A.M. Best Affirms Ratings of Hartford Life, Inc.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 16, 2002

A.M. Best Co. has affirmed the financial strength ratings of A+ (Superior) of Hartford Life Insurance Company, Hartford Life and Accident Insurance Company, Hartford Life and Annuity Insurance Company and American Maturity Life Insurance Company (together known as Hartford Life, Inc. or HLI). Additionally, A.M. Best has affirmed the financial strength rating of A (Excellent) of Hartford International Life Reassurance Corporation, reflecting its strategic and operational links with HLI. Also affirmed are Hartford Life, Inc.'s "a+" senior debt rating, "a" subordinated debt rating and "a-" trust preferred securities. All ratings have been assigned stable outlooks, and all companies are located in Hartford, CT.

The ratings reflect HLI's robust market position in the U.S. life insurance and savings markets, its strong earnings capability, good quality investment portfolio and adequate capitalization. As a member of the Hartford Financial Services Group, Inc. (HIG) (Please see related press release on HIG), one of the largest and most well-known U.S. multi-line insurance organizations, HLI benefits from its parent's financial flexibility and access to capital markets. Furthermore, HLI derives considerable franchise value from being associated with HIG's well-regarded and strongly performing U.S. property/casualty operations.

HLI is a leading player in the U.S. savings and retirement market -- particularly the individual annuity market -- and has a strong position in individual life, corporate life and certain group benefit segments as well. During the late 1990s, HLI's aggressive pursuit of variable annuity business contributed to rapid balance sheet and earnings growth but increasingly exposed the company to the impact of significant equity market movements. HLI derives roughly half of its operating income from individual annuities (primarily variable), and this business' profitability has suffered during the prolonged market slump. However, earnings from HLI's other core business lines have grown, reflecting their underlying strength and the benefit of acquiring Fortis Group's variable life and mutual fund businesses (and variable annuity operations) in 2001. HLI's net income --like much of the U.S. life/health insurance industry -- has been hurt by investment losses the past few years due to deterioration in the U.S. economy. While A.M. Best believes HLI's near-term earnings could remain affected by ongoing economic uncertainty, the longer-term expectation is for HLI to demonstrate stronger performance.

A.M. Best views HLI's risk-based capital position as having become weakened relative to peers. Although nominal capital and surplus rose to $3.0 billion at year-end 2001 from $1.7 billion in 1997 (including the impact of a combined $1.2 billion capital infusion from HLI and HIG in 2001 to help finance the Fortis transaction), this increase has been offset by rapid balance sheet expansion, lackluster statutory earnings due to growth-related surplus strain and heightened GMD (guaranteed minimum death benefits) and other reserve increases for variable annuities and investment losses. Additionally, HLI's financial leverage in the mid-20% range and HIG's leverage of around 30% have created ongoing needs for subsidiary dividends, thus limiting the ability of the operating insurance companies to accumulate surplus. A.M. Best expects HIG to infuse additional capital into HLI over the near term to ensure its life operations remain acceptably capitalized. Furthermore, A.M. Best expects HLI to build and maintain more robust capitalization over the next two years mainly via improved statutory results, and if needed, financial support from HIG. Should these improvements not materialize, HLI's ratings are likely to come under pressure.

For a list of Hartford Life, Inc.'s debt and financial strength ratings, please visit http://www.ambest.com/press/hartford.pdf.

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