HDFC Life, ICICI Pru Reset Distributor Terms Amid ITC Hit, Bancassurance Impacted

• HDFC Life and ICICI Prudential Life are renegotiating distributor terms, especially in bancassurance, due to GST-driven input tax credit (ITC) loss.
• Bancassurance, heavily reliant on parent banks (HDFC Bank for HDFC Life, ICICI Bank for ICICI Pru), accounts for a significant portion of their APE.
• HDFC Life has completed negotiations with distributors, including banks, and implemented revised commercial terms, expecting full impact by Q4 FY26.
• ICICI Prudential Life's negotiations are ongoing due to its diverse partner base, though the ITC loss has already been absorbed into P&L and VNB.
• Both insurers are shifting focus from volume to value, tracking VNB counter share and seeing strong protection business growth within bancassurance despite overall channel slowdown.

Why It Matters: HDFC Life and ICICI Pru are recalibrating bancassurance terms post-GST ITC loss, focusing on value over volume.