2008 life insurance outlook: slowly sinking

--negative outlook is underpinned by the expectation tha low interset rates will continue to pressure investment income and the impact of the current turmoil in the credit market. --capital managment and international expansion should continue to be the key drivers for earnings growth growth. --S&P predict 2% growth in life insurance sales in 2008, down from 7% in 2007. --two means of creating spreads, using term structure or chase yield for opting for higher risk investments. because of the flatness of yield curve, a number of life insuers have been loading up on RMBS, CDOs and other ABS backed by RM to juice returns. --Prudential Financial and MetLife are the most likely near term industry consolidators. Prudential Financial ended Q3 with a significant war chest of excess capital.