Note first that the battery health only reports full percent changes, so it will go to 99% when the maximum capacity has dropped to 99.4%. So 99% does not mean that it has lost 1%, only that it has lost more than 0.5%.
Batteries are consumables; they lose a little capacity every time they are discharged, then recharged. On average this works out to about a 1% loss for every 25 “full charge cycles”. As one example, if you charge the phone overnight, every night (and that is what you should do; it is a best practice), it starts the day at 100%. If it drops to 20% by the end of the day before you charge it again overnight that counts as 0.8 full charge cycles (20% to 100%), or about 24 full charge cycles per month of use. For this example your battery capacity will lose about 1% per month. Of course, if the end-of-day level is higher than 20% the capacity loss will be a little less, and if it is lower than 20%, or you charge it during the day, the capacity loss will be higher.
The other thing to keep in mind that a battery is a chemical device, and chemistry is generally pretty variable and uncertain, as well as being analog, not digital. Apple designs the battery capacity to remain above 80% for 500 full charge cycles, but that is a minimum requirement; there is no published maximum expected capacity. So sometimes batteries will perform much better than that minimum specification. If yours doesn't that does not mean that your battery is defective, only that it is not better than the minimum requirement.
