Business Management · Using data, company functions, people skills, influence and clear communication

People Skills, Teamwork and Leadership for IAI Actuarial CB3

Updated 11 October 2026 · Fact-checked

People skills are the behaviours that help you work well with others: listening, building trust, handling conflict and leading. In CB3 you apply models such as team development stages, team roles, motivation theories and leadership styles to a case, then recommend actions that fit the situation and the people involved.

Understand People Skills, Teamwork and Leadership

Actuarial work is rarely done alone. You gather data from one team, agree assumptions with another, and explain results to people who are not actuaries. Technical answers fail if the people around you do not trust you, understand you or work with you. That is why CB3 tests people skills.

Start with the team. A team is a group with a shared goal and mutual dependence. Teams go through stages. A common model is Tuckman's: forming (people meet and are polite), storming (disagreement over roles and methods), norming (agreed ways of working), performing (the team delivers well). Many versions add adjourning when the team ends. Teams can move backwards, for example when a new member joins.

Teams also need a mix of roles. Belbin's model describes nine team roles, such as plant (ideas), co-ordinator, shaper, implementer, monitor evaluator, teamworker, resource investigator, completer finisher and specialist. A strong team covers the needed roles. Everyone has a preferred role, and too many people in one role creates gaps or clashes. Many actuaries are strong specialists and monitor evaluators, so a team may lack drive or people focus.

Motivation and conflict sit alongside this. Motivation theories, such as Maslow's hierarchy of needs and Herzberg's two-factor theory, explain why pay alone does not keep people engaged: recognition, achievement and growth matter too. Conflict is normal. It may come from unclear roles, scarce resources, different goals or personality clashes. Handled well, it improves decisions. Handled badly, it harms results. Common approaches are to avoid, accommodate, compete, compromise or collaborate (the Thomas-Kilmann styles). The best style depends on the issue and its urgency.

Leadership is about influencing others towards a goal. Styles include autocratic (leader decides), democratic (team involved), laissez-faire (team largely self-directed), and situational approaches where the style changes with the team's skill and confidence. No style is best in all cases. In an exam you must link the style to the facts: a new, inexperienced team under a tight deadline may need clear direction, while an experienced team may need more freedom.

Key rules to remember

Tuckman's team development stages: Forming → Storming → Norming → Performing (→ Adjourning); Teams can move back a stage when members or tasks change. Say what a leader should do at each stage.
Thomas-Kilmann conflict styles: Competing | Collaborating | Compromising | Avoiding | Accommodating; Two dimensions: assertiveness and co-operativeness. Collaborating is high on both. Choose the style to fit the situation.
Maslow's hierarchy of needs: Physiological → Safety → Social → Esteem → Self-actualisation; Lower needs must be reasonably met before higher ones motivate. Use it to explain what motivates a person.
Herzberg's two-factor theory: Hygiene factors (prevent dissatisfaction) vs Motivators (create satisfaction); Pay and conditions are hygiene factors. Achievement, recognition and responsibility are motivators.
Leadership styles: Autocratic | Democratic | Laissez-faire | Situational; Match the style to the task, team experience and time available.

How to solve People Skills, Teamwork and Leadership questions

Use this method for any CB3 question on people, teams or leadership. It keeps your answer tied to the case rather than to textbook lists.

1Read the question and underline the task word (identify, explain, recommend, discuss). It tells you the depth needed.
2Pick out the facts in the case: team size, experience, deadlines, who disagrees, what has gone wrong.
3Choose one or two models that fit those facts, such as team stages for a new team or conflict styles for a dispute. Do not list every model.
4Name the model briefly, then apply it: say where the team or person sits and why, quoting the case facts.
5Give practical actions: who does what, by when, and how you will check it worked.
6Weigh the options: give a benefit and a risk or cost of your recommended approach.
7End with a clear recommendation in one or two sentences, written for the reader named in the question.

Quickest way: Fact, model, action

When to use it: Use this when you have only a few minutes for a written part, or for MCQs that describe a workplace scenario.

Fact: write the one or two case details that matter most.
Model: name the best-fitting concept, for example storming stage or democratic style.
Action: state what the manager should do and why it suits these facts.
For MCQs, find the option that matches both the model and the facts. Reject options that are always-true generalisations such as 'always use an autocratic style'.

Common mistakes in People Skills, Teamwork and Leadership

Listing theories without applying them to the case.
Students memorise definitions and write all they remember.
Fix: Use each model only to explain a fact from the case, and then give an action.
Saying one leadership style is always best.
Students prefer a style they like, usually democratic.
Fix: Say it depends on task urgency, team skill and risk. Give a situation where another style would suit better.
Treating conflict as always bad.
Everyday language links conflict with harm.
Fix: Explain that conflict can improve ideas when managed. Then choose a handling style for the specific issue.
Confusing team stages with team roles.
Both are named after people and both are about teams.
Fix: Stages describe how a team develops over time. Roles describe the behaviours individuals bring. Write that distinction in one line.
Recommending only pay to motivate people.
Money is an obvious lever.
Fix: Use Herzberg or Maslow to add recognition, development, autonomy and clear goals.
Generic answers with no practical steps.
Students stop after naming the theory.
Fix: Always add who, what and when, such as a meeting, a clearer role split or a review date.

Worked examples

Example 1

A new project team of five actuarial analysts is building a pricing model. In week three, two analysts argue about which method to use, work is duplicated and the deadline is at risk. Identify the stage the team is in and recommend what the team leader should do. (6 marks)

Show the solution

Facts: a new team, disagreement over methods, duplicated work, a tight deadline.
Model: Tuckman's stages. Disagreement over methods and unclear roles point to the storming stage.
Action 1: Hold a short meeting to agree the method, using clear criteria such as accuracy, time and data available. The leader makes the final call if no agreement is reached because of the deadline.
Action 2: Define roles and ownership of each task in writing to remove duplication.
Action 3: Agree working rules, such as how updates are shared and how disagreements are raised. This moves the team to norming.
Risk: Forcing a decision may reduce buy-in, so explain the reasons and invite concerns.

Answer: The team is in the storming stage. The leader should agree the method using clear criteria, set clear roles, and agree working rules, deciding firmly where time is short while explaining the reasoning.

Example 2

An experienced senior actuary is promoted to lead a team of highly skilled, self-motivated analysts. She is used to making all decisions herself. Discuss which leadership style she should adopt and why. (5 marks)

Show the solution

Facts: the team is skilled and self-motivated. The leader's habit is to decide everything herself.
An autocratic style gives speed and control but can demotivate skilled people and waste their expertise.
A democratic style involves the team, uses their knowledge and raises commitment. It is slower, so it suits tasks without extreme urgency.
A situational approach would fit best. Use a democratic or delegating style for routine work and a more directive style in a crisis or when a regulatory deadline is close.
Action: Set clear goals and standards, delegate decisions within limits, and review progress regularly.
Risk: Too little direction may let quality slip, so she should keep review points.

Answer: She should move mainly to a democratic or delegating style, adjusting to a more directive one when time is short, because the team is skilled and motivated and her habit of deciding everything would waste their ability.

Exam tips

Always tie the model to the case facts. Marks go for application, not for naming theories.
Give a balanced view: one benefit and one drawback for each recommendation.
In MCQs, watch for absolute words such as 'always' or 'never'. Leadership and conflict answers usually depend on the situation.
Write in the voice of an adviser to the person named in the question, with practical next steps.
Learn two or three models well rather than ten superficially. Team stages, conflict styles and leadership styles cover most questions.

Practice questions from Using data, company functions, people skills, influence and clear communication

People Skills, Teamwork and Leadership: frequently asked questions

Which models should I learn for people skills in CB3?

Learn team development stages, team roles, motivation theories such as Maslow and Herzberg, conflict handling styles and leadership styles. Know each in a line or two and, more importantly, how to apply it to a case.

How do I answer a question on managing conflict in a team?

Identify the cause, such as unclear roles or different goals. Choose a handling style that fits the urgency and importance of the issue, and give concrete steps like a facilitated meeting and clear roles. Note any risk of your approach.

Is there one best leadership style?

No. The best style depends on the task, the time available and the skill and confidence of the team. Strong answers explain why a style fits the facts and when another would be better.

Why does the IAI test soft skills for actuaries?

Actuaries work with colleagues, managers, clients and regulators, so their advice only has impact if they can work with and influence others. CB3 tests whether you can apply business management ideas to such situations.