A.M. Best Affirms the Ratings of Gateway Rivers Insurance Company

Fri Feb 15, 2013 9:00am EST

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OLDWICK, N.J.--(Business Wire)--
A.M. Best Co. has affirmed the financial strength rating of A-(Excellent) and
issuer credit rating of "a-" of Gateway Rivers Insurance Company (Gateway)
(Burlington, VT). The outlook to both ratings is stable. 

The ratings and outlook reflect Gateway's strong capitalization and conservative
operating strategy. The ratings also consider the company's critical role and
favorable profile as part of the AT&T Inc. [NYSE: T] organization, as well as
its excellent operating performance during the past five years, providing
insurance coverage to subsidiaries of AT&T Inc. for certain property/casualty
risks. 

Partially offsetting these positive rating factors are Gateway's relatively
large limits to its general and product liabilities as well as property lines of
business. Nevertheless, A.M. Best recognizes the substantial financial resources
of the AT&T Inc. organization. 

A.M. Best views Gateway's management and corporate strategy as a major factor
that strengthens its ratings, given the company`s conservative underwriting,
operational goals and transparency. A.M. Best also views Gateway's enterprise
risk management practices as strong given their impact on the company`s
conservative risk culture, defined risk controls as well as providing
optimization of its capital and surplus. Other factors A.M. Best considered in
the rating process include, but are not limited to, the diversification in
Gateway`s line of business and geography, as well as the support and commitment
of the parent and the captive's mission. 

A.M. Best expects Gateway's future operating performance to be stable but
strong, and the stable earnings profile should further support the efforts to
control its growth and business writings, which are consistent with its capital
and surplus position. 

Gateway`s ratings and outlook are not expected to be upgraded and/or revised
within the next 12-24 months as its operating performance and capital position
already have been considered in the ratings process. A.M. Best could downgrade
Gateway`s ratings and/or revise the outlook if its Best's Capital Adequacy Ratio
(BCAR) score declines, operating performance and risk profile deteriorate,
insured losses deplete capital or significant changes and turnover occur in its
management team and/or risk management controls and tolerances, or its parent's
ratings deteriorate. 

A.M. Best remains the leading rating agency of alternative risk transfer
entities, with more than 200 such vehicles rated in the United States and
throughout the world. 

For current Best`s Credit Ratings and independent data on the captive and
alternative insurance market, please visit www.ambest.com/captive. 

The methodology used in determining these ratings is Best`s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best`s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilized include: "Risk Management and the Rating Process
for Insurance Companies"; "Understanding BCAR for Property/Casualty Insurers";
"The Treatment of Terrorism Risk in the Rating Evaluation"; "Evaluating
Non-Insurance Ultimate Parents"; and "Alternative Risk Transfer (ART)." Best`s
Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. 

Founded in 1899, A.M. Best Company is the world`s oldest and most authoritative
insurance rating and information source. For more information, visit
www.ambest.com. 

Copyright © 2013 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Fred Eslami, 908-439-2200, ext. 5406
Senior Financial Analyst
fred.eslami@ambest.com
or
Steven Chirico, CPA, 908-439-2200, ext. 5087
Assistant Vice President
steven.chirico@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

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