New Delhi, July 16 -- India's bancassurance engine is beginning to lose momentum, with slower sales at key partner banks weighing on two of the country's largest life insurers even as agency and other distribution channels continue to grow.

Both HDFC Life Insurance and ICICI Prudential Life Insurance Co. Ltd flagged pressure in bank-led distribution on Wednesday as part of their Q1FY27 earnings. Both insurers nevertheless reported healthy growth in the first quarter, with the pressure concentrated in bank-led distribution rather than their broader businesses.

The slowdown comes as the insurance industry faces growing scrutiny over its dependence on bank partnerships and the commissions paid to distributors. The Reserve Bank of India rec...