AS Prudential’s taipan in Asia, Barry Stowe has learnt to smile a lot – an awful lot. At a sales shindig last month, he endured two hours of being photographed with hundreds of the insurer’s top Asian agents who were anxious to impress their families by being pictured with the boss.

“My face was numb by the end of the evening from all that smiling,” said Stowe. “I must be a famous man in Asia.”

Stowe may not yet be that well known to investors, but he has a huge job at Prudential – one that could have a big impact on Britain’s second-largest insurance group. Nine months ago, the 49-year-old native of Tennessee was poached from the American insurance giant AIG to run Prudential Corporation Asia (PCA), the undisputed jewel in the insurer’s crown.

Set up in 1994 by Mark Tucker – now the Pru’s chief executive – PCA has grown from 150,000 customers to more than 10m. It operates in 13 countries, occupying top five positions in eight, has snatched more licences in the crucial Chinese market than any other foreign insurer, and is the biggest manager of retail funds in Asia outside Japan. Last year PCA, seen as the main engine of future growth, raked in 49% of Prudential’s new-business profits.

Prudential and the hard-driving Tucker are not resting on their laurels. Less than three months after Stowe joined, the genial American set an ambitious target to more than double new-business profits from 2005 levels to over £800m by 2009.

If Prudential’s ambitions are big, so are the stakes. Any disappointments in Asia would be severely punished by investors. Stowe’s predecessor, Mark Norbom, was good but he was fired because he was not great. “In Tucker’s world good is just not good enough,” said one insider. “The challenge is to supercharge the Asian business.”

Stowe is not fazed. “My biggest chal-lenge? Trying to keep Mark Tucker from continually increasing production targets. He thinks making a three-digit increase is a cop-out,” he joked. “But I do not think I am under any more pressure than anyone else in this business. The opportunities are huge for us in Asia.”

Not only are Asian economies booming, but markets are undeveloped. Savings rates are stratospheric, running at 25% of GDP in Vietnam to 17% in the Philippines. In Britain the rate is about 16%. Asia’s middle class has $7,000 billion (£3,500 billion) in cash and savings accounts.

Stowe has addressed two of PCA’s weak spots. He has begun an expansion of health insurance and other protection policies, where margins are 80%-90% against 50% for life insurance. He is also intent on cross-selling more products to customers. “The margin on health insurance has always been there, but businesses miss things. I hope people like Aviva are not reading this.”

Stowe previously ran AIG’s accident and healthcare operation in Asia, gaining a reputation for innovative products. His division made a $2 billion profit in 2005.

It is an impressive record for an executive who is passionate about Asia. This includes collecting neolithic-era oriental ceramics. What started with buying two or three pieces “for fun” has ballooned into a collection of more than 125 pieces. “Every time I walk into a dealer there is a danger I will spend next year’s bonus,” he said.

Understanding Asian culture and how to sell is crucial. Stowe not only knows when to smile, but how to motivate an army of sales agents. In India, these rocketed from 72,000 in March 2006 to 234,000 a year later. Overall, PCA has 335,000 salesmen. The zealous wealth cre-ators also know how to spend – a recent sales conference in Monte Carlo for the top 250 producers included a trip to a Louis Vuitton store, where the agents “stripped the place bare like a swarm of locusts”.

Much of Prudential’s recent success has come from selling unit-linked policies at a time of booming Asian stock markets. The strategy is also less capital intensive than guaranteed policies and has helped PCA to start returning a trickle of cash to the Pru.

But the unit-linked exposure, at two-thirds of the business, has led to concerns. “If the markets turn down, consumers might turn to guaranteed products,” said Sanford Bernstein analyst Bruno Paulson. “Prudential should be able to keep up its growth rates. The big challenge will be to maintain margins.”

Stowe hits back – the exposure is because PCA pioneered the market. “Being first is incredibly important in Asia. It means it is hard for others to catch up.”

He also downplays fears over what would happen if Asian stock markets crashed, describing the sharp falls in the Chinese bourse earlier this year as leading to “barely a blip”.

“If armageddon happens I will be grubbing round for worms. We are not selling products to people who are walking in with wheelbarrows of cash. People are buying protection or long-term products from us and they are not going to be as affected by a stock-market crash. Don’t forget Prudential Asia was built up when the markets were tough.”

Still, PCA has problems. It is losing £40m a year in Taiwan. As interest rates have dived, PCA and its rivals are paying the price for offering high guaranteed return policies in the past. Analysts calculate that the business, Chinfon Life, bought in 1998, is worth £700m less than its value on Prudential’s books.

Prudential also wrote off £120m in good-will on its acquisition of Orico Life in 2001. A strategic review is under way. Stowe admits the market is complicated, but believes he can make Japan, where Prudential is ranked a lowly 35, “contribute”.

There are also frustrations. Prudential would dearly love to increase its stakes in its Indian life insurance and fund-manage-ment ventures with ICICI, but government promises to lift investment limits have so far come to little.

Stowe’s arrival at Prudential came at a sensitive time. The insurer, which rebuffed an audacious and unwanted £17 billion bid from rival Aviva in March 2006, has been under pressure from investors to sort out its struggling British business.

Some, including Hermes, have called for the board to consider spinning off the UK arm from the Asian and American operations. Hedge-fund activists are rumoured to have Prudential, with an £18 billion market value, in their sights. Analysts believe the stand-alone value of the Asian business is about £10 billion.

After a long review, Prudential rejected calls for a break-up and made a commitment to turn round the British business.

Supporters argue that Prudential looks exceptionally well-placed in Asia. “It is difficult to see how they can make a mess of it. If one country goes down the pan they have the advantage of being in so many other places,” said Roman Cizdyn, analyst at Oriel Securities.

Paradoxically, if the Asian business shoots the lights out it could hasten a dismantling of Prudential. “The Asian performance is crucial for the valuation of Prudential. The risk is that if the gap between Asian and UK performance widens then the case for a break-up becomes stronger,” said Paulson.

It is a complex picture. Stowe is upbeat now, but if he fails to hit his targets, forget the smiles – the investors will be frowning.

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