The $50 Million Upside: The Startup Cracking the Honesty Code

Imagine, for a second, that an insurer could reduce claims volume by 2% and average claim value by another 2%. In the high-stakes world of insurance, those "tiny" numbers represent a massive $50-100M yearly windfall for a typical large carrier.

HonestyPledge, a Swiss startup, is cracking the Honesty code with a patented, AI-backed plugin that prevents large part of the costly dishonesty in claims - at its source. While still early days for the startup, the results with a select group of early-adopter clients have been groundbreaking.

The breakthrough is the product of a founding team of serial entrepreneurs with over a decade of experience at the intersection of business integrity and tech. By leveraging behavioral science and AI mechanics, they have built a system that doesn't just analyze data - it influences human honesty.

The Blind Spot of Detection

The insurance industry - or any industry for that matter - is trapped in a ‘detection loop’. They spend millions every year on massive staff and sophisticated anti-fraud software dedicated to spotting red flags. The result? Less than 1% of claims are confirmed as fraudulent.

The reason nobody has solved this before is simple: those in charge only have experience with detection, and detection only works on what is suspicious. However, the bulk of dishonesty comes from the, say, 10% of customers who "fudge" claims. These claims are non-suspicious and therefore non-detectable. And since they look perfectly honest, the industry has historically failed to address them, focusing on detecting dishonest behavior deep into the claims process after the ‘damage has been done’.

HonestyPledge instead prevents the dishonesty that everyone else would fail to detect, shifting the focus from searching in haystacks, to influencing judgements. As Dan Ostergaard, founder of HonestyPledge, puts it: “The skills and the technology required to prime people for honesty, are very different from those needed to detect dishonesty’.

Two-Second Psychological Circuit-Breaker

HonestyPledge doesn't wait for a claim to be filed; it primes people to stay honest before the claim is even formulated. The solution delivers a two-second positive intervention, built on behavioral science.

By appealing to users' moral compass through a variation of adaptive and subtle images, text, and speed-based methods, HonestyPledge analyzes millisecond behavioral clues in real-time to trigger moral reflection when it matters most.

The honesty algorithm is continuously updated with latest behavioral science and industry data to stay ahead of evolving user behaviors, where others have failed; miss a beat with timing or deliver a slightly off signal, and it will backfire; customers will retaliate and cheat even more.

The platform is built on science, validated with academic rigor, and proven in real-world settings. While earlier version was tested in a Harvard study, the HonestyPledge is backed by a randomized control based trial (RCT) study by Yale faculty – the gold standard for measuring impact, showing that HonestyPledge substantially reduces dishonesty.

In a real-world setting, European insurers have seen a 3-5% drop in both claims volume (frequency) and value (severity), compared to a randomized control group, delivering multi-million dollar bottom line savings.

This unique approach is protected by IP, including patent, copyright and trademarks, ensuring it remains a distinct, high-barrier advantage for its partners. Google funded its move to Google Cloud, providing the enterprise-grade infrastructure needed to scale this across millions of monthly transactions.

A New Global Standard for Honesty

While insurance is the most immediate financial beneficiary, the implications of this "integrity layer" are vast. Because the API is platform-agnostic, it can be deployed across every sector where "fudging the truth" has become a structural cost, such as consumer loans, exams, e-commerce, reviews, travel expenses, time reporting, as well as social benefits and job applications.

Beyond the intervention itself, the system provides visibility into the "Invisible 10%." Clients access a real-time dashboard that translates millisecond behaviors into actionable intelligence, providing granular behavioral insights and savings tracking.

Why This is a C-Suite Priority (And Why Fraud Teams Push Back)

While it is tempting to hand this technology to a Fraud Department, the financial logic and personal interests suggest otherwise. Although the HonestyPledge delivers new behavioral and predictive insights to Fraud Departments, the HonestyPledge 10x performance over detection creates internal pushback: the technology is perceived to undermine traditional detection work, albeit with much greater savings and without the fixed costs. 

For a CFO or COO, however, a prevented claim is the ultimate win for the bottom line. To ensure this disruption delivers its $50-100M potential - and a multiple of that for the larger ones when including derived effects - it must be treated as a strategic P&L initiative, managed by C-Suite leaders who prioritize EBIT and the Combined Ratio over departmental detection stats.

As transactions move online and people cheat more online – increasingly supported by AI - the need to make people stay honest in the first place, has never been greater.