Actuaries as Leaders

Since its inception, the actuarial profession has been associated with technical rigor coupled with deep mathematical precision. In fact, an origin of the word “actuary” can be traced to the days of the Roman Empire, when the Latin word “actuarius” was given to those who meticulously recorded public actions of the Roman Senate.¹ As the profession continues to evolve and actuaries advance into leadership, it becomes increasingly clear to me that technical rigor, math precision, and meticulous record-keeping, combined with thoughtful leadership, could help propel organizations led by actuaries to new heights.

Drawing on the insights of authors John B. Maxwell, Daniel Goleman and Jim Collins, this article explores leadership principles that actuaries might embrace in order to thrive and help take their organizations from good to great. Goleman’s work on emotional quotient (EQ), highlighted in his writings (primarily from his 1995 book “Emotional Intelligence”), asserts that intelligence quotient (IQ) and technical skills are threshold (basic) capabilities, while EQ is most essential to leadership. Goleman believes EQ is twice as important as technical skill and IQ for jobs at all levels.

There are five components of EQ that Goleman believes define the traits of successful leaders, and ones, he notes, that don’t always get commended or encouraged at performance review time:

1. Self-awareness
2. Self-regulation
3. Motivation
4. Empathy
5. Social skills

From technical expert to strategic thinker

Probability weighted cash flows, predictive modelling, financial risk assessment, regulatory compliance … the list is voluminous. Many actuaries begin their careers mastering pedantic technical concepts to obtain professional designations. To advance their professional trajectory, however, the actuary might move into a position of leadership—a move that demands shifting from technical expert to strategic influencer.

Leadership author Maxwell notes in his book, “The Five Levels of Leadership,” that the critical transition from individual contributor to decision maker who shapes corporate strategy and drives innovation at the pinnacle of leadership requires refining key facets of Goleman’s EQ components, most importantly empathy and social skills. The strategic leader exudes technical skills, cognitive abilities, and competencies, demonstrating emotional intelligence seamlessly and with aplomb. Strategic leadership doesn’t entail solving technical problems alone. It involves creating a vision, inspiring teams and influencing decisions at the executive level.

Actuaries in leadership positions would be well-served by embracing soft skills such as communication, emotional intelligence and collaboration to complement their technical abilities.

Beyond numeric patterns: The power of discernment

Data is the lifeblood of most organizations, especially as it exponentially proliferates today. During  World War II, British Prime Minister Winston Churchill established the Central Statistical Office, a separate department outside his normal chain of command. Its principal function was to feed him continuously updated and unfiltered data. He relied on this department because, as he later says in a memoir, “facts are better than dreams,” and the CSO kept him apprised of the changes as they transpired.

Business researcher and author Collins addresses the Stockdale Paradox in his book “Good to Great.” The premise of the Stockdale Paradox is that you must retain faith that you will prevail in the end and confront the most brutal facts of your current reality. He contends that facing hard facts head-on and in real time will help an organization persevere.

While numbers and data certainly drive decisions, the stories we tell around them do as well. As actuaries, we are often in boardrooms presenting risk assessments, financial forecasts, stochastic models and scenario analyses. It is the why behind these numbers that is often communicated to stakeholders, which in instances is an audience of non-actuaries. Translating complex data into clear actionable insights via compelling storytelling is an art; one to cultivate as a leader. Collins emphasizes that leaders don’t merely analyze data; they present the “why” using compelling narratives—simplifying complexities and highlighting risks, opportunities and strategic paths forward.

Actuarial leaders could be well-positioned by refining communications to drive data-driven insights with clarity and impact.

Insights from risk management

A premise of insurance is creating security by assessing, quantifying and managing risks. How are risks identified and thereafter quantified? Despite prudent assessments and analyses, there is never a way to completely eradicate all risk.  While being experts in risk management, there are times when actuaries are confronted with unprecedented circumstances without prior playbooks that can be leveraged—COVID-19 being a good example of this. Leaders will often be confronted with decision-making in rapidly changing and uncertain environments, though technical actuarial training emphasizes precision; leadership often requires mastering the art of action without complete data.

In Maxwell’s book “The 21 Indispensable Qualities of a Leader,” he emphasizes courage and initiative as essential leadership traits. These seem to run in line with Goleman’s motivation and self-awareness components of EQ. One must appreciate that absolute certainty is a myth and results in missed opportunities; therefore, reliance on sound judgment, adaptability and a tempered risk-based mindset is key to making timely decisions based on information you have on hand.

This is particularly key when actuarial leaders find themselves in uncharted territories of emerging risks such as climate change and longevity trends. Such areas have limited historical data and guidance, compelling the leader to act ethically and make root decisions based on expertise and sound judgment.

When to trust the data and when to complement incomplete data with sound actuarial judgment is a skill, in my opinion, that could be key for actuarial leaders to develop.

Mentorship as a leadership imperative

A defining characteristic of leaders is their innate ability to develop more leaders. Mentorship goes beyond technical advice—as Maxwell explains in his book “How Successful People Lead,” top leaders possess an influence that transcends the organizations and industries they work in.

Because top leaders produce more leaders over the duration of their careers, the organizations they work in develop an “abundance mindset.” As leadership becomes part of the DNA of an organization, when one leader steps down or retires, there are leaders ready and capable of taking their place. This continuity could provide a competitive advantage over firms that perhaps may not value leadership development. Perhaps a way to foster leader development is to measure top executives by the caliber of future leaders they mentor.

Ideally, mentoring goes beyond technical guidance. It’s best, in my observation, when it encompasses a deeper understanding of the broader business context, provides career development opportunities beyond traditional actuarial roles, and promotes a culture of innovation where new ideas and perspectives are considered.

Actuarial leaders could aim to mentor the next generation of leaders and measure their success not only by their own achievements but also by the achievements of those they coach and develop.

The ethical decision maker

The actuary has a fiduciary responsibility to act in the best interest of the policyholder or plan participant. This further punctuates the fact that the actuary plays a critical role in ethical and sustainable decision-making and that actuarial leadership is ultimately about public trust.

With the advent of large language models (LLMs) and artificial intelligence (AI), it becomes even more crucial for the actuary to be cognizant of biases inherent in data, ensure AI-driven risk models remain transparent, and uphold fairness in pricing to avoid discrimination. Furthermore, I believe we should embed sustainability considerations into financial risk assessments to curtail climate risk and emphasize the importance of value-driven leadership. Leaders who prioritize ethics act as vanguards for the profession and safeguard its reputation, elevating the role of actuaries as moral decision makers.

In conclusion

I believe that, as we continue to evolve as a profession, our leadership skills need to evolve in step. Today’s actuarial leaders are strategists, communicators, mentors and ethical decision-makers in addition to being technical experts.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.

Copyright © 2025 by the Society of Actuaries, Chicago, Illinois.