What It Really Takes to Build Something New in Insurance

An Entrepreneur’s View from Inside Insurance: Creating What Didn’t ExistAn Interview with an Insurance Entrepreneur

The insurance industry rarely rewards first movers. Innovation is admired in theory, resisted in practice, and often only embraced after proof is undeniable. That reality makes the journey of one insurance entrepreneur, who set out not to improve an existing product, but to create an entirely new category, especially instructive for industry leaders.

For executives tasked with balancing growth, capital efficiency, and regulatory scrutiny, true innovation often feels incompatible with operational reality. Yet history shows that the most durable advantages come not from incremental improvements, but from reframing the problem entirely.

We sat down with a serial entrepreneur, Dave Duley, whose career spans technology, consumer safety, and now insurance, to discuss what it actually takes to introduce something genuinely new into one of the world’s most risk-averse industries, and what insurance leaders can learn from the process.

Learning to Fail Early and Why It Matters

Long before insurance entered the picture, entrepreneurship was a constant. “I started my first company at 12,”  Dave says casually.  Growing up in Flint , Michigan, and seeing the evolution of the auto industry, he determined working for large companies was risky where he would not be ‘”in control.”  By his early 20s, he had launched a technology business well ahead of its time, effectively an early version of today’s on-demand home services platforms.

It failed.

“That was one of the best things that ever happened to me,” he explains.  “I had to learn the difference between a good idea and good timing.  That failure taught me to read the system I was trying to enter — not just build something and assume the market would catch up."

For insurance executives accustomed to long product cycles and actuarial certainty, this mindset may feel foreign. But early failure, Dave argues, builds a critical muscle: learning how systems actually behave rather than how they are supposed to behave.

That lesson carried forward into later ventures, including a home safety company built around a simple but overlooked idea. If building codes require egress windows, why not built-in escape ladders? The company was eventually acquired by the world’s largest ladder manufacturer.

But it was insurance that would test every lesson he had learned.

From Overheard Conversation to New Category

The idea did not come from a white paper or actuarial model. It came from overhearing an older couple on a flight worrying aloud about what would happen if Social Security benefits were cut.

“I remember thinking, ‘Certainly there’s insurance for that,’” he says. “There’s Medicare gap coverage. Why wouldn’t there be Social Security gap insurance?”

There was none.

So, he set out to create one: an annuity that pays a bonus if Social Security benefits are reduced by government action.

What followed was not immediate validation of his PlanGap benefit, but six months of deliberate skepticism. He offered bounties, eventually up to five figures, to anyone who could definitively explain why the idea could not work. No one could.

This phase, he notes, was less about confidence and more about discipline. “I was not trying to prove the idea right. I was trying to prove it wrong before it cost anyone time or capital.”

That process ultimately led him to Milliman.

Building Institutional Trust Before Building Product 

“In insurance, credibility is the currency,” he says. “Without it, you don’t get meetings, carriers, regulators, or reinsurers.”

A chance connection led to an introduction at Milliman, where what began as a courtesy call turned into something more substantial. “They told me, ‘If this works, it’s a new living benefit. That doesn’t happen often.’”

Milliman did not just validate the concept. They helped build the infrastructure around it, including an independent index that allows regulators and carriers to objectively define and measure the benefit.

That independent index proved essential. It created a neutral mechanism that regulators could rely on and carriers could trust, effectively separating the benefit from the sponsor and making it scalable across the market.

“Without that,” Dave says, “this remains a clever idea instead of a real category.”

The Hardest Part Is Not the Product

For many entrepreneurs entering insurance, the technical complexity is intimidating.  Dave argues the opposite.

"The hardest part isn't the product design," he says. "It's that the goalposts keep moving  and they're supposed to.  Insurance runs on consensus, not experimentation."

He walks through the sequence: "First, I had to prove the concept wasn't crazy. I spent six months offering bounties to anyone who could tell me why it couldn't work.  No one could.  That got me the Milliman meeting.  Once Milliman validated it and helped us build the index, we could approach carriers.  Once we had a carrier willing to file, we had to get state approvals.  Once we had enough states, the question became scale. Now that we've scaled, the ask is market adoption — more carriers, more distribution."

This dynamic, Dave believes, is not irrational. It is structural. "Every gatekeeper needs to see that the last gatekeeper said yes. That's not obstruction, that's how risk-averse industries protect themselves.  You just have to be willing to outlast the sequence.”

A Message for Insurance Executives

Asked what he would want industry leaders to take away from his experience; he does not hesitate.

“Innovation departments cannot just exist for annual reports,” he says. “If they are not empowered to engage senior leadership, distribution, and risk management early, real innovation will not survive first contact with the organization.”

He adds that many of the most promising ideas fail not because they are flawed, but because they are introduced too cautiously, and isolated from decision-makers who control capital and distribution.

Still, he remains optimistic.

“What we have proven is that the industry can evolve when incentives, credibility, and persistence finally align,” he says. “It just takes longer than most people expect.”

For executives navigating growth in a mature market, his story is a reminder. Meaningful innovation rarely looks incremental at first.  Sometimes, it starts as an uncomfortable question no one else is asking, and the patience to keep asking it.

When asked about how Insurex has helped him in his journey, Dave responded “I've always looked for people who can pressure-test ideas and tell me what I'm missing. The best partners aren't cheerleaders; they're the ones who make the idea stronger before it goes out the door. Success takes a village.”