The ING Group decided to enter Indian in the early nineties, around the same time as liberalisation began. The group is involved in almost all sectors of thefinancial world. We decided to set up the banking operations first and have now established an office for the insurance business.

ING plans to offer the complete range of financial services to the Indian consumer. From corporate banking, to consumer banking. From credit cards to to insurance. Our basic strategy is to meet every financial need of a householder. This is how we operate across the world. ING is also planning to set up an asset management company in India which will launch a mutual fund. We want to be active players in the mutual funds sector as well.

The indications are that the Government will allow only a minority stake to a foreign partner in a joint venture in the insurance sector. What is the minimum level of equity which will be acceptable to you?

I think it is too early to discuss this issue. We have yet to tie-up with an local partner. We think that the Malhotra Committee report sets out all the important parameters for the entry of foreign companies in India. We will go byit.

One apprehension being raised about the entry of foreign insurance companies is that they will focus only on the relatively rich parts of the country. The rural areas will be left for the Government-run companies. Do you agree with this scenario?

Our company will do a comprehensive evaluation of the market in India. We would like to go beyond the markets in the metros. Also, I don't think it is correct to see it in rural and urban terms alone. I think this debate will prove to be futile because there is enough evidence to suggest that the rural market cannot be ignored.

Look at the way foreign companies advertised their products during the recent Kumbh Mela in Hardwar. Foreign and Indian brands were jostling for a slice of the market which is considered rural. Studies have shown that the paying power of rural populace is on the rise. In fact the insurance products are in direct competition with consumer goods. With the same disposable income, the individual will have to make a choice betweenspending now or saving through insurance products to spend later. Insurance companies will finally go where business lie. Market forces will take them into the rural areas.

The paying power of the non-urban areas may be on the rise, but they still cannot afford highly-priced products. What will be your pricing policy?

I agree. Many foreign consumer goods companies have come to grief for not reading the spending patterns of the consumer correctly. We will avoid these mistakes.

The pricing of an product in life insurance depends on three parameters. The mortality rate; the investment earnings; and the operational expenses. Insurance companies depend on the earnings from their investments for survival. The returns possible from investments in India will also depend on how well the economy is doing. Of course, any company will have to keep their operational expenses down to boost their bottomline.

ING will try to keep the paying power in mind while deciding the prices of its insurance products. Ofcourse, these three parameters will largely determine the final figure.