* INSURANCE: Insurers will continue to cope with the aftermath of the Northridge earthquake: insured damages of $10 billion and counting. Expect insurance companies to keep seeking repeal of the state law requiring them to offer earthquake coverage. The replacement of combative Insurance Commissioner John Garamendi with Republican Charles Quackenbush has industry hoping for gentler treatment, consumer advocates say. --THOMAS S. MULLIGAN
* INTERACTIVE MEDIA: After nearly two years of hype, business might make money on the Internet global computer network as security systems make it safe to buy and sell electronically. U.S. homes with CD-ROM drives in personal computers could more than double to 10 million. Meanwhile, interactive television will remain stuck in the trial stage; building the much-hyped information superhighway is proving harder than expected. The Southland will become an increasingly crucial center for the burgeoning multimedia industry. --AMY HARMON
* INTERNATIONAL TRADE: California--the nation's biggest exporting state--stands to gain from free trade pacts with Mexico and the rest of the world. Analysts also point to economic recoveries in Japan and Europe as harbingers of more sales there. And the demand for California-made capital equipment, from chips to computers to drill presses, remains high. --PATRICK LEE
* MANUFACTURING: This sector should continue its robust growth, despite concerns about rising interest rates, higher commodity prices and labor shortages. Demand for machine tools remains high. Steel producers, appliance makers and construction equipment manufacturers project higher sales as exports increase. The ongoing strike at Caterpillar is likely to come to a head. --DONALD W. NAUSS
* MARKETING: Advertising agencies will face continuing pressure; ad spending is expected to grow by 6.5%, slightly less than in 1994. Anticipation of increases in auto spending is good news for Los Angeles agencies, which derive a big chunk of revenue from foreign car makers. But account turnover will continue to be a problem generally, as advertisers look for results in a recovering economy. --DENISE GELLENE
* MEDIA: Broadcasting is off to a strong start in 1995, with the so-called "scatter," or short-notice, market for advertising at its strongest in seven or eight years. Cable TV operators, however, will continue to be squeezed by federally mandated rate rollbacks, postponing any significant improvement until the second half. Watch for two new networks, one formed by Paramount and United Television, the other by Time Warner. --KATHRYN HARRIS
* MOVIES: Some observers fret about the large number of films and spiraling budgets. Industry executives expect a good summer. But the challenge will be trying to match or top last summer, which set a record for the number of box-office hits topping $100 million in revenue. --KATHRYN HARRIS
* MUSIC: The continued popularity of alternative rock, rap and pop music will fuel growth. Watch for potential newcomers--notably Viacom--and big changes at lagging RCA Records, with a possible shake-up at EMI. Also, the music arm of the new entertainment firm formed by David Geffen, Jeffrey Katzenberg and Steven Spielberg could begin to take shape soon. --JAMES BATES
* REAL ESTATE: Rising interest rates, the Orange County bankruptcy and a sluggish state recovery could all dampen the residential market after a 14% sales jump in 1994. But pent-up demand and the prospect of either falling or stable prices should help. Improving sales would aid home builders, who face slower growth. Commercial real estate will remain overbuilt. --PATRICK LEE
* RESTAURANTS: Consumers' appetite for value and convenience will continue to reshape the industry, which has been cutting prices and increasing portions. The successful Boston Chicken chain, which is expanding in California, is evidence that the convenience-value formula works. Also, ethnic themes will grow in popularity as Mexican and Chinese food chains expand. --GEORGE WHITE
* RETAILING: Discount chains and some of the better managed department stores will benefit most as consumer confidence continues to build. Also, the long-awaited rebound in apparel sales will materialize as pent-up demand drives interest in new clothing. The planned merger of Ralphs Grocery Co. and Food 4 Less, the owner of Alpha Beta, will create the Southland's largest chain. --GEORGE WHITE
* SECURITIES: The industry faces uncertainty, with rising interest rates battering earnings. Wall Street's fortunes will depend a lot on whether rates keep rising. Look for major reforms in Nasdaq operations. Merrill Lynch faces big liability claims over Orange County's bankruptcy. Goldman Sachs will struggle with over-expansion problems. Expect Prudential Insurance to sell scandal-plagued Prudential Securities. --SCOT J. PALTROW
