Actuarial pricing, capital modelling and reserving

Pricing Squad

Issue 32 -- February 2020

Welcome back to Pricing Squad

Pricing Squad is the newsletter for fellow pricing practitioners and actuaries in general insurance.

Today's issue is about a new risk alert.

New Risk Alert -- de-platforming, Silicon Valley tech companies

Do your underwriters write General Liability, Directors & Officers or US Lawyers for mid-range Silicon Valley tech companies (platforms)?

If so, the following risk alert is for you and them.

Description of risk

Platforms routinely engage in de-platforming, or removing content creators deemed in violation of platform guidelines. If these creators receive funds from supporters via the platform, de-platforming them interferes with the contract between creator and supporter. Tortious interference is grounds for customer arbitration or class action against the platform.

In addition, unclear wording and frequent changes to a platform's terms of use may violate Californian deceptive practices laws, e.g. if a platform inserts unconscionable provisions into a contract. When this happens, every single person who is subject to this change suddenly has a claim against the platform.

In a recent case, tech company Door Dash was forced into mass arbitration (and furnishing costs) by a US District Judge, due to its ambiguous terms of use related to arbitration. This was an employment matter involving 5,000 individuals.

Until now, mass customer arbitrations have been rare. However, a recent wave of politically motivated de-platforming led to the emergence of internet communities such as Legal Legion, who pursue actions against platforms on behalf of thousands of supporters of banned content creators.

Iwanik Ltd identified two such recent cases. One dispute involved Indiegogo, a crowdfunding site. The second dispute is being organised in relation to Patreon.

Risk footprint

De-platforming is a material peril due to the sheer number of potential users affected. The Door Dash case involved 5,000 claimants but other platforms may have millions of paying users. Claimants affected by de-platforming tend to be litigious.

The core risk is General Liability cover.

Due to a lack of due care in implementing various publishing guidelines, which could be viewed as detrimental to shareholders, there is also a D&O exposure.

US Lawyers cover may also be affected.

Underwriting recommendations

Review de-platforming practices of internet platforms upon renewal.

Ask us for more information about recent cases we have identified.

Pricing recommendations

Include a question on de-platforming in the submission questionnaire for internet platforms.

Consider extra loads on internet companies with exposure to de-platforming.

10 Downing Street Home Insurance Price Index

From 2020 we are sharing with you the "10 Downing Street Home Insurance Index". This is the simplest insurance price index in the world, and provides the average of the top three aggregator quotes for a single property. Have fun!

This month's winner is Coop. Price index is 0.5% down from last month.

There seems to be a clear negative Boris risk effect followed by a small reduction in property insurance cost becasue of Brexit. But it might also be noise ;-)


Copyright © 2020 Jan Iwanik, All rights reserved. You are receiving this email because you subscribed to updates from We publish data and analysis for informational and educational purposes only. You can unsubscribe from this list by emailing us.