"The fool doth think he is wise, but the wise man knows himself to be a fool." William Shakespeare, As You Like It
Insurance is a business of estimating what we cannot see. Underwriters price risks they have never inspected. Actuaries project losses from incomplete data. Claims professionals reconstruct events they did not witness. Carrier executives allocate capital against futures no one can confirm. The discipline depends on one habit above all others: knowing the limits of what you know.
That habit applies to the people in the industry as much as to the models. In "The Key to Critical Self-Awareness," part of his How to Build a Life series, Arthur C. Brooks makes the case that accurate self-knowledge is among the most valuable and least practiced skills a professional can develop. This piece is the next in our Happiness series, which translates his Atlantic column for insurance professionals.
Brooks starts with the ancient Greek maxim "know thyself" and adds a qualifier: it has to mean knowing yourself accurately. Research he cites shows that people rate their own skills and performance with only moderate to meager accuracy, and that others often predict our behavior better than we do. We live, in his words, in a fog of meta-ignorance. We do not know ourselves, and we do not know that we do not.
Part of the cause is protective. Psychologists describe a psychological immune system that uses motivated reasoning to defend our self-image. We rationalize poor decisions, discount critical information, and keep a flattering account of our own competence. It is comfortable in the short term and costly in the long term, because we cannot improve what we refuse to see.
Insurance professionals will recognize the pattern. Every underwriter knows the risk of anchoring on a prior view of an account. Every actuary knows how a favored assumption can survive contradicting data. Every claims leader knows the pull to explain away a result that does not fit the plan. Model risk governance exists because the industry accepted long ago that smart people systematically overrate their own judgment. Brooks argues that the same discipline belongs at the personal level.
He offers three practices.
First, stop protecting yourself. Brooks compares honest self-assessment to a hard workout. It is uncomfortable at first and builds strength over time. He suggests asking friends and family for candid criticism on a regular basis and asking them not to hold back. In our industry, that means asking a trusted colleague, a broker partner, or a claims counterpart what you consistently get wrong, then listening without defending. A peer review of your own habits is cheaper than learning them through a loss.
Second, adopt a change narrative. People who see their abilities as fixed treat negative feedback as a threat and discard it. People who see room for growth treat it as information. Brooks notes that his best students are impatient with empty praise and prefer criticism, which they regard as a tool. Teams that review a bad quarter or a missed pricing call as a source of learning, not blame, tend to behave the same way.
Third, decide what to change and begin. Self-knowledge only matters if it leads to action. Brooks points to research showing that personality is more adaptable than once believed, and to the "as if" principle: act like the person you want to become, and over time you become that person. If you want to be more rigorous in your risk selection or more patient in a difficult negotiation, start by behaving that way before it feels natural.
Brooks also finds that honest self-awareness improves job contentment, enthusiasm, and communication. This matters in a business built on relationships and trust. Brokers, carriers, and clients all benefit when the person across the table knows where their expertise ends and says so.
The practical takeaway is modest. Pick one area of your work where you suspect your view is more comfortable than accurate. Ask two people who see your work what they notice. Write down what you hear, and choose one change to make this quarter.
Insurance already rewards those who respect uncertainty in the external world. Brooks reminds us that the same respect is owed to the one we carry in our own heads.
This article draws on "The Key to Critical Self-Awareness" by Arthur C. Brooks, published in The Atlantic. Read the original for the full research and context.