A.M. Best Affirms A++ Rating Of John HancockMutual.

OLDWICK, N.J.--(BUSINESS WIRE)--June 2, 1999--

A.M. Best Co. has affirmed the A++ (Superior) ratings of John Hancock Mutual Life Insurance Co. and its wholly owned subsidiary, John Hancock Variable Life Insurance Co. In addition, these ratings were removed from under review.

These rating actions, published in the June 1, 1999, Best's Rating Monitor, reflect the company's prominent position as a leading provider of insurance and pension products and services, strong earnings performance and excellent asset management expertise. A.M. Best's decision to affirm its highest rating on the organization also reflects the diversity and consistent growth achieved in its core businesses and the success it has had in diversifying its distribution sources. A.M. Best believes these strengths, along with its strong brand identity, will allow John Hancock to continue to successfully compete over the near term as it transitions from its historical mutual ownership structure to public ownership following its planned demutualization in 2000.

Although the company maintains A.M. Best's highest rating, the rating agency believes that John Hancock will likely continue to face significant challenges over the next several years--which could place pressure on its rating. Specifically, A.M. Best believes John Hancock may be challenged to maintain growth in both revenue and earnings as it seeks to further broaden its distribution sources and as it is forced to compete with larger and more diversified retail financial services institutions. A.M. Best also expects that, like many of its competitors, John Hancock will be under increasing competitive pressures to lower the costs associated with its infrastructure, and to enhance the support and services provided to its customers and distributors--while meeting the financial demands of its public shareholders.

A.M. Best also notes that John Hancock could be exposed to potential losses in connection with its participation in a London-based reinsurance pool--although participation in the pool is not a significant area of operations. A.M. Best has reviewed the company's status as a reinsurer in this pool, which was organized by New Jersey domiciled Unicover Managers Inc., and does not expect the company to incur material losses over the near term as a result of its participation. However, the rating agency is concerned about the potential for future losses arising from the workers' compensation claims that are reinsured by this pool--particularly given the large amount of uncertainty that relates to the enforceability of certain provisions and the contractual obligations of the pool's participants. This uncertainty is heightened by allegations of fraud and misrepresentation that have been made against some of the parties involved in the pool.

John Hancock announced a plan in May 1998, to convert from a mutual organization owned by its policyholders to a publicly owned company. This demutualization is planned for early 2000 and is pending regulatory and policyholder approvals. Like several other competitors who have or are pursuing this form of corporate reorganization, John Hancock Mutual Life will likely face some significant challenges in making this transition.

A.M. Best believes that, over time, the company will benefit from its conversion to a public company as a result of the enhanced organizational and financial flexibility associated with public ownership and direct access to equity and debt markets. A.M. Best will follow closely the company's progress as it competes against new competitors in the face of more demanding and shorter-term expectations as a public company, as well as the impact its new corporate structure may have on the company's operations, and consequently its standing among A.M. Best's most highly rated domestic life insurers.

A.M. Best has also affirmed the A++g (Superior) rating of John Hancock's wholly owned subsidiary, John Hancock Variable Life Insurance Co. This affirmation, along with the Investors Partners' rating, reflect the strategic role that these companies serve and the financial support they receive as subsidiaries of John Hancock Mutual Life. John Hancock Variable Life is the vehicle in which the organization's variable products are sold, while Investors Partners is the company through which its broker/dealer activities are conducted. Both companies are viewed by A.M. Best as being core elements of John Hancock Mutual Life's retail life insurance strategy.

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