A.M. Best Takes Various Rating Actions on AMERIGROUP Corporation's HMO Subsidiaries

Business Wire, Oct 8, 2007

OLDWICK, N.J. -- A.M. Best Co. has taken various rating actions on the financial strength ratings (FSR) and issuer credit ratings (ICR) of the health maintenance organization (HMO) subsidiaries of AMERIGROUP Corporation (AMERIGROUP) (Virginia Beach, VA) [NYSE: AGP]. (Please see below for a detailed listing of the companies and ratings.)

These ratings are based solely upon public information and present the most informed view A.M. Best can offer, short of an insurer participating in the full interactive rating process. A.M. Best uses the same rating scale and definitions as it does for its long-term financial strength interactive ratings but applies a pd modifier to ensure the user is aware of the more limited information basis for the rating.

AMERIGROUP's HMO ratings reflect the companies' adequate level of capitalization, positive underwriting performance and relatively consistent operating results attributable to favorable medical loss ratios. Offsetting these positive rating factors are a reliance on government-sponsored programs, which A.M. Best believes could pose future profitability challenges for the organization should reimbursement rates be cut.

The FSR has been upgraded to C (Marginal) from C (Marginal), and an ICR of "b" has been assigned to AMERIGROUP New Jersey, Inc., a subsidiary of AMERIGROUP Corporation.

The FSR of C (Marginal) has been affirmed, and an ICR of "b" has been assigned to the following subsidiaries of AMERIGROUP Corporation:

* AMERIGROUP Maryland, Inc., a Managed Care Organization

* AMERIGROUP Texas, Inc.

The FSR of C- (Weak) has been withdrawn and a category NR-5 (Not Formerly Followed) has been assigned to AMERIGROUP Illinois, Inc., a subsidiary of AMERIGROUP Corporation, which allowed its contract with the Illinois Department of Healthcare and Family Services to terminate.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.