American Skandia Responds to Fitch Ratings Action.

Business Editors

SHELTON, Conn.--(BUSINESS WIRE)--May 8, 2002

American Skandia today expressed confidence in its sound financial position and growth prospects despite its disappointment with the decision by Fitch Ratings to lower the company's insurer financial strength (IFS) rating.

Fitch downgraded the IFS ratings of American Skandia Life Assurance Corporation (ASLAC) to A+ (Strong) from AA-. The rating outlook is Stable. Fitch said, "the rating actions primarily reflect Fitch's evolving and heightened concerns surrounding the risk profile of variable annuity and unit-linked products on an industry-wide basis."

"We believe this action was driven by market conditions affecting the entire asset management industry and will have no effect on our investors," said Wade Dokken, American Skandia's president and chief executive officer. "While we are disappointed, we are pleased that Fitch has recognized the security we have designed into our annuities."

Fitch noted, "that over 99% of ASLAC's annuities are backed by assets held in the Company's Separate Accounts which, by law, are held exclusively for the benefit of annuity investors." Fitch continued, "ASLAC also continues to benefit from the low asset-liability matching and investment-related risk inherent in its core variable annuity product," and, "ASLAC's products generally have less aggressive embedded option death and income benefit features than many of its competitors."

Fitch went on to say that its strong rating for ASLAC "continues to reflect the company's reputation as a product innovator and a high-level service provider to its financial planner-dominated distribution" network.

"This action will not have an impact on our day-to-day operations," Dokken said. "We will remain focused on designing and delivering the most innovative financial products in the marketplace and maintaining our position as one of the premier financial services companies in the United States."

Dokken points to several measures illustrating American Skandia's sound financial position:

-- A compound annual growth rate (CAGR) of 33% in assets under management since
1995.

-- Five-year return on average assets (GAAP) of 43 basis points, among the
highest in the industry.

-- ASLAC's adjusted risk-based capital of $221 million (March 31, 2002)-over
five times the required minimum capital levels established by the National
Association of Insurance Commissioners.

The company has already taken steps to ensure its continued growth. American Skandia recently announced a strategic decision to focus on its largest and most profitable variable annuity, mutual fund, mutual fund wrap, and 529 college savings segments. Variable annuities, mutual funds and wrap products are the fastest growing product lines in the independent broker-dealer community, making up 60% of sales in this important channel.

This strategy focuses the company on the segments that helped it become one of the fastest growing financial services companies of the past decade. Since its inception in 1988, American Skandia reached $31 billion in assets under management by the end of 2001. The company achieved the fastest growth in the history of the mutual fund industry when its American Skandia Advisors Funds reached $1 billion in assets under management in less than 18 months from inception.

The areas the company is concentrating on are expected to be among the fastest growing in financial services. For example, the 529 college savings market is predicted to exceed $50 billion in assets under management by 2004. And the mutual fund wrap market is seen growing 20% a year, reaching $30 billion in sales by 2005.

"Our strategic initiative commits all of our resources to our key products and strengthens our relationships in the broker-dealer community," Dokken said. "We're focusing our company on our clients and their success, which in turn will help us maximize growth."

About American Skandia

American Skandia is a member company of Skandia Insurance Company Ltd., a global financial services leader with nearly $60 billion in assets under management as of December 31, 2001. Founded in 1855, Swedish-based Skandia currently operates in 25 countries and is the second-largest seller of investments products to the independent broker-dealer channel worldwide.

American Skandia, a leading U.S. financial services company, pioneered the "multimanager" concept, a fundamentally different approach to investing that makes many of the world's best money managers available to investors. To be selected into the American Skandia lineup, investment managers must meet rigorous investment policy standards that carefully consider performance, process and people.

Variable annuities and variable life insurance are issued by American Skandia Life Assurance Corporation. Variable annuities, variable life insurance and mutual funds are distributed by American Skandia Marketing, Incorporated. Both companies are located at One Corporate Drive, Shelton, Connecticut 06484. Products may not be available in every state and features may vary by state.

Call 1-800-SKANDIA for a prospectus containing more complete information on charges, expenses and tax consequences. It should be read carefully before you invest or send money. Information about the company and its products can also be found on the Company Web site at www.americanskandia.com.