuring the timely delivery of high-quality work. This involves setting realistic goals, employing efficient work strategies, and possessing the ability to adapt and reprioritize tasks in response to evolving circumstances or emerging priorities.

Emotional intelligence encompasses self-awareness, self-regulation, empathy, and social skills. Actuaries with high emotional intelligence can manage their own emotions, understand and influence the emotions of others, and navigate social complexities effectively. This skill enhances interpersonal interactions and contributes to a positive workplace culture.

Deep dive into critical soft skills

Our soft skills usually work for us only in good times. In difficult times, we generally seem to go back to square one. This is because, normally, we are too result oriented. School fails to replicate reality because it teaches us to be successful instead of how to effectively handle failure. We abhor making mistakes even though we know that we cannot learn anything new without making mistakes. Making and sustaining a good impression with other colleagues is foremost, and that means learning the ropes in the workplace. It is most important to be considerate of others, especially those senior to us, but we tend to overdo it and let our inner voice be drowned by their opinions.

Moreover, the explosion of information in our times has made us broad in knowing things on the surface, but perhaps inwardly shallow. Countless applications and social media incursions mean that we are constantly busy scrolling down a wall or tweeting or chatting. This has its benefits, but diverting attention to too many areas can potentially radically reduce our capacity for insight.

It is important to spend some free time with yourself because an occupied and busy mind focusing entirely on routine will tend to not do anything to learn further or learn those skills (such as soft skills) that are not directly relevant or less important than other more immediate skills (such as quantitative skills for actuaries).

As actuaries, we might be focusing too much on educating our minds and not giving enough thought in comparison to education of our hearts. Aristotle has warned us here: “Education of the mind without education of the heart is no education at all.” And, then, here is where Nietzsche whispers in our ears: “You must have chaos within you to give birth to a dancing star.” This hits the core; we should have a healthy level of creativity, intuition and holy curiosity within ourselves as well, because this complements the scientific, intellectual and rational mind, not opposes it. The greatest of mathematical equations has to be felt first by our human emotions before it can be understood by our rational mind. We have to revive the human touch from the icy waters of calculations.

We should give due importance to the journey as well. We should accept and celebrate our failures and not just our successes. Our focus on making good impressions should be moderate and reasonable and not relying too much on our impressions, because human opinions are fickle and they take a very short time to change. We should focus on listening to our inner voice and doing what we are passionate about as well as making good impressions in the office. That means sometimes making mistakes, too, to learn something new and to progress ahead.

We need to focus more on quality rather than quantity. If we are deep enough, we will realize the interconnections between various elements and then ultimately be broad enough too. We should not give in to the compartmentalization of knowledge where specialized and isolated pockets of knowledge are accessed without any connection to the bigger picture involved. Even if I am only a reserving actuary, I should have idea on how this connects with pricing and underwriting and risk management functions as well to have a holistic picture of the company’s performance.

Conclusion

To sum up, while technical expertise is the foundation of an actuarial career, these soft skills are equally important in achieving long-term success. Actuaries who invest in developing these skills are better equipped to communicate effectively, solve problems creatively, work collaboratively, and adapt to the ever-changing landscape of the financial world. By balancing technical prowess with these essential soft skills, actuaries can not only enhance their professional impact but also drive meaningful change within their organizations and the broader industry.

As I announced on LinkedIn recently, I’m doing a live webinar on the topic “10 Steps to Launch a Predictable, Consistent, and Successful Solo Actuarial Consulting Practice”, and that the registration link and details would be sent directly to the subscribers of MyActuary newsletter, please see the date, time and link for registration below.

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