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Remember the Woody Allen joke about attempting suicide by inhaling next to an insurance salesman? When Smith Barney's Colin Devine sniffs around insurance, he smells opportunity. That's the reason we pegged this two-time All-Star analyst to explain why he thinks insurance, of all things, is the future of investing.

Begin with a really big -- and really familiar -- number. More than 77 million baby-boomers are going to retire over the next two decades. For most, the issue in their minds is going to be whether they have enough money to last the rest of their lives. Indeed, if you retire today at age 65 and are in good health, there is a 50 percentchance that you or your spouse will survive to age 95. Given the outlook for single-digit market returns and lingering memories of the bear market, boomers are looking for some security. And Devine, 44, predicts that millions of retirees will move their money into variable annuities, particularly a new category of products that give investors guaranteed minimum income for 14 years and a promise of 100 percentof their investment back, plus whatever capital gains were accrued. That arrangement makes the vehicles much more palatable to retirees. Traditionally annuities were questionable for most investors, because they allowed the issuer to make money while shareholders lived on a trickle of income.

The hook, from Devine's perspective, is that a company has to be an insurance underwriter to offer annuities. That's going to mean a huge pool of profits for insurance companies. In the past year, for example, some $140 billion has been invested in these plans, up from less than $50 billion a decade ago. Hartford Financial has seen a 51 percentjump in variable annuity sales over the past year. Lincoln Financial doubled its annuity business. And perhaps the large insurer that is best positioned to take advantage of this trend, says Devine, is Prudential Financial (PRU, $44).

Devine also picked Pru last year and rode it to a 36 percentreturn over 12 months. He remains a believer because Pru has been beefing up its annuity business. Just over a year ago it purchased American Skandia, taking an instant leap from its position as the No. 20 annuity issuer into the top ten. Pru also recently closed a $2.1 billion acquisition of Cigna's retirement-services business that doubled its pension and 401(k) segments; that will boost Pru's already impressive return on equity. Pru is also an increasingly powerful global financial player. Its insurance operations in Japan, for example, now generate 30 percentof the company's profits. The market has yet to register that. Pru shares are trading at just 13 times estimated 2004 earnings, or roughly at book value.