AMERIGROUP Updates 2008 Guidance to Reflect Yesterday's Federal Rese... ( First Quarter Seasonality ...)

AMERIGROUP Updates 2008 Guidance to Reflect Yesterday's Federal Reserve Action

Date:3/19/2008

First Quarter Seasonality Consistent with Expectations

VIRGINIA BEACH, Va., March 19 /PRNewswire-FirstCall/ -- AMERIGROUP Corporation (NYSE: AGP) announced today that it has updated its guidance for the full year 2008 to $2.46 to $2.61 per diluted share from the previously announced range of $2.58 to $2.73 to reflect yesterday's Federal Reserve action reducing the Federal Funds Rate by 75 basis points, which will have a corresponding impact on market interest rates.

"Since we announced our initial 2008 guidance last October, the Federal Reserve has lowered the Federal Funds Rate substantially," said James W. Truess, AMERIGROUP's Executive Vice President and Chief Financial Officer. "We have been able to absorb previous rate cuts by the Federal Reserve in our guidance, we believe yesterday's action will further impact us during the remainder of 2008."

The Company also announced that, while the winter season is not yet complete, medical costs in the first quarter of 2008 have thus far been within the range of historical seasonal patterns. Based on paid claims data for the first two months of 2008, the Company's December 2007 reserves appear to be adequate.

2008 Outlook

AMERIGROUP's updated 2008 annual earnings estimates of $2.46 to $2.61 per diluted share are predicated on the following assumptions, among others:
-- Organic premium revenue growth is expected to be above 15%;

-- Investment income and other revenue growth is expected to be flat to

slightly above the prior year;

-- Health benefits ratio in the mid 83% range of premium revenues for the

full year;

-- Selling, general and administrative expenses below 12% of total

revenue; and

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AMERIGROUP Updates 2008 Guidance to Reflect Yesterday's Federal Rese...( First Quarter Seasonality ...),Health