A.M. Best Affirms A+ - Superior - Rating of Jackson National Life Insurance.

OLDWICK, N.J.--(BUSINESS WIRE)--Aug. 3, 1999--

A.M. Best Co. has affirmed the A+ (Superior) rating of Jackson National Life Insurance Co., Lansing, Mich.

The rating, effective Aug. 2, reflects the company's strong national presence in the individual annuity market, excellent earnings performance, the high quality of its investment portfolio and its sound risk-adjusted capitalization. The company has consistently generated strong earnings results from its primary businesses, largely driven by its cost-efficient operating platform, strong sales results and excellent investment performance.

The affirmation also reflects the company's progress in expanding its product portfolio and diversifying its distribution systems beyond its traditional brokerage network, while also providing enhanced marketing and service support for its traditional producers. As a result of these efforts, total premiums and net operating gains have more than doubled in the past three years. In addition, nearly three-quarters of new business sales are now being generated by new alternative distribution sources, marketing products that Jackson National did not offer in 1994.

The rating also is based on the considerable financial strength and diversified operating profile of the company's ultimate parent, Prudential Corp. plc, London. Prudential plc, which acquired Jackson National in 1986, is the largest life insurance company in the United Kingdom, and one of the leading retail financial services organizations in the world. The organization has more than 10 million customers worldwide, and its global operations generated nearly U.S. $20 billion in gross premiums written and $1.4 billion in operating profits in 1998. The group has operations in the United States and seven Asian countries, in addition to its core businesses in the United Kingdom.

Jackson National is the group's most significant business outside the United Kingdom and plays an integral part in Prudential's strategy. A.M. Best considers Jackson National to be core to the overall operations of Prudential, as it has consistently exceeded the operating expectations of its parent. During 1998, Jackson National accounted for over one-third of Prudential's consolidated sales and nearly one-half its operating profits.

The company historically has concentrated its sales activity in the highly competitive fixed-rate individual annuity, term and interest-sensitive whole life markets. These lines continue to be the primary contributors to the company's strong earnings; however, in the past five years, Jackson National has aggressively pursued initiatives to expand its product offerings and diversify its distribution sources beyond its traditional independent insurance brokerage network. Its distribution model now includes variable, equity-linked and fixed individual annuities sold through broker-dealers, financial institutions and banks; guaranteed investment contracts and funding agreements offered to corporate pension sponsors and other institutions both directly and through intermediaries; and fixed-rate and equity-linked individual annuities, universal life and traditional life insurance marketed by its independent broker network.

In 1998, Jackson National continued its efforts to broaden access to alternative distribution and further developed its capabilities in the broker-dealer market by launching its own full-service broker-dealer, National Planning Corp. NPC expects to grow primarily through strategic acquisitions of other independent financial planning firms and producer groups, as well as through aggressive recruiting of representatives who are not members of the company's key accounts. As part of this new initiative, the company, through an affiliate, acquired SII Investments Inc., one of the nation's 50 largest independently owned broker-dealers with over 500 registered representatives.

A.M. Best views favorably the actions the company has undertaken to broaden the scope and attractiveness of its product offerings, diversify distribution and improve the efficiency and effectiveness of its operations. A.M. Best believes these initiatives position the company well in the increasingly competitive retirement savings market and significantly improve its long-term earnings capacity.

A.M. Best today also assigned an initial letter rating of A+ (Superior) to the company's strategic subsidiary, Jackson National Life Insurance Co. of New York, which began operations in 1998. This rating reflects the company's role as the strategic New York marketing arm for Jackson National, as well as the strong financial and operating support it receives from its parent.

Jackson National Life of New York is a direct wholly owned subsidiary of Jackson National. The New York subsidiary was established in 1996, at which time the parent made an initial capital contribution of $8 million; however, insurance operations did not start until June 1998. A.M. Best views the company as a strategic subsidiary of Jackson National, as it provides the parent additional geographic diversity by expanding the organization's presence into New York, one of the largest markets for financial products and services in the country. A.M. Best also recognizes the significant operating and administrative support provided by Jackson National through its centralized customer- and producer-service units.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.