I've read a blog entry
'How much variance comes from AI situations?' and my hair stood on end. Dear InsuredPlay owners, either you're deliberately hiding your knowledge of math, or you urgently need to learn the definition of variance (
wiki) -
the variance is equal to the mean of the square minus the square of the mean - and hire a mathematician, preferably a qualified risk manager. It's sad that Quad, a respected blogger, gave a wrong calculation too.
Also, your bubble insurance has a whopping collusion breach. If one of a gang of six players insures a series of 6-max SnGs but the other don't and flip stacks between each other to ensure that the first player finishes exactly in the third place all the time, and then the winnings are divided evenly, it's clear that IP loses lots of money (the team gets 5/6~0.83 BI from IP every time, out of which only 3/5=0.6 BI is spent on rake, in fact much less due to rakeback). The poker room will most likely deem it chip dumping and close the accounts, so I can't do this trick and am honestly sharing it with you, but think twice whether you should insure tourneys at all, especially if you don't have a security team.
Even an honest player can theoretically gain advantage because bubble insurance creates a new, flatter, prize structure for him and he can apply a (tighter) unexploitable strategy tailored to the new structure, while his opponents unaware of IP will use strategies that are close to unexploitable in terms of the original uninsured structure, but exploitable in terms of the new insured structure. All the players will win because they'll de facto play different tourneys, hence only IP will lose.
Such loopholes of course exist in almost any insurance policies but I want to stress that you can't do without checking reliability of signups thoroughly like poker backers and usual insurance companies do.