Top psychologist joins insurance startup firm

Lemonade, an insurance startup company based in New York, has hired psychologist Dan Ariely as its new chief behavioural officer, to try and put his ideas into practice.

The insurance company is looking to see if the psychologist, who penned Predictably Irrational in 2008, can help Lemonade create its peer-to-peer system.

Lemonade is expected to launch properly later this year, and is reportedly hoping to bring wealthy investors and those in need of insurance, together.

Mr. Ariely said: “If you tried to create a system to bring out the worst in humans, it would look a lot like the insurance of today. We’ve spent recent years deepening our understanding of honesty and trust, and our conclusion is that insurance is crying out for a makeover.”

Ariely has written a number of successful books about irrational behaviour, and is a professor at Duke University in North Carolina.

The idea behind Lemonade and its intention to be a peer-to-peer insurer is that money its members contribute will be shared out equally.

“Lemonade is saying, this is not our money. It’s really your money. We are the custodians of this money. We will not make a penny more if we deny claims. At the end of the day, the pool belongs to everybody, and if it gets poorer, it gets poorer for everybody,” Mr. Ariely said.

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