American Skandia Takes Strategic Steps to Focus On Its Largest and Most Profitable Business Segments; Company to Concentrate on Core Variable Annuity and Mutual Fund Businesses.

Business Editors

SHELTON, Conn.--(BUSINESS WIRE)--March 15, 2002

American Skandia today announced a strategic initiative that focuses the company on its largest and most profitable variable annuity and mutual fund segments, while curtailing its variable life insurance and qualified plan divisions.

"By focusing on these key industry segments, we'll be able to leverage our existing strengths by dedicating resources to core products and bolstering our relationships in the broker-dealer community," said Wade Dokken, American Skandia's president and chief executive officer. "This move will make American Skandia a stronger company -- one that's more responsive to its clients and better able to maximize growth."

Variable annuities, mutual funds and wrap products make up more than 60% of sales in the independent broker-dealer channel. At American Skandia, variable annuities and mutual funds account for more than 90% of its sales and all of its profits.

After reviewing the scale required to succeed in flexible premium variable life insurance and qualified plans, the company determined it would take too long to achieve scale in these specialty product lines. Instead, American Skandia will increase its investment in its core products. For example, the company plans to expand its field sales force by 40% to 74.

American Skandia said it would stop accepting new Flexible Premium Variable Life Insurance applications on April 1, 2002. The company will, however, continue to offer its single premium variable life insurance product which has seen significant sales since it was launched in 1998. In addition, the company will not accept any new qualified plans after July. In both segments, American Skandia will continue to service existing clients and accept on going investments/premiums. As a result of these changes, about 40 employees, less than 3% of American Skandia's total workforce, will be affected. The company said it expects to place many of these employees in other positions.

"Changes in client needs, technology and market dynamics are radically transforming our industry," Dokken said. "This strategy will allow us to rededicate ourselves to the market segment that helped us become one of the fastest growing financial services companies of the past decade."

Since launching its variable annuity business 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 business after the launch of its family of funds, the American Skandia Advisors Funds, topped $1 billion in assets under management in less than 18 months.

Dokken points out the recent successful launch of the company's XTra Credit Six variable annuity and the American Skandia College Savings Program. The 529 college savings market, for example, is expected to become the fastest growing financial services segment in the next few years, exceeding $50 billion in assets under management by 2004. And the company is concentrating on the mutual fund wrap market, which is expected to grow 20% a year to $30 billion in sales by 2005.

About American Skandia

American Skandia is part of Skandia Insurance Company Ltd. (publ), a global financial services leader with more than $88 billion in assets under management. Founded in 1855, Swedish-based Skandia currently operates in more than 26 countries and is the largest seller of investments products to the independent broker-dealer channel worldwide.

American Skandia, a leader in the U.S. financial services industry, pioneered the "multimanager" concept, a fundamentally different approach to investing that makes many of the world's best money mangers 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. American Skandia offers AS(k)(R), an unregistered group variable annuity issued by American Skandia Life Assurance Corporation, and ASAF(k)(SM), a program available through the American Skandia Advisor Funds. Variable annuities, variable life insurance, AS(k)(R), 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 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.