Deepseek R1 and Insurance

Insurance is built on reasoning—from designing risk models to underwriting complex policies, analyzing claims, and even coding advanced analytics.

That’s where Deepseek R1 stands out.

Unlike traditional AI chatbots that focus on fluency and creativity, Deepseek R1 prioritizes logical consistency and structured reasoning—which has big implications for insurance.

Better AI-Assisted Decision Making

Deepseek R1 can help actuaries, underwriters, and analysts break down complex risk scenarios and debug decision frameworks with a logic-first approach.

For insurers working with high-stakes decisions, regulations, and complex datasets, this type of AI reasoning can be a game-changer.

Transparent AI = Smarter Users

Unlike many models that just provide an answer, R1 shows its work—and that’s a big deal.

With Deepseek R1, users can:

✅ Learn from the model’s logic

✅ Spot and correct errors

✅ Guide it to more valuable insights

For advanced insurance applications, understanding the why behind an AI-generated answer is just as important as the answer itself.

AI Transparency: The OpenAI vs. Deepseek Approach

U.S.-based AI companies like OpenAI are working to make AI more transparent, showing users how models arrive at answers.

But too much transparency makes distillation easier—allowing competitors to train new models on AI-generated responses.

To prevent this, OpenAI and others prohibit using their outputs to train competing models in their terms of service.

Deepseek, on the other hand, explicitly allows distillation, prioritizing greater transparency over control, and giving it an advantage over models like o1 (as of this writing, things move fast!.)

Running Deepseek: Proceed with Caution

Running Deepseek on its own platform has serious drawbacks.

It’s based in China, and its terms allow data sharing with the Chinese government. Many insurers are already hesitant to share data with domestic AI providers—sharing it internationally is an even bigger concern.

Deepseek also struggles with user demand due to limited GPU availability, meaning service can be slow or unavailable at times.

A Better Alternative: Running Deepseek Locally

Deepseek R1 is an open-weight model, meaning insurers don’t have to rely on its platform. It can be run locally or within a private cloud, keeping sensitive data fully under control.

For companies handling regulated, proprietary information, that’s a major advantage.

Final Thought

Deepseek R1 proves that open-source, reasoning-first AI is a serious contender for industries that need trustworthy, transparent, and adaptable AI.