To Our Shareholders,
Customers and Communities:

Simplify. Stabilize. Unify. When reflecting on my first 10 months as CEO of WellPoint, these three words represent both my initial ambitions as well as the foundation of our company’s most meaningful achievements. 2013 was a year of challenges for WellPoint, our industry, and the U.S. health care system as a whole. But through changes in leadership, the integration of two distinct yet successful organizations, and the complexity of the greatest market transformation in the history of American health care, WellPoint’s 48,000 associates truly performed. I am proud of what we accomplished together and of the positive impact we make on the lives and health of the millions of people we serve. I hope you share in that pride and in our optimism for the future.

Simplify. Operationally, we simplified our structure and reinforced accountability by aligning around two divisions: the Commercial and Specialty Business Division and the Government Business Division. By doing so, we gave our leadership the decision-making authority to successfully run their businesses and more nimbly react to the evolving market dynamics. We refocused on our core business by stopping initiatives that were inconsistent with our priorities, such as the divestiture of 1-800 CONTACTS, and by developing operating strategies for the future, including a three-year roadmap to enhance our IT infrastructure and capabilities. We also completed the integration of Amerigroup, exceeding our accretion targets, adding bench strength and programmatic knowledge to our leadership base, and giving us the largest Medicaid footprint in the industry with nearly 4.5 million members served across 19 states.

Stabilize. Our simplification efforts led directly to the desired stabilization effect, resulting in four straight quarters of strong performance that exceeded our expectations. Financially, we built on our positive momentum by growing adjusted EPS by nearly 13 percent to $8.52 and increasing operating revenue by 16 percent to $70.2 billion—both historical highs for WellPoint. We also grew membership, ending the year with 35.7 million medical members, well ahead of our 2013 plan. Most importantly, we secured several marquee wins in both our Commercial and Medicaid business lines that will drive membership growth of more than one million members throughout 2014 and position us for continued growth in 2015 and beyond.

Unify. One of my earliest priorities as CEO was to visit our offices across the country and speak with associates about the state of WellPoint’s culture. With considerable input from every geography, level, and division in the company, we undertook an enterprise-wide effort to better define who we are, who we aspire to be, and how we deliver value to our customers and our shareholders. We are now unified under a single purpose: “Together, we are transforming health care with trusted and caring solutions,” and grounded by five foundational values: “Accountable, Caring, Easy to do business with, Innovative, and Trustworthy.” Though work remains in making these concepts a reality in all we do, the final product is a powerful set of principles that will fuel momentum and serve as a foundation for continued growth.

What stands out among these accomplishments is that they were achieved while making unprecedented investments in our company and in our future. Most notably, we launched more than 1,000 new products across 14 states in support of the new health insurance Exchange marketplaces. While still early, I remain cautiously optimistic, encouraged by the high volume of applications and the initial indicators that support both our risk pool predictions and the strength of our brand. We also invested heavily in our provider collaboration strategy, accelerating our efforts to dramatically change the way we interact and partner with the delivery system. By deploying capabilities that enable a bi-directional exchange of information and sharing in the risk, responsibility, and reward for managing population health, our innovative provider relationships are revolutionizing the quality and value of care delivered to our members.

2013 was an exceptional year for WellPoint, our customers, and our investors. There is always room for improvement, but the strengths embedded in this company—our national presence, deep relationships with providers and caregivers, brand awareness, and a strong balance sheet—fortify our ability to succeed no matter what the future brings. Our 2013 performance can be directly attributed to our associates, whose commitment and dedication to our customers continues to inspire me each and every day. As I look to 2014 and beyond, I am increasingly confident that our new WellPoint is strongly positioned to capitalize on the opportunities ahead and more capable than ever to fulfill our vision, “to be America’s valued health partner.”

Sincerely,

Joseph R. Swedish
CEO, WellPoint, Inc.