Health benefits as a percent of premium revenues were 82.9% for the fourth quarter of 2007 versus 80.4% in the fourth quarter of 2006, and were consistent with the third quarter of 2007. The health benefits ratio reflects strong revenue growth, solid performance of mature markets, improvements in developing markets as well as favorable reserve development that was similar to recent quarters.
For the full-year 2007, the health benefits ratio was 83.1% compared with 81.1% for the full-year 2006.
Selling, General and Administrative Expenses
Selling, general and administrative expense was $141.5 million or 13.1% of total revenues for the fourth quarter of 2007 versus $114.8 million or 14.2% of total revenues in the fourth quarter of 2006, and compared with $129.9 million or 12.6% of total revenues in the third quarter of 2007.
For the full-year 2007, the selling, general and administrative expense ratio was 12.6% compared with 13.0% for the full-year 2006.
The sequential increase in selling, general and administrative expense is primarily due to an increase in experience rebate expense in Texas driven by two factors: an accrual of $7.4 million associated with the resolution of audit items on all open experience rebate reports for prior years', as previously disclosed in AMERIGROUP SEC filings; and, the experience rebate expense associated with the favorable reserve development in the State.
The total favorable reserve develo
|SOURCE AMERIGROUP Corporation|
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