Letter • Letter From Our Chairman and Our Chief Executive Officer

Welcome to Highmark Health's 2015 Annual Report

2015 was a year of significant challenges in the health care industry and served as a launching pad for Highmark Health, as it brought transition that required the company to come together in unprecedented fashion to navigate difficult market dynamics. This resulted in a strategic plan that uniquely positions the organization to invent a new health care model that can deliver differentiated value to our customers across their full spectrum of needs.

We are pleased with our strong, consistent year-over-year financial performance, despite the impact of the Affordable Care Act population, and we continued to invest in our core and growing businesses, with nearly $500 million in investments in 2015 to improve health care quality and access for our health plans' members and other health plan members on our platform. The adverse performance in the government health insurance business was offset by strong financial performance and retention in the commercial health insurance market and near record earnings in the vision and health risk solutions businesses, as well as continued volume growth at Allegheny Health Network that helped the provider system achieve a second consecutive year of progress in its financial turnaround.

We are beginning to see the positive results of the investments we've made in Allegheny Health Network to deliver the highest clinical quality and patient service, while ensuring that it is positioned to meet the future needs of our patients and the community. We are particularly proud of Allegheny Health Network's recognition by Comparion of its top-rated Pittsburgh-area cardiac care, women's care, spinal surgery and trauma care; its national leadership in organ transplant programs; and as the leading heart transplant program in Pennsylvania based on measures of medical excellence.

Highmark Health continues to have a strong financial position, with $6.3 billion in cash and investments and net assets of $5.2 billion, and has distinctive attributes in place that we are leveraging to ensure our continued success and growth. We are focused on the future and preparing for the fundamental changes we see in the health care marketplace: the end of the consent decrees in 2019, market consolidation, and the potential vertical integration of the industry. We have a solid strategic plan in place and are successfully executing on a new path to the future that will work within and outside our core markets, based on several key factors unique to Highmark Health — our scale, our portfolio, our stability and our openness to partners.

We invite you to learn about our achievements of the past year featured in this report and keep an eye on us in 2016 as we focus on the future and shape the change that is required to transform health care.

Thank you.