DATE: Saturday, March 1, 1997               TAG: 9703010259

SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

                                            LENGTH:   36 lines

TRIGON REPORTS FOURTH-QUARTER REBOUND

Helped by higher premium revenues and a sharp rise in investment income, Trigon Healthcare Inc. reported a profit for the 1996 fourth quarter after losing money in the October-December period of 1995.

For the full year, Trigon said its net income plunged 88 percent because of costs related to the conversion from a policyholder-owned company and a special payment to the Commonwealth of Virginia.

As part of a plan for converting from a company owned by its policy holders, Trigon agreed last year to pay the Virginia treasury $175 million to compensate for tax breaks it used for several years.

In late January, the Richmond-based parent of Trigon Blue Cross Blue Shield switched to a publicly traded company and issued 15.5 million new shares in the process. Today it has 42.3 million common shares outstanding.

Trigon, the largest health-care insurer in Virginia, released an abbreviated report of its 1996 results last week. In a more detailed report, Trigon said it earned $50.31 million for the quarter ending Dec. 31, a turnaround from a $2.8 million loss for the comparable period of 1995.

Trigon's fourth-quarter results were bolstered by a 12 percent improvement in revenues from premiums and fees and a 21 percent increase in income from investments.

Like other companies in the managed-care industry, Trigon had to contend with rising medical costs in 1996 and intense competition for new members. Its membership grew 3.4 percent last year to 1.86 million.

For all of 1996, Trigon's net income dropped to $5.69 million from $46.99 million in 1995. Meanwhile, its revenues grew 11 percent to $1.86 billion.

Trigon said its 1996 earnings totaled $195.51 million before accounting for conversion costs and a special payment to the state. That amount was almost four times the $51.7 million earned in 1995 before extraordinary items.

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