Your SaaS Is an Insurance Product: A Modeling Framework
Capped-usage SaaS products -- LLM subscriptions such as Claude Code and ChatGPT, cloud platforms such as Vercel and Cloudflare Workers, corporate benefit platforms, identity-verification services with liability transfer -- share a structural signature with insurance products: a fixed premium decoupled from realized consumption, stochastic per-user demand with heavy-tailed severity, a non-fungible cap that resets on a fixed schedule, and a portfolio-level exposure that requires reserve adequacy under tail risk. We argue that this is not an analogy. It is the same operational problem actuarial science has been tooled for decades to address, restated with new dependent variables (tokens, ban...
| Authors | Caio Gomes |
|---|---|
| Primary category | cs.LG |
| Published | 15 May 2026 |
| Last updated at source | 15 May 2026 |
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