A.M. Best Assigns Initial Debt Ratings to Anthem and Anthem Insurance.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--May 22, 2002

A.M. Best Co. has assigned a debt rating of "bbb+" to the $230 million equity security units issued in October 2001 by Anthem, Inc. (Anthem) (NYSE: ATH).

Additionally, a debt rating of "a" was assigned to Anthem Insurance Companies, Inc.'s (Anthem Insurance) $100 million, 6.750% senior guaranteed notes; an "a-" debt rating to both the $300 million and $200 million surplus notes; and AMB-1 to the $300 million commercial paper program. Likewise, the financial strength ratings of Anthem's active insurance subsidiaries were raised or upgraded to A (Excellent) from A- (Excellent) and from B++ (Very Good). Both companies are located in Indianapolis. These rating actions reflect Anthem's strong enrollment breadth, diversified sources of earnings, solid capitalization, strong operating cash flows and earnings growth.

Anthem is one of the nation's largest publicly traded health benefit companies serving over eight million members. Anthem has demonstrated its ability to turn sub par performing Blue Cross Blue Shield (BCBS) acquisitions into profitable operations. The company retained and augmented membership while growing profits and increasing market share due to its diverse product offerings. Presently, Anthem enjoys leading market shares in seven of its eight markets--ranging from 18% to 47%--and believes there is remaining opportunity to grow profitably in those markets. In A.M. Best's opinion, Anthem will continue to expand through a combination of organic growth and strategic acquisitions in existing and new markets. This is evidenced by the recently proposed acquisition of Trigon, Inc. (NYSE: TGH), Richmond, Virginia.

Anthem's business segments are delineated by areas in the Midwest, Northeast and West where it offers similar products and services. It owns the exclusive right to market products and services using BCBS names and trademarks in these markets.

Anthem's product portfolio includes a diversified mix of managed care products, including health maintenance organizations (HMOs), preferred provider organizations (PPOs) and point-of-service (POS) plans, as well as traditional indemnity products. It offers a broad range of administrative and managed care services and partially insured products for employer self-funded plans. Furthermore, Anthem offers customers several specialty products including group life, disability, prescription management, dental and vision. These diversified revenue sources reduce its dependence on any one customer type or segment.

Anthem's capitalization and financial flexibility are excellent. The insurance subsidiaries have risk-based capital positions well above the minimum required by the BCBS Association. In addition, the company has significant dividend capacity. Demutualization, completed in November 2001, has provided access to the capital markets. A highly successful Initial Public Offering (IPO), in conjunction with the demultualization, raised $2.1 billion through the issuance of 55.2 million shares of common stock and $230 million of capital securities.

Long-term debt to total capital, currently at 21%, is expected to remain at approximately 25% even after the completion of the proposed acquisition of Trigon. Coverage is expected to remain strong at eight to ten times.

Offsetting factors include the potential for somewhat increased financial leverage and integration risks typical of an active merger and acquisition strategy. However, A.M. Best acknowledges the successful, conservative, controlled acquisition and integration strategy applied to prior acquisitions.

The proposed acquisition of Trigon, valued at $4 billion and viewed positively by A.M. Best as it poses virtually no integration risks, will establish a presence in the Southeast and provide significant advantages from an alliance with a profitable, well-managed leader in the use of technology.

Over the long term, Anthem faces increasingly formidable competitors. These continue to build advantages of scale and diversity needed in the ever-evolving health care arena through acquisitions of their own.

The following debt ratings have been assigned:

Anthem Inc.-- - "bbb+" rating on $230 million 5.95% equity security units of

common stock maturing in 2006

Anthem Insurance Companies, Inc.--

- "a" rating on $100 million 6.750% senior note, due July 2003

- Anthem Alliance Health Insurance Company

- Anthem Health and Life Insurance Company of New York

The following subsidiaries' financial strength ratings of A- (Excellent) and B++ (Very Good) have been raised or upgraded to A (Excellent):

- Anthem Alliance Health Insurance Company

- Anthem Health and Life Insurance Company of New York

The following subsidiaries' financial strength ratings have been affirmed at A- (Excellent):

- Anthem Alliance Health Insurance Company

- Anthem Health and Life Insurance Company of New York

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