Liberty Mutual, through one of its fully owned subsidiaries, will initially hold a 26 per cent stake in the new company, while the Dabur group firm — Dabur GI Invest Corp — will hold the remaining 74 per cent.

The foreign partner will look to increase its stake in the general insurance joint venture if the government raises the foreign investment ceiling beyond 26 per cent, sources said.

Dabur GI Invest Corp is an Indian partnership comprising members of the Burman family, promoters and majority shareholders of the over Rs 2,390 crore Dabur India.

Boston-based Liberty Mutual Group is a diversified global insurer and the sixth largest property and casualty insurer in the United States based on direct written premium in 2007.

Mohit Burman, the youngest member of the Burman family and a director on Dabur India board, holds a 74 per cent stake in Aviva Life Insurance, while the remaining equity is held by the UK's largest insurance group.

Liberty Mutual will begin the licensing application process for the new company before the end of the second quarter this year. After approval by the Insurance Regulatory and Development Authority (IRDA), the new entity will operate under the name Dabur Liberty General Insurance Company.

The company will provide multi-line insurance underwriting capabilities to various distribution channels, with an emphasis on personal insurance products such as car, home and personal accident protection, a statement said.

Liberty Mutual Group's international business — which has a presence in 24 countries — reported revenues of around $6.1 billion in 2007. Overall, the Liberty Mutual Group reported annual consolidated revenue of $25.9 billion for 2007.