<PAGE>

                                                                    Exhibit 99.1

                             TRIGON HEALTHCARE, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

                              Financial Statements

                           December 31, 2001 and 2000

                   (With Independent Auditors' Report Thereon)

<PAGE>

                             TRIGON HEALTHCARE, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

                                Table of Contents

<TABLE>
<CAPTION>
                                                                        Page

<S>                                                                       <C>
Independent Auditors' Report                                              1

Statements of Financial Condition                                         2

Statements of Income and Changes in Plan Equity                           3

Notes to Financial Statements                                             4
</TABLE>

<PAGE>

                          Independent Auditors' Report

The Human Resources, Compensation and Employee
   Benefits Committee of the Board of Directors
Trigon Healthcare, Inc.:


We have audited the accompanying statements of financial condition of the Trigon
Healthcare, Inc. Employee Stock Purchase Plan (Plan) as of December 31, 2001 and
2000, and the related statement of income and changes in plan equity for each of
the years in the three-year period ended December 31, 2001. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan as of December 31,
2001 and 2000, and the income and changes in plan equity for each of the years
in the three-year period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.

/s/ KPMG LLP

Richmond, Virginia
April 19, 2002

                                       1

<PAGE>

                             TRIGON HEALTHCARE, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

                        Statements of Financial Condition

                           December 31, 2001 and 2000
<TABLE>
<CAPTION>
                                                                                        2001                2000
                                                                                  -----------------   -----------------
<S>                                                                             <C>                   <C>
Assets:
    Investments, at fair value -- Trigon Healthcare, Inc. Class A
       common stock (cost, $5,026,692 and $3,817,097)                           $       11,646,319          11,639,866
    Contributions receivable:
       Employee                                                                            352,118             298,396
       Employer                                                                             62,138              52,658
                                                                                  -----------------   -----------------
            Total assets                                                        $       12,060,575          11,990,920
                                                                                  =================   =================
Plan equity                                                                     $       12,060,575          11,990,920
                                                                                  =================   =================
</TABLE>

See accompanying notes to financial statements.

                                       2

<PAGE>

                            TRIGON HEALTHCARE, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

                 Statements of Income and Changes in Plan Equity

                 Years ended December 31, 2001, 2000, and 1999

<TABLE>
<CAPTION>
                                                                    2001                2000                1999
                                                            -------------------   -----------------   ----------------
<S>                                                          <C>                  <C>                 <C>
Income:
     Net unrealized appreciation (depreciation)
       in fair value of investments                          $    (1,203,142)         7,261,492            (545,397)
     Contributions:
       Employee                                                    1,644,267          1,458,296           1,383,148
       Employer                                                      290,165            257,347             244,085
                                                             -------------------  -----------------   -----------------
            Total contributions                                    1,934,432          1,715,643           1,627,233
                                                             -------------------  -----------------   -----------------
            Total income                                             731,290          8,977,135           1,081,836
Distributions to employees                                           661,635          1,000,763             339,492
                                                             -------------------  -----------------   -----------------
            Net increase in plan equity                               69,655          7,976,372             742,344
Plan equity, beginning of year                                    11,990,920          4,014,548           3,272,204
                                                             -------------------  -----------------   -----------------
Plan equity, end of year                                     $    12,060,575         11,990,920           4,014,548
                                                             ===================  =================   =================
</TABLE>

See accompanying notes to financial statements.

                                       3

<PAGE>

                             TRIGON HEALTHCARE, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

                          Notes to Financial Statements

                           December 31, 2001, and 2000


(1)    Summary of Significant Accounting Policies

       (a)    Organization

              The Trigon Healthcare, Inc. Employee Stock Purchase Plan (Plan)
              was adopted by the Board of Directors and approved by the
              shareholders of Trigon Healthcare, Inc. (Company) in April 1997
              for the purpose of providing a means by which the employees
              (Participant) of the Company and its subsidiaries can be given an
              opportunity to acquire the Company's Class A common stock (Common
              Stock) through payroll deductions.

              The following are the significant accounting policies followed by
              the Plan:

       (b)    Basis of Accounting

              The financial statements of the Plan are prepared under the
              accrual method of accounting. Accordingly, employee contributions
              to the Plan are recorded as of the date the contributions are
              withheld from the Participants' compensation. Employer
              contributions are recorded as of the last day of each calendar
              quarter and represent the fifteen percent discount given to
              Participants under the Plan's provisions. Distributions to
              Participants are accounted for at the average historical cost of
              the Common Stock distributed, plus cash paid in lieu of fractional
              shares, where applicable. Cash paid by the Company in lieu of
              fractional shares is accounted for at the fair market value of the
              shares at the time of the distribution. The Company will also
              separately refund to any withdrawing Participant employee
              contributions, which have been withheld but have not been
              forwarded to the Plan for the purchase of Common Stock.

       (c)    Investment Valuation

              The investments in Common Stock are stated at fair value, based on
              the closing price on the New York Stock Exchange on the last
              trading day of the year. Investment transactions are recorded on a
              trade date basis.

       (d)    Administrative Expenses

              The Company pays all administrative expenses of the Plan.
              Administrative expenses incurred by the Company during 2001, 2000,
              and 1999 were $25,390, $18,460, and $16,870, respectively.

       (e)    Use of Estimates

              The preparation of financial statements in conformity with
              accounting principles generally accepted in the United States of
              America requires management to make estimates and assumptions that
              affect the amounts reported in the financial statements and
              accompanying notes, including disclosure of contingent assets and
              liabilities. Actual results could differ from those estimates.

                                       4                             (Continued)

<PAGE>

                             TRIGON HEALTHCARE, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

                          Notes to Financial Statements

                           December 31, 2001, and 2000


(2)    Summary of Significant Provisions of the Plan

       The Plan is an employee stock purchase plan and is intended to qualify
       under Internal Revenue Code (Code) Section 423. The Plan is administered
       by the Human Resources, Compensation and Employee Benefits Committee of
       the Company's Board of Directors (Committee). The Common Stock owned by
       Participants prior to withdrawal from the Plan are held in individual
       participant accounts in a custodian account with Employee Investment
       Plans Division of The Bank of New York (Custodian). Participants should
       refer to the plan agreement and prospectus for a more complete
       description of the Plan's provisions.

       The Company has reserved for issuance and purchase by Participants under
       the Plan an aggregate of one million shares of Common Stock. These shares
       are authorized but unissued. Shares needed to satisfy the requirements of
       the Plan may be newly issued by the Company or acquired by purchases at
       the expense of the Company on the open market or in private transactions.
       During 2001, 2000 and 1999, all shares needed to satisfy the requirements
       of the Plan were purchased on the open market. The Company paid the
       difference between the purchase price in the open market, including
       brokerage fees, and the amount provided by the employee and employer
       contributions.

       Any person who is employed by the Company (or by any eligible subsidiary
       of the Company) is eligible to participate in the Plan on the first day
       of any payroll period following the employee's commencement of
       employment. A Participant may make voluntary contributions to the Plan in
       whole percentage amounts ranging from one to fifteen percent of
       compensation for the year. Under Code section 423(b)(8), a Participant is
       limited during a calendar year to Common Stock purchases of no more than
       $25,000 determined by the fair market value of the shares at the time
       such rights are granted. The Plan had 1,056 and 790 Participants as of
       December 31, 2001 and 2000, respectively.

       Payroll deductions are accumulated by the Company during each calendar
       quarter and transferred to the Plan at the end of each calendar quarter
       to be applied towards the purchase of full and partial shares of Common
       Stock. The purchase price per share at which Common Stock shares are
       acquired by Participants equals the lower of (a) eighty-five percent of
       the fair market value of a share of Common Stock on the first trading day
       of each calendar quarter (Grant Date), or (b) eighty-five percent of the
       fair market value of a share of Common Stock on the last trading day of
       each calendar quarter (Investment Date). The Plan defines fair market
       value to be the closing trading price of the Common Stock on the New York
       Stock Exchange as reported in the Wall Street Journal. Participants are
       fully vested in their individual participant accounts at all times and
       have the right at any time to obtain certificates for full shares of
       Common Stock in these accounts.

       Participants may cease participation in or withdraw shares from the Plan
       at any time, but may not begin payroll deductions again for six months. A
       Participant may change the payroll deduction percentage up to four times
       per year. Participation in the Plan is automatically terminated upon
       retirement, termination of active employment or death.

                                       5                             (Continued)

<PAGE>

                             TRIGON HEALTHCARE, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

                          Notes to Financial Statements

                           December 31, 2001, and 2000


(3)    Investments in Common Stock

       The net unrealized appreciation (depreciation) in fair value of
       investments in Common Stock as of December 31, 2001, 2000 and 1999 and
       the change in such amount during the years were as follows:

<TABLE>
<CAPTION>
                                                                                                      Net
                                                                                                   unrealized
                                                               Fair                               appreciation
                                                               value              Cost           (depreciation)
                                                         ------------------ -----------------  -------------------
<S>                                                      <C>                <C>                <C>
Balance, January 1, 1999                                 $       2,967,244         1,860,570            1,106,674
Change for the year ended December 31, 1999                        703,111         1,248,508             (545,397)
                                                         ------------------ -----------------  -------------------
Balance, December 31, 1999                                       3,670,355         3,109,078              561,277
Change for the year ended December 31, 2000                      7,969,511           708,019            7,261,492
                                                         ------------------ -----------------  -------------------
Balance, December 31, 2000                                      11,639,866         3,817,097            7,822,769
Change for the year ended December 31, 2001                          6,453         1,209,595           (1,203,142)
                                                         ------------------ -----------------  -------------------
Balance, December 31, 2001                               $      11,646,319         5,026,692            6,619,627
                                                         ================== =================  ===================
</TABLE>


       The Plan held 167,694 and 149,588 shares of Common Stock on December 31,
       2001 and 2000, respectively. In addition, 7,882 shares were pending
       purchase on December 31, 2001.

(4)    Tax Status

       The Plan is intended to qualify under the provisions of Code Section 423.
       Under these provisions, Participants are taxed on amounts withheld for
       the purchase of Common Stock when such amounts are actually withheld.
       Other than this tax, no income is taxable to a Participant until
       disposition of the Common Stock acquired. The method of taxation, as
       ordinary income or as capital gains, will depend upon the holding period
       of the purchased shares.

       There are no federal income tax consequences to the Company by reason of
       the grant or exercise of rights under the Plan. The Company is generally
       entitled to a deduction to the extent the amounts are taxed as ordinary
       income to a Participant.

(5)    Plan Termination

       Although it has not expressed any intent to do so, the Company has the
       right under the Plan to terminate the Plan. In the event of a plan
       termination, Participants will be refunded the amounts of any employee
       contributions, which have not yet been applied to the purchase of Common
       Stock and the Common Stock shares in their individual participant
       accounts.

                                       6