As an economic hailstormbeats down on the insurance and financial services sectors, it's the tortoise and not the hare that's proving itself the winner these days.

Those who took the steadier road over the last few years—bypassing risky adjustable-rate mortgages and their quick profits, or commercial real estate loans in what are now saturated markets such as Florida and California—are now better positioned to weather Wall Street's skittishness, analysts say.

And woe to those firms that have already been affected by the slowdown; they are the ones that are more likely to continue feeling it through 2008. "Strong banks are getting stronger in this environment, and weak [banks] are getting weaker," says Stuart Plesser, an equity analyst with Standard & Poor's. "Strong capital is critical." Plesser fears for those firms that need to raise capital just to maintain their competitive positions, rather than to expand operations.

But companies that are able to grow are showing great staying power, Plesser says. He points to JPMorgan Chase as one example. A strong balance sheet is providing the firm with an upper hand. "It's moving into businesses in this environment where others are not," he says.

Wachovia, conversely, could be in trouble. The Charlotte, N.C.-based bank has a heavy exposure to credit-card balances that continue to rack up delinquencies every quarter, plus mortgage loans that allowed consumers to pay what they wanted—consumers who are now, in some cases, paying nothing. "Plus [Wachovia's] reserves are low compared to [its] peers," Plesser says.

Banks that may be on the cusp of losses include Bank of America and Zions Bancorp., which in particular speculated in residential-development loans, says Neena Mishra, senior domestic bank analyst with Zacks Investment Research. BofA just sold its prime brokerage operation to BNP Paribas in June for $300 million, about a half-billion dollars less than it had hoped for. "I'm expecting to see more losses in this sector," Mishra says.

Low consumer confidence, plus a sense that insurance may now be a necessity, is also hitting that sector, says Eric Rothman, an equity analyst with Zacks. "[Income from] premiums is under pressure," he says.

Also, insurance companies are heavily dependent on returns from their investments to cover payouts. And with the U.S. stock market hobbled, analysts are favoring companies that have a strong overseas presence and are therefore less exposed to the roller coaster of U.S. equities. That's why Tanjila Shafi, a life insurance equity analyst with Standard & Poor's, believes in Aflac, which earned 70% of its revenue from Japan in 2007, she says.

But investors shouldn't be led to believe there are any guarantees in this sector, especially if instability in the housing market, along with consumer concerns, continues. "They really need some stabilization in home prices so they can stop writedowns and focus on other parts of their business," says Matt Albrecht, an equity analyst with Standard & Poor's. "But that could be a longer process than some people expect."