UPDATE 1-Blackstone-led group launching insurance agency

NEW YORK, July 7 (Reuters) - A group of private equity investors led by Blackstone Group LP (BX.N) said on Tuesday it is launching a new insurance agency, seeing an opportunity to sell to small businesses and middle-income households.

The group, which also includes affiliates of Goldman Sachs Group Inc (GS.N) and Credit Suisse Group AG (CSGN.VX) (CS.N), said in a statement that they saw a gap in those serving those markets.

The new company will be named Insphere Insurance Solutions and is to be led by former New York Life executive Phillip Hildebrand.

"Insphere Insurance Solutions will be exclusively focused on the under-served small business and middle-income market," said Hildebrand. "This market has been largely ignored by major insurance carriers and agents who have migrated to serve more affluent customers."

Hildebrand is also chief executive of another firm, HealthMarkets, that has 3,500 agents and plans to hire more. The formation of Insphere will give those agents access to a larger portfolio of products, said a company spokesman.

Dallas-based Insphere plans to be up and running by 2010. It is close to signing a marketing agreement with ING Groep NV (ING.AS) to offer ING's term life and universal life products, and is in discussions with a number of other life, health, long-term care and retirement carriers, the company said in a statement. (Reporting by Lilla Zuill, editing by Gerald E. McCormick)