"There is going to have to be a professionalisation of the agency sales force in Asia," Chris Singleton, the Asia-Pacific head of distribution and marketing at Swiss Re Life & Health said in an interview at the week-end.

Most life insurers in Asia sell their products through agents working on a part-time, commission-only basis.

But industry studies have shown part-time agents to be the least effective and least able to match increasingly complex insurance to client needs or retain long-term customers.

"The costs of distribution this way are just too high and poor productivity is rife," said Singleton whose company, a unit of Zurich-based giant Swiss Re is the biggest player in the global life and health re-insurance market.

Most agents in Asia sell only a handful of the products available from the companies they work for, regardless of the needsof clients who might be sold simple term assurance life policies when they really want investment-linked contracts.

Typically, once agents have sold policies to their immediate family members and close friends, their sales slump dramatically. Meanwhile, more foreign access to local markets stimulated by International Monetary Fund-backed rescue packages to the region will strike at the same time the economic crisis squeezes premium volume, bringing cut-throat competition in its wake.

Foreign firms are queuing up to move into the region to win a slice of Asia's US$70 billion life insurance market which is set to grow at 10 per cent a year in real terms, more than twice the global average, until 2005.

Industry analysts say the combination could make conditions ripe for sales scandals like those which have rocked the industry in the United States and Britain. Life insurers now face bills which run into billions of dollars to compensate consumers duped into buying policies not suited to their needs byagents desparate to earn commissions.

The scandals enraged the consumer lobby and spurred Britain to introduce tough regulations setting training and professional standards and forcing full disclosure of commission earnings on new policies, raising insurers' business costs.

Singleton said life insurers in Asia must overhaul sales practices to become more productive and pre-empt regulatory moves that would push up costs and make it harder to do business. Many insurers have seen their balance sheets ravaged by the econonmic crisis that has wiped billions from equity and property portfolios and seen about 80 per cent wiped off the value of some currencies since the crisis started in July 1997. Regulators in Indonesia, Thailand and Malaysia have called for companies to merge or find new equity partners in order to survive a downturn that analysts reckon will see premium volumes severely underperform previous forecasts over the next two years at least. "To impose the sorts of costs of (regulatory) compliancethat we have seen for example in Britain would be extremely inappropriate given the level of capitalisation of some of the life companies in the region," Singleton said. "Companies have got to put better practices into place before the regulators move in and do it for them," he said.y