You will not often see the companies that make up the life assurance sector use the term "life" any more.

Perhaps the most symbolic event of the past 12 months was the dissolution of the Life Offices' Association. This was once one of the most powerful industry bodies in SA and for years it was a roadblock against the regulation of intermediaries, which it dismissed as no more than giving out dog licences.

The new Association of Savings & Investment of SA encompasses many of the other lines of business in which the "life companies" are active - unit trusts, asset management and linked product platforms. They also all have substantial pension fund administration businesses and actuarial consultancies.

Health-care administration is vital to Metropolitan, and of course to Discovery, for which it is still the anchor business. But Old Mutual recently exited the health-care business though it still offers medical aid products to clients through a partnership with Medscheme.

The life business remains at the heart of these companies because it pays the majority of the income to the agency force and the brokers who support the institutions.

Liberty talks about a "shared distribution" platform run by Ian van Schoor and Bobby Malabie, but in practice about 85% of the total income generated is from the life business.

Liberty CEO Bruce Hemphill realised that the business would have limited growth prospects (other than by cutting costs) if it remained purely a domestic life business, which is why he bought out his partners' share in asset manager Stanlib and set up an African business. This business has had positive cash flows of R8bn at a time when almost R3bn flowed out of the domestic life book.

The lapses and surrenders were so severe that they were R940m worse than actuarial expectations.

It is a good thing that many of the top executives at life offices now come from outside the industry, particularly at Liberty. Hemphill, a former banker, introduced a merchant banking focus into the management of the balance sheet through Liberty Financial Solutions under Giles Heeger, a former colleague of Hemphill at Standard Bank.

It reduced the losses on the balance sheet by R1bn through the judicious use of derivatives. "When you think about it, managing a life assurer is similar to managing a large hedge fund," says Hemphill, "yet most of our competitors don't manage it that way."

For Wilhelm van Zyl at Metropolitan the keys to the life business are retaining the business, managing the productivity of the distribution channel and cutting costs. It does not need the wide suite of products that its competitors need. It still focuses primarily on the mass market, with a niche exposure through Odyssey into the affluent market.

For example, it is the only large financial institution that does not have a linked product platform, though it will introduce a pilot when it takes over funds from the liquidated Ovation platform, in which it once had a share.

Of the big four listed businesses, Metropolitan looks least like a mature business as it has had net inflows every year. It is often seen as a takeover target, but it would hardly be a bolt-on acquisition. It has 1,7m retail life policies and its total recurring premium income annually is a substantial R4,5bn.

Johan van Zyl, the CEO of Sanlam, says that his predecessor Marinus Daling "sold the future" when he sold Metropolitan to Nthato Motlana's New African Capital in 1993. But Van Zyl has built a substantial entry level market business with the old African Life (now Sanlam Sky) and Channel Life.

Sanlam has been easily the best rated of the life offices since Van Zyl took over in 2003. This is partly because it has avoided the mistakes of its competitor Old Mutual as it has remained predominantly a domestic business. It has also been responsible with its surplus capital, giving it back to shareholders instead of squandering it on trophy acquisitions.

Even they couldn't help taking a flutter on the market, though. Its little proprietary trading shop Sanlam Capital Markets made a R35m loss - perhaps no more than a venial sin.

It also runs a series of businesses in the UK, including financial advisers and multimanagers that had a negligible new business margin of 0,07%.

As we went to press only Old Mutual had reported on its trading so far this year. The group schemes business - the premier mass market life business in SA - has continued to show superb returns in the first quarter with a 42% increase in sales.

The big drop came in single premium sales of 13%, as investors avoided lump sum equity investments, traditionally one of Old Mutual's areas of strength.

Old Mutual hopes to improve its footprint with independent advisers with the recent purchase of Acsis, a multimanager and financial planning consultancy.

The SA business, under Paul Hanratty, remains very strong and probably overcapitalised at 3,8 times the statutory minimum. Hanratty took back the lead in sales from Liberty - which is probably irrelevant to shareholders but psychologically crucial for the sales force.

But group CEO Julian Roberts has decided he is needed to co-ordinate the group's long-term savings (life) businesses around the world. His main role initially will be to stem the bleeding at Old Mutual Life in the US, which faces the prospect of a severe impairment of its corporate bond portfolio as former blue-chips such as AIG and Merrill Lynch come under pressure.

The US Life team is making progress, while the sister company in Bermuda is closed to new business. The mainland business has reduced the product set from 56 to 11 and closed the sales hub in Atlanta.

Old Mutual is still extremely undervalued, but it will take a lot to turn market sentiment in its favour. But a few fund managers such as Allan Gray have taken a fresh look at the business.

However, Allan Gray still prefers Sanlam - and it is now Sanlam's largest shareholder.

Chief investment officer Ian Liddle says that rational capital management can make all the difference.