Life insurers really ought to be a defensive investment, providing acceptable long-term capital growth and an attractive yield. Regardless of the current economic problems, demographics remain solidly in their favour. Britain and Europe are ageing. Asia is getting rich, but lacks much in the way of public life, health or pension provision.
So they should do well. But the short-term picture is clouded by a disturbing economic outlook and questionable management at some of the bigger companies.
Take Prudential. It has been very quiet, and no wonder after the spectacular mishandling of its bid for Asian insurer AIA, which cost its shareholders more than £400m in fees.
The institutional arrogance that disfigured the company for years and appeared to be ebbing under previous chief executive Mark Tucker has returned with a vengeance.
This is a real issue for investors, because it has led to a succession of missteps down the years, from being the biggest mis-seller of pensions by far through the poorly handled bid for American General through to AIA (which ironically hired Mr Tucker after it floated).
Prudential trades at 1.8 times the value of its in-force book of business, and offers a prospective yield of 3.9 per cent. Can Asia's economies continue to thrive as the rest of the world stumbles? Debatable. But even if they can, this column would avoid Prudential until its board grows up a bit.
The other big international conglomerate in the sector is Aviva. It is under a huge cloud because of its exposure to Europe. Investors have been fretting about its Italian operation and how that country defaulting on its debt would affect the company.
Even so, a look at its surplus capital over regulatory minimums suggests that it could actually handle quite a big haircut.
It is fair to say that the City does not have the greatest confidence in management, led by chief executive Andrew Moss, who turned down a £5bn bid proposal for the general insurance business last year. General insurance accounts for about a quarter of Aviva's business. The company is currently valued at just above £8bn. So in other words, Aviva could have received £5bn for a business currently on its books for notional £2bn.
The City won't tolerate that sort of mathematical oddity for long. Mr Moss needs to pep up the share price fast or he'll be out (or facing a bid). Hiring Trevor Matthews (ex Standard Life and Friends Provident) was a good move, though. The shares, trading at just 70 per cent of the business's book value, and offering a prospective yield of 8 per cent, are far too cheap. Buy.
Legal & General doesn't offer that kind of value. But then the City has confidence that it is a solid, well-run business which has a tendency to beat expectations. With plans to take its stock exchange index-tracking business overseas, where there is a huge growth opportunity, and a very good UK operation, there's not much to dislike. Its chief executive Tim Breedon leaves next year, which is unfortunate. But bank on L&G finding an acceptable successor. It is no screaming bargain at 1.18 times book value, but with a tasty (and growing) prospective yield of 5.6 per cent, L&G is a good buy.
Not so much Standard Life, which is slightly cheaper (1.15 times book) but yields better (6.7 per cent prospective). There have been problems with its flagship pensions offer and David Nish, chief executive, has still to prove that he's in the same league as predecessor Sandy Crombie. Still, we'd hold for now.
Old Mutual is flush after selling off its Nordic businesses at a very good price. A hodge-podge of South African life insurance, banking and other odds and ends, it is inexpensive (trading at about 80 per cent of book value) but there is a lot of work to be done in making this business look like a sensible investment. The prospective yield, 4 per cent, is poor. Not one for us.
St James's Place Capital looks expensive by any metric you'd care to use and offers a prospective yield of just 2.4 per cent. It is an oddity, majority owned by Lloyds Banking Group, and selling to wealthy individuals through an army of financial salesmen who have been pouring new business on to its books. SJPC regularly exceeds expectations but is probably fully priced, though its shares have fallen a bit recently.
Resolution, like Aviva, is technically undervalued. It trades on under 60 per cent of its book value and yields an impressive 7.7 per cent. Perhaps it is no wonder founder Clive Cowdery recently bought a big chunk of shares.
The trouble is, it is based in Guernsey and pays Mr Cowdery and friends a pretty penny for managing it through a contract that looks eccentric to say the least. Then there is the question of whether it has finished its acquisition spree or not. Who knows. If value's your thing, Aviva's a much better bet until a lot of questions about this company have been resolved.