Eagle Star could become the first insurer to sell general insurance on digital television after signing deals with software company Entranet and digital TV firm Telewest.

The direct arm at Zurich expects to have a presence on the application when it launches in the spring. Telewest anticipates reaching four million homes by the end of this year.

Telewest's new service will offer digital viewers access to financial services, books, music, groceries and holidays, as well as other goods and services. It will sit alongside Telewest's 150-channel digital service.

The move also coincides with claims that the UK has become the fastest growing market in the world for digital television take-up – even topping the US.

Microtechnology company Pace has just forecast that by the end of the 2000/01 financial year, penetration of pay TV will reach 25% of the UK population and 35% by 2002-3.

Eagle Star managing director Ian Owen said of the move: "Eagle Star was the first insurance company to allow customers to actually buy their motor insurance on-line, and we're now committed to expanding our internet service to the world of digital TV."

Eagle Star marketing manager Philip Ost said: "This is a very new deal and we are still developing what we are going provide.

"Because it is available on broadband communications it is more reliable, faster and allows you to offer full motion animation, instant video and so on.

"The move has opened a whole new world of media to us. We want to be there first. It is a greenfield site and we are starting with a blank piece of paper and no pre-conceived ideas. Our ultimate aim though is to offer consumers the opportunity to buy our products from the comfort of their armchair."

Ost said that no timetable has yet been set for offering consumers fully interactive insurance buying capabilities.

"We might start with text messages and provide some interactive links. We want to offer consumers the opportunity to buy our products from the comfort of their armchairs."

Steve Scott, head of interactive channels at Entranet, said: "Eagle Star understood that developing a digital television did not mean simply reproducing what it had done on the worldwide web.

"Instead, we have used the entertainment-led nature of television to develop a completely new form of on-line commerce."