ING, the Dutch financial services group, has agreed to sell its Korean life insurance business to one of the country's largest private equity firms for approximately KRW1.84 trillion ($1.7 billion).

The sale to MBK Partners involves the entire Korean life business, but ING will still hold an indirect stake of around 10 per cent in ING Life Korea for KRW120 billion. The Dutch firm has also reached a licensing agreement that will allow ING Life to continue to operate under the ING brand for a maximum period of five years. Over the course of one year, ING will also provide technical support and advice.

The transaction values ING Life Korea at 9.2 times the fiscal year earnings recorded in 2012. ING Life has around 1.3 million customers, more than 1,000 employees and around 6,800 affiliated agents, the firm said in a statement. The sale is expected to result in an after-tax loss for ING Group of around $1.3 billion, to be booked in the third quarter of 2013. It will not have any impact on ING's commercial banking activities in South Korea.

From 2009, ING has been divesting its insurance businesses worldwide, including Canada, Australia and New Zealand, some parts of Asia and Latin America. In May 2013, the firm's US arm listed on the New York Stock Exchange, effectively reducing its stake to around 71 per cent. The company said it will continue to let go of its remaining insurance and investment management units over the next years.