ICICI Pru Life says StanChart ‘values’ tie-up amid talk the bank may exit as distributor

Mumbai: Amid speculation that Standard Chartered may end its bancassurance partnership with ICICI Prudential Life Insurance, the insurer’s chief distribution officer Amish Banker said on Wednesday that the foreign lender “values” the decade-long relationship, even as he stopped short of commenting on its future.

“This is a partnership that we’ve developed over the last 10 years,” Banker said in a post-earnings analyst call, adding that the deep integration across technology products, processes, and customer service is not something that is “trivial” and requires a lot of effort across both teams. “They value the distribution, partnership that they have with us, and we continue to look at building it, going forward.”

Prudential and Standard Chartered operate one of the most successful pan-regional bancassurance partnerships across 11 markets in Asia and Africa. Conversations around Standard Chartered exiting started after co-promoter Prudential’s decision to acquire 75% stake in Bharti Life Insurance, which will require the UK group to cut its nearly 22% stake in ICICI Prudential Life to below 10% per regulatory requirements.

Reports suggested that Standard Chartered may also move its third-party business Bharti Life in line with Prudential. As such, regulations allow banks to distribute products of three insurers of each category—life, non-life and health—and currently ICICI Pru Life is Standard Chartered’s only life insurance tie-up.

On 6 July, the insurer’s board approved reclassifying Prudential Corporation Holdings as an “investor” instead of “promoter” while also approving renaming the company to ICICI Life Insurance.

Banker insisted that all distribution partners are important for the insurer, which aims to be “the most partnerable life insurance company”. For this, the company continues to invest in areas such as seamless onboarding, digital capabilities, strong customer service support, product propositions, and is also working to build the agency distribution network.

As such, the company was confident that the distribution remains fairly diversified. While promoter ICICI Bank continues to contribute the maximum business at around 15%, outside of which “most channels contribute 5% and less” to the business.

ICICI Prudential’s distribution network includes 1,500 partnerships, including 52 banks. The bancassurance channel accounted for 27.4% of the total annualized premium equivalent (APE) in Q1 FY27, lower than 29.7% in the corresponding quarter of the previous year. The management attributed this to “continued recalibration of business at some of our partner banks,” which they said was as a normal part of the business cycle.

ICICI Prudential reported a 27.8% year-on-year rise in its standalone profit to ₹386 crore for Q1 FY27. Shares of the insurer jumped following the results, ending 4.2% higher at ₹525.15 on the NSE.

Demand shift

During the first quarter of the current fiscal year, the insurance company saw a shift in demand trends due to elevated market volatility and high rates on fixed deposits and other debt investment products.

“Ongoing global geopolitical uncertainties and volatility in the equity market influence customer investment preferences during the quarter, leading to a shift in the overall product mix,” chief financial officer Dhiren Salian said.

Non-participating savings products are “really not selling at this stage”, Salian said, adding that non-par savings products offering a fixed, guaranteed return, had lost customers to fixed-income alternatives whose “sticker price” now looks more attractive. The sticker price is simply the headline return a customer sees when comparing products at the counter.

“The environment is such that there are products on the fixed income side that at this point are a little more lucrative for the customer— purely from a sticker price perspective,” Salian said, adding the drag would ease only “if the alternative investments do tend to become a little more benign in terms of rates.” Until then, the company would keep repricing across tenures and “building that category” for the longer term.

The comment explains an otherwise strong quarter’s uneven internals.

Savings annualized premium equivalent (APE) grew 5.8% year-on-year to ₹15.4 billion, and non-linked savings including annuity was broadly flat at ₹4.94 billion, with the mix tilting towards participating products. Overall, the savings mix fell to 72.1% of APE from 78.1% a year earlier.

Protection did the heavy lifting. Retail protection surged 60.4%, a third straight quarter above 40%, aided by the GST exemption on protection premiums. This lifted value of new business (VNB) 24.9% to ₹5.71 billion and VNB margin to 26.7%, a 200-basis-point expansion over FY26. Profit after tax rose 27.8% to ₹3.86 billion, and solvency was 225.4%. Management reiterated it has “no margin fixation”, targeting absolute VNB growth instead, and offered no full-year guidance.