Best’s Commentary: AI Model DeepSeek Could Improve Operating Efficiency Among China’s Insurers, Albeit with Risks

The use of the artificial intelligence model DeepSeek among mainland China insurance companies has the potential to help small to medium-sized carriers improve operational efficiencies. Overall, according to its new commentary, AM Best views the use of DeepSeek as being credit neutral for China’s insurance industry over the short term.

Several of China’s insurers have announced the deployment of DeepSeek for their operations. In its Best’s Commentary, “DeepSeek Could Improve Operating Efficiency of Mainland China Insurers, Albeit with Risks,” AM Best states that it remains optimistic about the opportunities and risks arising from AI technology and views the potential impact of DeepSeek on the country’s insurance industry as being credit neutral.

“DeepSeek could help China’s smaller insurers become more competitive and narrow the technology gap between them and larger players,” said Lucie Huang, senior financial analyst, AM Best. “Other positives for companies’ business profiles could include higher revenue growth, improved data analytics and better customer experience.”

However, the commentary also notes that DeepSeek could have a negative impact on insurers’ ERM. The carriers that fail to identify risks associated with AI models or fail to build appropriate risk frameworks may see a negative impact on their business, particularly with regards to regulatory risk, execution risk and model risk.

The use of DeepSeek also could have a mixed impact on insurers’ operating performance, as significant spending on systems, talent or processes without tangible results could dampen performance. “Outcomes will largely depend on insurers’ ability to allocate resources strategically and in proportion to their operational scale and financial capacity,” said Huang. “Insurers that successfully execute their innovation strategies and manage the balance between short- and long-term profitability will be better positioned from a credit perspective.”

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=352374.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250323195675/en/