It's clear where the growth is coming from at Prudential. As part of yesterday's annual sales round-up, Britain's second-largest insurer revealed that its rapidly developing Asian division accounted for 45 per cent of new business last year.

Notwithstanding the broader caveat that Asian growth will slow from 2007 levels, Mark Tucker, chief executive, thinks that this should move past the 50 per cent mark during 2008 as the group continues to target the increasingly wealthy populace in India and China. The UK - a mature and more competitive market - accounts for just over 31 per cent of annual sales. America, the world's biggest insurance market, comes in at more than 23 per cent.

Yesterday's numbers showed Britain to have stood up well amid turbulent investment markets, with the Pru's focus on pre- and post-retirement savers, who are less sensitive to economic slowdown, helping to maintain margins. M&G, the asset manager, also proved resilient, with net inflows of £2billion matching those of the fourth quarter the previous year. Unlike many of its peers, Pru shied away from a push into commercial property funds, which are now being hurt by falling asset values and a rush to redeem.

Prudential's strength at home in 2007 will be difficult to repeat. Last year's numbers benefited from the inclusion of a one-off £1.7 billion bulk annuity deal with Equitable Life. A 17 per cent year-on-year fall in high-margin individual annuity sales also suggests that life is likely to get tougher from here.

However, having been severely derated since the summer, the insurance sector as a whole appears to have been penalised for the fall-out from the credit crunch when there is little evidence that the pain has spread beyond the banks, with the exception of Swiss Re's $1 billion hit from monoline cover. Insurers may be exposed to lower asset values but cashflows are strong and their capital bases are not under threat in the way they were five years ago.

For its part, Prudential, at 14 times 2008 earnings under international financial reporting standards, may be the most expensive UK insurer, but it is also the most profitable. However, that premium also means that an oft-mooted takeover by an American or European rival is unlikely, given the inevitable dilutive effects. The taking of a stake by a Chinese rival, such as Ping An, is more credible. If for no more than its Asian exposure and resilience thus far, Prudential, at 654p, is worth holding.

Alliance & Leicester

Four weeks after shares in Alliance & Leicester (A&L) surged on hopes of a bid from Santander, of Spain, the attention of investors in the £3billion mortgage bank has been steered back to more prosaic matters: further writedowns from the credit crunch.

Yesterday A&L said that losses from structured investment vehicles (SIVs), collateralised debt obligations and other treasury instruments that have turned sour since last summer would be £185million, more than three times the £55 million previously indicated. That is the equivalent of about 22p a share off the bank's book value, one quarter of 2007 forecast earnings and roughly the amount that was removed from the share price by yesterday's 3 per cent fall.

The other setback is that David Bennett, who took over as chief executive only last July on the retirement of Richard Pym, has taken indefinite sick leave. Chris Rhodes, finance director, will stand in. The better news is that A&L, helped by an easing in wholesale money markets, has been able to fund its maturing medium-term debt obligations through to the end of this year, three months longer than before. What is less clear is the impact that this additional funding will have on the bank's margins.

With the dividend apparently safe for now - prospective yield is 8per cent - the bigger issue is whether the shares can sustain their strength.

That depends in part on the appetite of Emilio Botin, Santander's chairman. Payout aside, A&L has little to recommend it: the prospect of increased provisions against its mortgage book, the risk of further writedowns against SIVs and shares that, at 700p, or nine times 2008 earnings, are at a premium to their peers. Avoid.

Eaga

For what should be one of the more defensive stocks in the FTSE 250, Eaga has had a uneasy start to life as a public company. At the beginning of last week, shares in the home energy efficiency specialist, whose biggest customer is the Government, had fallen 31 per cent from last June's issue price. But then Eaga is not the easiest company for the stock market to understand. It was set up as a not-for-profit organisation in 1990 to channel state grants to low-income households to improve the energy efficiency of their homes. That business of managing a single government scheme has since evolved into other activities - mostly installation and maintenance of domestic insulation and boilers - and the addition of utilities as clients.

Yesterday's maiden interims showed Eaga to be very much on track. Sales were up an above-forecast 44 per cent, underpinned by the Government's Warm Front initiative, while underlying operating profits were ahead 21 per cent.

Apart from certainty of revenues - the recent Comprehensive Spending Review has earmarked £800 million for Warm Front over the next three years - Eaga benefits from the twin pressures of new carbon emissions reduction targets on utilities and higher energy prices, which mean the Government must strive harder to meet its self-imposed fuel poverty targets. A multiple of 11 times next year's earnings and yesterday's purchases by directors add to the case. Buy at 151p.

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