American Skandia Responds to Standard & Poor's Ratings Action.

Business Editors

SHELTON, Conn.--(BUSINESS WIRE)--July 30, 2002

American Skandia today expressed confidence in its sound financial position and growth prospects despite its disappointment with the decision by Standard & Poor's (S&P) to place its ratings on CreditWatch with negative implications.

The rating agency said its action "is concurrent with Standard & Poor's revision of its outlook on the U.S. life insurance sector to negative from stable."

"While we are disappointed with this action, it will have no effect on our investors," said Wade Dokken, American Skandia's president and chief executive officer. "We recognize that S&P's revision is affecting the life insurance industry as a whole--it is not reflective of an in-depth analysis of our company."

Dokken noted, "Over 99% of assets in ASLAC's annuities are held in the Company's Separate Accounts which, by law, are held exclusively for the benefit of annuity investors." Dokken continued, "ASLAC's products generally have less aggressive embedded optional death and income benefit features than many of its competitors."

ASLAC's business plan continues to focus on the company's reputation as a product innovator and a high-level service provider to its independent broker/dealer-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 from 1995 through year-end 2001.

-- Five-year return on average assets (GAAP) of 41 basis points through 2001, among the highest in the industry.

-- ASLAC's adjusted risk-based capital of $222 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 is focused 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 focus encompasses the segments that helped American Skandia become one of the fastest growing financial services companies of the past decade. Founded 1988, American Skandia had $29 billion in assets under management as of June 30,2002. 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.

"Our strategic focus commits all of our resources to our key products and to strengthening 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.