Fitch Affirms IDS Life's Insurer Financial Strength Ratings at `AAA'.

Business Editors

CHICAGO--(BUSINESS WIRE)--Sept. 22, 2000

Fitch, the international rating agency formed by the merger of Fitch IBCA and Duff & Phelps Credit Rating Company, has affirmed the insurer financial strength ratings of IDS Life Insurance Company (IDS Life) and its wholly owned subsidiaries at `AAA' (see detailed list below). The Rating Outlook remains Negative.

The ratings continue to reflect IDS Life's consistently strong GAAP profitability enhanced by its low cost structure, excellent distribution network, solid capitalization and very good asset/liability management. IDS Life receives explicit capital support from its parent, American Express Financial Corporation (AEFC).

Fitch has had a negative outlook on the life insurance industry for the past two years. In general, Fitch sees a deteriorating credit trend in the life insurance industry due in large part to demographic trends that have led companies to shift their product mix toward lower margin and lower credit profile insurance and non-insurance products. This shift has resulted in increased competition from both inside and outside the life insurance industry. The continuation of the Negative Rating Outlook for IDS Life and its subsidiaries is a reflection of Fitch's broader view of the industry.

IDS Life is one of several product providers for its broader financial services parent, AEFC. AEFC's primary distribution arm, American Express Financial Advisors, has a full range of insurance products, mutual funds and savings products to fill the financial needs of its growing client base.

AEFC's sales results have been very strong but have increasingly come from non-insurance products that in Fitch's view contribute to a lower credit profile for IDS Life. IDS Life's sales have continued to be pressured as they are replaced with sales of mutual funds, advisory and savings-account-type products.

While AEFC's sales favorably reflect the strength of its diversified financial services franchise and its ability to meet the changing product needs of its customers, the trend is also evidence of the general industry pressures in the life insurance segment. While still substantial, IDS Life has contributed decreasing proportions of AEFC's total earnings and is likely to manage capital to meet return expectations of its ultimate parent.

IDS Life was the 33rd-largest life insurer in the United States based on net premiums written in 1999 and the 14th-largest life insurance group based on assets. The company has significant market positions in variable annuities, variable universal life and long-term care insurance.

Insurer Financial Strength Ratings, Rating Outlook Negative,
IDS Life Insurance Company, `AAA';
American Enterprise Life Insurance Company, `AAA';
IDS Life Insurance Company of New York, `AAA';
American Centurion Life Assurance Company, `AAA';
American Partners Life Insurance Company, `AAA'.

Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Corporates, Structured Finance, Insurance, Sovereigns and Public Finance Markets worldwide.