Assessments and Assumptions: Measuring Minds or Missing the Mark?

Setting the Stage: The Role of Assessments in Modern Insurance Hiring

In modern recruitment, pre-employment assessments have become as common as policy renewals. These tests promise to measure everything from technical knowledge to personality traits, offering employers a supposedly data-driven crystal ball for predicting candidate success. For the insurance industry—where precision meets human interaction—the stakes are particularly high. 

The Assessment Arsenal 

The insurance industry's reliance on assessments stems from legitimate concerns. We need professionals who can navigate intricate policy details while maintaining regulatory compliance. Four key types of assessments dominate the landscape: Knowledge-based tests evaluate understanding of insurance principles through multiple-choice questions or practical tasks like analyzing claims scenarios. Cognitive ability tests measure problem-solving and logical reasoning—crucial skills for roles involving complex risk analysis or customer service under pressure (Forbes, 2023). 

Personality assessments, from Myers-Briggs to DISC profiles, attempt to gauge traits like conscientiousness and emotional stability (MyHRToolkit, 2023). Situational judgment tests present realistic workplace scenarios, from handling difficult clients to resolving team conflicts, aiming to assess decision-making capabilities. 

• Cognitive ability tests measure problem-solving, logical reasoning, and adaptability—essential skills for roles involving data analysis or customer service under pressure. These tools evaluate how quickly candidates can analyze complex information and apply it effectively. 

• Personality assessments, like the Myers-Briggs Type Indicator (MBTI) or DISC profile, aim to gauge traits such as conscientiousness, agreeableness, or emotional stability. In theory, these tests help employers determine if a candidate’s temperament aligns with the company culture or the interpersonal demands of the role. 

• Finally, situational judgment tests (SJTs) present candidates with workplace scenarios, such as resolving a customer complaint or handling conflicting priorities. Employers use these to evaluate ethical reasoning and decision-making skills. Together, these tools create what employers hope is a comprehensive view of a candidate’s technical abilities, personality traits, and potential for success. 

The Evidence Behind Testing 

Research from Schmidt and Hunter (1998) suggests cognitive tests are the most reliable predictors of job performance, with a validity coefficient of 0.51. However, even this correlation leaves considerable room for uncertainty. Sackett and Lievens (2008) note that while situational judgment tests can predict performance, they often measure a candidate's ability to identify preferred responses rather than their likely real-world actions. 

Limitations and Challenges 

Standardized assessments can inadvertently favor certain demographic groups, potentially limiting workplace diversity (HR Digest, 2023). As noted by AIHR (2023), successful insurance professionals often excel due to a combination of emotional intelligence and analytical capability rather than high test scores alone. 

As helpful as these tools can be, over-reliance on standardized assessments comes with risks.

 1. Bias and Diversity Challenges Many tests inadvertently favor candidates from certain educational or cultural backgrounds. Cognitive tests, for example, can advantage applicants with formal academic training, leaving those with practical but nontraditional experience at a disadvantage (Forbes, 2023). This can inadvertently limit diversity in the hiring pool. 

2. Tests Aren’t Perfect Predictors The data reveals that even the most reliable assessments leave room for error. Schmidt and Hunter’s validity coefficient of 0.51 for cognitive tests means that nearly half of hiring outcomes rely on other factors. Success in insurance often depends on qualities like emotional intelligence, adaptability, and creativity—traits that resist measurement. 

3. Gaming the System Candidates savvy enough to understand what employers want may skew results, particularly in personality or situational tests. While the test may suggest they’re collaborative and resilient, real-world performance could tell a different story. 

Alternative Approaches 

For employers implementing assessment processes, two critical considerations emerge: 

1. Strategic Integration: Combine validated assessments with practical evaluations that reflect actual job responsibilities. For example, have underwriting candidates evaluate real (anonymized) risk scenarios, or ask claims professionals to handle simulated customer interactions (Shine Interview, 2023). 

2. Work Sample Tests and Behavioral Interviews: These methods provide richer insights than hypothetical scenarios, allowing candidates to demonstrate their skills in context-specific situations. 

The Modern Insurance Professional 

The contemporary insurance workplace demands a sophisticated blend of technical expertise and interpersonal skills. While assessments can identify candidates with fundamental capabilities, they often fail to capture the nuanced combinations of attributes that distinguish exceptional performers. Recent studies suggest that the most successful insurance professionals aren't necessarily those who ace standardized assessments, but rather those who demonstrate strong emotional intelligence and problem-solving abilities in real-world situations. 

Best Practices for Implementation 

Pre-employment tests remain valuable tools, but they work best as part of a balanced hiring approach. Employers should combine assessments with structured interviews, work samples, and reference checks to gain a holistic understanding of a candidate's potential. Regular validation ensures tests remain relevant and bias-free, while transparency about the assessment process builds trust with candidates. 

• Combine Tools: Use tests alongside work samples, behavioral interviews, and references to build a holistic view of a candidate’s potential. 

• Validate and Update: Regularly review tests to ensure they’re free from bias and aligned with the role’s requirements. 

• Be Transparent: Inform candidates about what the tests measure and how results factor into hiring decisions. 

Final Thoughts: Balancing Tests and Human Judgment in Hiring

Until someone develops a test that perfectly measures adaptability, creativity, and the ability to maintain composure while explaining policy exclusions, human judgment will remain crucial in recruitment. The true measure of a candidate's potential unfolds not in test scores, but in their ability to navigate the complex, dynamic world of insurance with skill and professionalism.

Keep Your Hands Going for...

• AIHR. (2023). Effective Recruitment Methods. Retrieved from https://www.aihr.com/blog/recruitment-methods/

• Forbes. (2023). Revolutionize Recruitment with Cognitive Assessments. Retrieved from https://www.forbes.com/councils/forbeshumanresourcescouncil/2024/11/18/revolutionize-recruitment-with-cognitive-assessments/

• How to Analyze Data. (2023). Insurance Industry Assessment Test. Retrieved from https://www.howtoanalyzedata.net/insurance-industry-assessment-test/

• HR Digest. (2023). Modern Hiring Methods as an Alternative to Traditional Hiring. Retrieved from https://www.thehrdigest.com/modern-hiring-methods-as-an-alternative-to-traditional-hiring/

• MyHRToolkit. (2023). Alternative Recruitment Strategies. Retrieved from https://www.myhrtoolkit.com/blog/alternative-recruitment-strategies

• Sackett, P. R., & Lievens, F. (2008). Personnel selection. Annual Review of Psychology, 59, 419-450.

• Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124(2), 262-274.

• Shine Interview. (2023). Ways to Assess Candidate Skills. Retrieved from https://www.shineinterview.com/ways-to-assess-candidate-skills/

• Test Candidates. (n.d.). Insurance Industry Tests. Retrieved from https://www.testcandidates.com/industry-tests/insurance/

• Wikipedia. (2023). Situational Judgement Test. Retrieved from https://en.wikipedia.org/wiki/Situational_judgement_test