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Profiles and Pitfalls: Questioning the Questionnaires

  • Writer: David Frank
    David Frank
  • Aug 13, 2025
  • 9 min read


It's ironic how comfortable we've become with the risk of reducing human complexity to a four-letter code in an industry built on assessing risk. As we face an increasingly complex insurance landscape, it may be time to audit our hiring policies with the same rigor we apply to our underwriting.


The Allure of Personality Tests


Imagine an actuary meticulously calculating the probability of hiring success based on Myers-Briggs Type Indicator (MBTI) results. It sounds absurd, yet in many insurance companies/agencies today, the scene is all too real. From MBTI to DISC, from Hogan to the Big Five, personality tests have become as ubiquitous in our hiring processes as actuarial tables are in our risk assessments.


But why are we so fascinated with categorizing complex human beings into neat little boxes? Dr. Adam Grant of Wharton School aptly describes personality tests as "the astrology of the office" (Grant, 2013). Despite this critique, many companies cling to these tests like a safety net in the high-wire act of hiring.


The appeal is understandable. In an industry where precision is paramount, the idea of quantifying human potential is seductive. If we can calculate the probability of a car accident or a natural disaster, why not predict how well someone will perform in a job? This thinking has led many insurance companies to embed personality tests deeply into their hiring processes, often without critically examining their effectiveness.


For The Skimmers: Personality tests are widely used in insurance hiring, but their effectiveness is increasingly questioned.


A Brief History: From Trenches to Cubicles


The journey of personality tests from psychological tools to corporate staples is a curious one. Originally developed for military and clinical applications in the early 20th century, these tests found their way into the business world post-World War II.


William H. Whyte's seminal work, The Organization Man (1956), highlights how corporations embraced these tests in their quest for scientific management. In our zeal to optimize human resources, we somehow equated people with widgets. It's as if Frederick Taylor, the father of scientific management, met Carl Jung, the founder of analytical psychology, at a corporate retreat, resulting in a strange brew of efficiency and pseudo-psychology.


The insurance industry, with its penchant for quantification and standardization, became particularly fertile ground for these tests. After all, if we can price the risk of a hurricane, surely we can price a candidate's potential, right? This mindset led to a proliferation of personality assessments across various insurance sectors, with underwriters tested for their risk tolerance, claims adjusters for their empathy and decisiveness, and sales agents for their extroversion and persuasiveness.


The Test Menagerie: A Critical Tour


Let's take a closer look at some of the most popular tests. The MBTI promises to reveal our true essence in four letters, but one can't help but wonder if it would have pegged Churchill as "too stubborn" or Lincoln as "too melancholic" for high office. DISC (Dominance, Influence, Steadiness, and Conscientiousness) claims to unveil our true colors, but perhaps it's equally adept at predicting which shade of red our face will turn when dealing with a difficult client.


The Hogan Personality Inventory (HPI) focuses on predicting job performance and leadership potential. While it is more grounded in empirical research, it may still not capture the full complexity of leadership (Hogan, 2006). The Big Five model, with its factors of Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism, offers a stronger scientific basis but still paints personality with broad strokes (Soto, 2018).


In practice, these tests often lead to oversimplification. To illustrate, an ENFP (Extraverted, Intuitive, Feeling, Perceiving) might be automatically funneled into sales roles, while an ISTJ (Introverted, Sensing, Thinking, Judging) might be earmarked for actuarial work. But do these categorizations truly capture the nuances of human potential? Can they account for the underwriter with a knack for client relations or the outgoing actuary with a talent for explaining complex concepts to laypeople?


The Science (or Lack Thereof)


The scientific community has long been skeptical of the validity and reliability of many personality tests. A comprehensive review by Morgeson et al. (2007) found little evidence supporting the use of personality measures in personnel selection. More recently, a 2019 study by Stabile et al. highlighted ongoing concerns about the psychometric properties of personality assessments in hiring contexts. 


Moreover, personality tests often fall prey to the Barnum Effect, where vague, general personality descriptions seem uniquely applicable to individuals. As Bertram Forer demonstrated in 1949, humans are remarkably good at seeing themselves in generic statements.


Additionally, these tests often fail to account for the context-dependent nature of behavior. An individual might exhibit different traits in different situations or roles. The calm, methodical underwriter might be a spontaneous risk-taker in their personal life. Can a single test capture this duality, and more importantly, should it matter in the hiring process?


The Insurance Industry's Love-Hate Relationship with Tests


Despite these concerns, the insurance industry has been a particularly enthusiastic adopter of personality tests. A 2022 report in the Insurance Journal noted that many insurers still rely heavily on these assessments, viewing them as a way to predict cultural fit and job performance (Insurance Journal, 2022). 

However, there's a growing recognition that these tests may be falling short. As James L. Smith pointed out in a 2023 Risk Management article, the industry is grappling with balancing traditional hiring methods, including personality tests, with more innovative approaches (Smith, 2023).


This tension is particularly evident in how different insurance companies approach hiring. Some steadfastly adhere to personality tests as a crucial part of their process, while others are beginning to explore alternatives. As a case in point, a large property and casualty insurer might use the MBTI to slot candidates into predefined roles, while a more progressive Insurtech startup might rely on skills-based assessments and situational judgment tests.


For The Skimmers: The insurance industry is beginning to question the overreliance on personality tests and is exploring more dynamic assessment methods.


Beyond Personality: Cognitive Ability and Situational Judgment


Recent trends in hiring are moving beyond simple personality assessments. Cognitive ability tests, for instance, have shown more consistent correlations with job performance. A 2023 guide by Criteria Corp emphasizes the predictive power of these tests across various job roles (Criteria Corp, 2023). 


These tests measure a candidate's ability to process and apply information, solve problems, and learn new skills. In the insurance context, this could be particularly valuable. To put it into perspective, a cognitive ability test might better predict how quickly a new underwriter could learn and apply complex policy guidelines than a personality assessment could.


Situational Judgment Tests (SJTs) are also gaining traction. These assessments present candidates with realistic, job-related scenarios and ask how they would respond. A 2023 guide by Assessment Day highlights how SJTs can provide insights into a candidate's decision-making process and alignment with company values (Assessment Day, 2023).


In the insurance industry, SJTs could be tailored to reflect real-world challenges. One scenario might be a test for a claims adjuster that presents situations involving difficult claimants, ethically ambiguous circumstances, or time-sensitive decisions. This approach allows companies to assess how candidates might perform in the role, rather than simply categorizing their personality type.


The Rise of Strengths-Based Approaches


Another emerging trend is the focus on individual strengths rather than trying to fit candidates into predefined personality types. The Clifton Strengths assessment, for example, aims to identify a person's unique talents and how they can be applied in the workplace (Gallup, 2023).


This approach aligns with a growing recognition that successful teams are often built on complementary strengths rather than uniform personality types. In the context of insurance, where diverse skills are needed across underwriting, claims, sales, and customer service, this nuanced approach to talent could prove valuable.


Consider the case of building teams with a mix of strengths instead of looking for a stereotypical "insurance personality." A claims department might benefit from having detail-oriented analyzers working alongside empathetic communicators, each bringing their unique strengths to the table.


The Future of Insurance Recruiting


As we look to the future, it's clear that the insurance industry is at a crossroads in its hiring practices. A 2023 report from Insurance Thought Leadership argues for moving beyond personality tests towards more holistic, data-driven approaches to talent acquisition (Insurance Thought Leadership, 2023). 


These new methods might include: 


  • AI-driven assessments that analyze a wider range of candidate data.

  • Game-based assessments that provide a more engaging candidate experience.

  • Continuous performance tracking that allows for ongoing development rather than point-in-time evaluations. 


Imagine a hiring process where an AI system analyzes a candidate's resume, work samples, and responses to situational judgment tests, providing a comprehensive profile of their skills and potential. Or consider a gamified assessment that simulates a day in the life of an insurance professional, allowing candidates to demonstrate their abilities in a realistic yet engaging environment.


Some forward-thinking insurance companies are already implementing these approaches. To illustrate, a major life insurer has replaced its traditional personality tests with a series of mini-games designed to assess cognitive skills and decision-making abilities. Another company uses AI-powered video interviews to analyze candidates' language patterns and facial expressions, providing insights into their communication style and emotional intelligence (HireVue, 2022).


Ethical Considerations and Implementation Challenges


As we embrace these new technologies, we must remain mindful of potential ethical pitfalls. AI-driven hiring tools, while promising, can perpetuate biases if not carefully designed and monitored (Raghavan et al., 2020). To illustrate this concern, if an AI system is trained on historical hiring data from an industry that has traditionally favored certain demographic groups, it may perpetuate these biases in its recommendations. 


Privacy concerns are also paramount. The increasing use of data analytics in hiring raises questions about candidate privacy and the ethical use of personal information (Bâra et al., 2019). How much data is too much? Where do we draw the line between thorough assessment and invasion of privacy?


Implementation of new hiring methods also presents challenges. Many insurance companies have deeply ingrained hiring practices, and changing these can be met with resistance. There's also the question of cost – while personality tests are relatively inexpensive to administer, more sophisticated assessment tools can require significant investment. 


Moreover, there's the challenge of ensuring that hiring managers and HR professionals are equipped to interpret and apply the results of these new assessments. A strengths-based approach, as a case in point, requires a mindset different from traditional personality typing.


Insuring the Future of Talent


As we reassess our approach to talent acquisition in the insurance industry, let's take a page from Nietzsche and focus less on what candidates are and more on what they might become. In the grand actuarial table of hiring practices, relying solely on personality tests is a high-risk policy with questionable returns.


The future of hiring in insurance likely lies in a hybrid approach – one that combines the best of traditional methods with innovative new techniques. This might mean using cognitive ability tests and situational judgment assessments for initial screening, followed by strengths-based interviews and job simulations for final selection.


Ultimately, the goal should be to create a hiring process that is as nuanced and multifaceted as the candidates themselves. Just as we wouldn't insure a property based solely on its color or a driver based only on its astrological sign, we shouldn't hire based on a simplified personality profile.


Let's approach our hiring practices with the same innovative spirit we bring to new insurance products. After all, in the race for talent, we can't afford to be actuarially sound but practically obsolete. The future of our industry depends on our ability to identify, attract, and retain diverse talent – and that requires looking beyond the limitations of personality tests to embrace a more holistic view of human potential.


A Final Thought…


An interesting question to consider is whether there's a way for candidates to apply a test on the personality of the employer. If you're interested in exploring this reverse approach, let me know in the comments, and I'll make it happen in a future article.


What are your thoughts? How do you feel about the current testing? Share your insight in the comments section. If you are interested in more of my mental musings, subscribe to my newsletter. 


It's free and, according to my parents, "it's good, but you can do better next time." 😒🤷♂️😉



Cited Cognizance 





 
 
 

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