ING operates in 30 countries and has assets worth $310 billion (Rs 13,00,000 crore). Its revenue earnings stand at $23 billion with net income of $1.5 billion. ING has a representative office in the country.

IDBI, the country's largest financial institution with loans and advances in excess of Rs 37,000 crore, was in talks with five global insurance companies. Besides ING, other companies which had evinced interest for a tie-up with IDBI, included Aegon of Holland, Allstate and Aetna of US and AMP of Australia.

The term-lending institution decided in favour of ING as it is a global financial institution with interest in banking and asset management. It is the largest company among those with which the institution wasnegotiating.

IDBI's entry into general insurance such as fire, property losses and marine insurance will widen services to its clients, who will benefit from "one-stop shopping," sources said. IDBI has a client-base of over 3,000 companies.

According to a blue-print prepared by IDBI, foray into insurance will enable it to consolidate its role in the development of expanding Indian financial markets, leverage corporate customer base and provide a natural corollary to the institution's entry into the banking sector. It will also enable the term-lending institution to increase and capitalise on its profile in the country with a greater control over syndications.

IDBI believes that life-insurance business will be an attractive and priority segment as it makes available long-term funds. The earnings are more stable in this segment, while capital requirements are less stringent.

Though life insurance is a long-term business where break-evens could take six to eight years, the institution believes there arestrategic reasons for entering this sector at an initial stage when the sector is being opened up rather than being a late entrant.

The build-up of brand equity through entry into life-insurance sector could greatly enhance IDBI's profile for its own retail-fund mobilisation, sources said.