Strong, well-entrenched competitive position in western and central Pennsylvania Very strong liquidity and balance-sheet characteristics based on key credit metrics Historically strong operating performance Successful diversification into specialty products such as dental insurance, vision care, and stop-loss insurance Geographic concentration in a market with limited organic growth opportunities Expected further earnings weakness in 2013 Unprofitability of Direct Pay operating unit Slightly unfavorable regulatory environment Status as insurer of last resort in western and central Pennsylvania The financial strength rating on Highmark Inc. (d/b/a Highmark Blue Cross Blue Shield and Highmark Blue Shield) is based on the company's strong competitive position in its core markets, very strong balance sheet characteristics, very strong liquidity, historically strong operating performance, and good business and
