Safeco Insurance, a member of Liberty Mutual Group, is a national U.S. insurance company. It holds naming rights to the Seattle Mariners' baseball stadium, Safeco Field.
Safeco was founded in Seattle, Washington in 1923 by Hawthorne K. Dent as the General Insurance Company of America, a property and casualty insurer. This name is still used by Safeco on some of its insurance products.[1] Thirty years later the company founded the Selective Auto and Fire Ensurance Company of America, or SAFECO (i.e., S.A.F.E. Co.).
General Insurance's first headquarters were in downtown Seattle at the corner of University Street and Fourth Avenue. In 1936, it moved to the eight-story Brooklyn Building at the corner of N.E. 45th Street and Brooklyn Avenue N.E. in the University District.
General Insurance began to sell life insurance in 1957. Eleven years later the corporate name changed from the General Insurance Company of America to Safeco Corporation. (The company would end up changing the capitalization of its name from SAFECO to Safeco at the turn of the century.) Around the same time the company began to offer mutual funds and commercial credit (though precursors to the Safeco Funds had been around since the 1930s).
Safeco replaced the Brooklyn Building with the 22-story Safeco Plaza building in 1973. It remains the tallest building in the city outside Downtown.
In 1997, Safeco bought American States Financial Corporation to expand beyond the West Coast. Washington Mutual's WM Life Insurance Company was purchased the same year. Two years later Safeco bought R.F. Bailey (Underwriting Agencies) Limited of London.
In 2001, new management was brought in to restructure the company. Commercial credit operations were sold to General Electric in 2001, and on March 15, 2004, the company announced the sale of its most profitable division, the life insurance and investments business, to a group of private investors led by Safeco board members and Warren Buffett's Berkshire Hathaway Inc. and White Mountains Insurance Group, Ltd., incorporating as Symetra Financial Corporation. The same day, it was announced that Hub International Ltd. was buying Safeco's insurance brokerage operations. Less than a month later, on April 12, it was announced that Mellon Financial Corporation would buy Safeco Trust Company, whose business is providing financial and estate planning services to individuals with over $1 million in assets. On August 2, the closure of Safeco Asset Management, the mutual-fund business, was announced.
SAFECO Corporation is one of the largest diversified financial corporations in the United States. Originally a property and-casualty insurance company, it also is engaged in health and life insurance, real estate management and development, surety, commercial credit, and investment management. An industry innovator, SAFECO was a stock company that offered participating policies, a concept so new that it required legal battles for the right to be sold. Another innovation was the blanket policy, which combined coverages and later became a standard product. Diversification into real estate and financial services came in the late 1960s. SAFECO's variety of conservative risk policies maintained the company through the recession-plagued 1970s and the natural disasters of the 1980s.
SAFECO dates to the founding of the General Insurance Company of America in 1923. This Seattle, Washington-based company was the project of Hawthorne K. Dent, who was a vice president of Northwestern Mutual Fire Insurance Company when he resigned to launch his own company. During the 1920s, eastern stock companies dominated the insurance industry, though smaller mutual companies had begun to be a presence. Mutual insurance companies were owned and organized by their policyholders, who shared the dividends when the company earned a profit. If the company had insufficient surplus to meet its claims and expenses, the policyholders were assessed to make up the deficit. Most mutuals in the early 1920s were these "assessable mutuals," and they avoided high-risk business. Competition between the two varieties was sometimes fierce, as agents tried to choose between the lower prices of the mutual policies and the established strength of the larger stock companies. Dent's own father had been beaten in such a brawl while a salesman for Northwestern in its early days.
General borrowed ideas from both the mutual and the stock companies; it combined policyholder dividends and careful risk selection with the financial strength of capital paid by stockholders to protect policyholders in case of loss. Dent's plan was for policyholders to benefit from the mutual system's cost-saving devices without the assessment liability. Soliciting $2 million from the community's business leaders to back his vision, Dent's new enterprise was underway in April 1923.
As a stock insurance company committed to giving consumers a low-cost product and financial indemnity, General made an early practice of caution and conservation. This extended to such rules as turning off lights, not accepting collect calls, and watching paper clips.
In General's early days, fire insurance was the principal basis of insurance companies. When the number of automobiles more than doubled between 1919 and 1929, however, auto insurance gained prominence. General's immediate challenge was to woo independent agents away from the closed distribution system created by the established industry giants. One way to do this was by offering new, innovative products. General was the first capital stock company to issue a participating fire insurance policy. Participating policies paid dividends to policyholders at the policy's expiration. Dent also created the American Insurance Agency, a wholly owned subsidiary, as another draw for agents. The agency trained young hirees to sell insurance in Seattle. These direct agents competed with independent agents.
In its first five years, General's annual premium volume increased from less than $500,000 to $6.5 million, in 1928. When automobiles flourished, General formed the General Casualty Corporation, in 1925, to write liability insurance for that industry. In 1928 First National Insurance Company was formed to sell higher-cost policies. That same year, General paid its first stockholder dividends. The company had been formed with a policy of paying no dividends for a five-year period in order to build a surplus.
AAt Safeco Insurance, our independent agents help you plan for whatever life may bring – a new house or car, or bigger family. They’re also there for you when the unexpected happens, like a fender-bender or a tree crashing through the roof. With Safeco, you get high-quality coverage, sensible advice and a helping hand.
When it comes to protecting what matters most, trust matters. From the smallest fender-bender to a storm-damaged home, Safeco has stood ready at the most trying moments for more than 85 years. A member of Liberty Mutual Group with the financial strength to deliver security and value, we offer national reach combined with local market knowledge. We have over 3,000 employees across the country dedicated to meeting the needs of people like you.
On April 6, 2005, CEO Mike McGavick announced that Safeco would be consolidating operations at either the University District "home office" campus or the newer Eastside campus in Redmond, pending a competition between Microsoft and the University of Washington for the sale of one or the other location. On January 19, 2006 it was announced that Microsoft would purchase the Redmond campus for $209.5 million. Plans were announced for a new 125-foot office tower across the street from Safeco Plaza to house the approximately 1,300 Redmond employees. However, McGavick subsequently stepped down as CEO to run for the U.S. Senate. In a surprise move, his replacement Paula Rosput Reynolds announced on August 30, 2006], that the entire University District complex would be sold as well, to the University of Washington for $130 million. Employees were told they would be moved to leased space in downtown Seattle. Some speculate this signalled the imminent sale of the company, although Safeco denied this. Safeco moved back downtown in 2007; its new headquarters at 1001 Fourth Avenue became the new Safeco Plaza, and the old Safeco Plaza was renamed UW Tower.
On June 27, 2007, Safeco introduced a new service, Teensurance, aimed at "providing parents peace of mind while teens earn their freedom." The product put GPS units in cars driven by children of insureds, allowing parents to monitor location, speed, distance and driving habits, remotely lock or unlock doors, and provide 24/7 roadside assistance.
On April 23, 2008, Safeco announced an agreement to be acquired by Liberty Mutual for $68.25 per share. Safeco continues to offer personal lines insurance (including auto, home, motorcycle, recreational vehicle, watercraft and more) through independent agents
On February 12, 2010, Safeco announced its donation of more than 800 pieces of its Safeco Art Collection to the Washington Art Consortium This move was hailed as being a significant and rare gift by members of the local arts community.
General had accumulated enough capital by the 1960s to diversify further. Winmar Company, a Seattle-based real estate development and management firm, was purchased in 1967 in order to invest in commercial real estate ventures. In 1968 General Insurance Company of America became SAFECO Corporation. Also that year, SAFECARE Company was formed to design and build convalescent centers and hospitals; it has since become a subsidiary of Winmar. SAFECO Credit Company was formed in 1969 to provide short- and medium-term business financing.
When Willis Campbell had become president of General in 1952, it was a property and casualty insurance company with revenues of more than $77 million. Campbell became chairman of SAFECO 1966, with Gordon Sweany assuming the presidency. By 1966 the company had grown into a diversified financial services institution with revenues of more than $227 million.
The 1970s were an uncertain time for securities values and money management, but SAFECO continued to grow. In 1977 Sweany became chairman of the board while R.M. Trafton took over as president. Both had law degrees and had worked with the company for a cumulative 68 years. Between 1960 and 1980, the company showed an underwriting profit every year except for two. In 1979 SAFECO was the 27th-largest U.S. property and casualty underwriter.
Per-share earnings for the company more than doubled between 1976 and 1980. At the same time, other major property and casualty companies were suffering a decline, largely as a result of the widening gap between inflationary costs and state-regulated restrictions of rate increases. SAFECO profited when others did not because the company did not slash premium costs with the strategy of making up the difference in investment income. The company pulled out of New York and New Jersey when rate commissioners in both states restricted premiums. Pulling out of New York cost SAFECO about 10% of its total premium volume, but the move was reported to increase profitability.
Hurricane Frederic cost SAFECO $5 million in property losses in 1979, but the company still showed a strong profit for the year. In addition to the loss of premium income from the New York and New Jersey business, SAFECO had high cash outlays in 1980, including a $25 million payment to the Internal Revenue Service following a tax audit. At this time, the company's biggest premium category was personal automobile, which outperformed the industry because of SAFECO's conservative risk selection and its concentration in less populated areas. Automobile lines and homeowners insurance line began suffering substantial underwriting losses in the early 1980s, however, as home fires and thefts increased and the cost and frequency of auto claims shot up. Despite record gains in its life and health insurance operations, SAFECO reported a first quarter loss of $41 million in 1985.
Battling with the volatile stock market, increased medical costs, stiff price competition, and fluctuating inflation and interest rates left SAFECO in a weakened position by 1988, when the company was suddenly hit with California's Proposition 103. This proposition cut state property and casualty rates by 20%. The company suffered losses of $5.3 million as a result of Hurricane Hugo's record damages on the southeastern U.S. coast and $4.6 million for the California earthquake's damages. SAFECO, nonetheless, managed a strong return by 1989 year end with the help of healthy investment performance and sharply increased life profits. Despite considerable underwriting losses, property and casualty operations still provided 66% of SAFECO's 1989 pretax earnings.
Early in 1990 insurance regulators in Pennsylvania moved to block SAFECO's decision not to renew its 8,000 auto insurance policies in that state. The nonrenewal decision followed premium rollback legislation passed in February. The 1990s decade thus began with further struggles between the industry and its regulators.
Principal Subsidiaries: First National Insurance of America; General America Corp.; General Insurance Company of America; PNMR Securities, Inc.; SAFECO Administrative Services, Inc.; SAFECO Life Insurance Company; SAFECO National Insurance Company; SAFECO Properties, Inc.; SAFECO Services Corporation; SAFECO Credit Company, Inc.; SAFECO Insurance Company of America; SAFECO Insurance Company of Illinois; SAFECO Asset Management Company; SAFECO Assigned Benefits Services Company; SAFECO Securities, Inc.; Agena, Inc. (20%).
Statistics:
Public Company
Incorporated: 1923 as General Insurance Company of America
Employees: 8,600
Assets: $10.12 billion
Stock Index: NASDAQ
Address:
SAFECO Plaza
Seattle
Washington
98185
United States
Safeco was founded in Seattle, Washington in 1923 by Hawthorne K. Dent as the General Insurance Company of America, a property and casualty insurer. This name is still used by Safeco on some of its insurance products.[1] Thirty years later the company founded the Selective Auto and Fire Ensurance Company of America, or SAFECO (i.e., S.A.F.E. Co.).
General Insurance's first headquarters were in downtown Seattle at the corner of University Street and Fourth Avenue. In 1936, it moved to the eight-story Brooklyn Building at the corner of N.E. 45th Street and Brooklyn Avenue N.E. in the University District.
General Insurance began to sell life insurance in 1957. Eleven years later the corporate name changed from the General Insurance Company of America to Safeco Corporation. (The company would end up changing the capitalization of its name from SAFECO to Safeco at the turn of the century.) Around the same time the company began to offer mutual funds and commercial credit (though precursors to the Safeco Funds had been around since the 1930s).
Safeco replaced the Brooklyn Building with the 22-story Safeco Plaza building in 1973. It remains the tallest building in the city outside Downtown.
In 1997, Safeco bought American States Financial Corporation to expand beyond the West Coast. Washington Mutual's WM Life Insurance Company was purchased the same year. Two years later Safeco bought R.F. Bailey (Underwriting Agencies) Limited of London.
In 2001, new management was brought in to restructure the company. Commercial credit operations were sold to General Electric in 2001, and on March 15, 2004, the company announced the sale of its most profitable division, the life insurance and investments business, to a group of private investors led by Safeco board members and Warren Buffett's Berkshire Hathaway Inc. and White Mountains Insurance Group, Ltd., incorporating as Symetra Financial Corporation. The same day, it was announced that Hub International Ltd. was buying Safeco's insurance brokerage operations. Less than a month later, on April 12, it was announced that Mellon Financial Corporation would buy Safeco Trust Company, whose business is providing financial and estate planning services to individuals with over $1 million in assets. On August 2, the closure of Safeco Asset Management, the mutual-fund business, was announced.
SAFECO Corporation is one of the largest diversified financial corporations in the United States. Originally a property and-casualty insurance company, it also is engaged in health and life insurance, real estate management and development, surety, commercial credit, and investment management. An industry innovator, SAFECO was a stock company that offered participating policies, a concept so new that it required legal battles for the right to be sold. Another innovation was the blanket policy, which combined coverages and later became a standard product. Diversification into real estate and financial services came in the late 1960s. SAFECO's variety of conservative risk policies maintained the company through the recession-plagued 1970s and the natural disasters of the 1980s.
SAFECO dates to the founding of the General Insurance Company of America in 1923. This Seattle, Washington-based company was the project of Hawthorne K. Dent, who was a vice president of Northwestern Mutual Fire Insurance Company when he resigned to launch his own company. During the 1920s, eastern stock companies dominated the insurance industry, though smaller mutual companies had begun to be a presence. Mutual insurance companies were owned and organized by their policyholders, who shared the dividends when the company earned a profit. If the company had insufficient surplus to meet its claims and expenses, the policyholders were assessed to make up the deficit. Most mutuals in the early 1920s were these "assessable mutuals," and they avoided high-risk business. Competition between the two varieties was sometimes fierce, as agents tried to choose between the lower prices of the mutual policies and the established strength of the larger stock companies. Dent's own father had been beaten in such a brawl while a salesman for Northwestern in its early days.
General borrowed ideas from both the mutual and the stock companies; it combined policyholder dividends and careful risk selection with the financial strength of capital paid by stockholders to protect policyholders in case of loss. Dent's plan was for policyholders to benefit from the mutual system's cost-saving devices without the assessment liability. Soliciting $2 million from the community's business leaders to back his vision, Dent's new enterprise was underway in April 1923.
As a stock insurance company committed to giving consumers a low-cost product and financial indemnity, General made an early practice of caution and conservation. This extended to such rules as turning off lights, not accepting collect calls, and watching paper clips.
In General's early days, fire insurance was the principal basis of insurance companies. When the number of automobiles more than doubled between 1919 and 1929, however, auto insurance gained prominence. General's immediate challenge was to woo independent agents away from the closed distribution system created by the established industry giants. One way to do this was by offering new, innovative products. General was the first capital stock company to issue a participating fire insurance policy. Participating policies paid dividends to policyholders at the policy's expiration. Dent also created the American Insurance Agency, a wholly owned subsidiary, as another draw for agents. The agency trained young hirees to sell insurance in Seattle. These direct agents competed with independent agents.
In its first five years, General's annual premium volume increased from less than $500,000 to $6.5 million, in 1928. When automobiles flourished, General formed the General Casualty Corporation, in 1925, to write liability insurance for that industry. In 1928 First National Insurance Company was formed to sell higher-cost policies. That same year, General paid its first stockholder dividends. The company had been formed with a policy of paying no dividends for a five-year period in order to build a surplus.
AAt Safeco Insurance, our independent agents help you plan for whatever life may bring – a new house or car, or bigger family. They’re also there for you when the unexpected happens, like a fender-bender or a tree crashing through the roof. With Safeco, you get high-quality coverage, sensible advice and a helping hand.
When it comes to protecting what matters most, trust matters. From the smallest fender-bender to a storm-damaged home, Safeco has stood ready at the most trying moments for more than 85 years. A member of Liberty Mutual Group with the financial strength to deliver security and value, we offer national reach combined with local market knowledge. We have over 3,000 employees across the country dedicated to meeting the needs of people like you.
On April 6, 2005, CEO Mike McGavick announced that Safeco would be consolidating operations at either the University District "home office" campus or the newer Eastside campus in Redmond, pending a competition between Microsoft and the University of Washington for the sale of one or the other location. On January 19, 2006 it was announced that Microsoft would purchase the Redmond campus for $209.5 million. Plans were announced for a new 125-foot office tower across the street from Safeco Plaza to house the approximately 1,300 Redmond employees. However, McGavick subsequently stepped down as CEO to run for the U.S. Senate. In a surprise move, his replacement Paula Rosput Reynolds announced on August 30, 2006], that the entire University District complex would be sold as well, to the University of Washington for $130 million. Employees were told they would be moved to leased space in downtown Seattle. Some speculate this signalled the imminent sale of the company, although Safeco denied this. Safeco moved back downtown in 2007; its new headquarters at 1001 Fourth Avenue became the new Safeco Plaza, and the old Safeco Plaza was renamed UW Tower.
On June 27, 2007, Safeco introduced a new service, Teensurance, aimed at "providing parents peace of mind while teens earn their freedom." The product put GPS units in cars driven by children of insureds, allowing parents to monitor location, speed, distance and driving habits, remotely lock or unlock doors, and provide 24/7 roadside assistance.
On April 23, 2008, Safeco announced an agreement to be acquired by Liberty Mutual for $68.25 per share. Safeco continues to offer personal lines insurance (including auto, home, motorcycle, recreational vehicle, watercraft and more) through independent agents
On February 12, 2010, Safeco announced its donation of more than 800 pieces of its Safeco Art Collection to the Washington Art Consortium This move was hailed as being a significant and rare gift by members of the local arts community.
General had accumulated enough capital by the 1960s to diversify further. Winmar Company, a Seattle-based real estate development and management firm, was purchased in 1967 in order to invest in commercial real estate ventures. In 1968 General Insurance Company of America became SAFECO Corporation. Also that year, SAFECARE Company was formed to design and build convalescent centers and hospitals; it has since become a subsidiary of Winmar. SAFECO Credit Company was formed in 1969 to provide short- and medium-term business financing.
When Willis Campbell had become president of General in 1952, it was a property and casualty insurance company with revenues of more than $77 million. Campbell became chairman of SAFECO 1966, with Gordon Sweany assuming the presidency. By 1966 the company had grown into a diversified financial services institution with revenues of more than $227 million.
The 1970s were an uncertain time for securities values and money management, but SAFECO continued to grow. In 1977 Sweany became chairman of the board while R.M. Trafton took over as president. Both had law degrees and had worked with the company for a cumulative 68 years. Between 1960 and 1980, the company showed an underwriting profit every year except for two. In 1979 SAFECO was the 27th-largest U.S. property and casualty underwriter.
Per-share earnings for the company more than doubled between 1976 and 1980. At the same time, other major property and casualty companies were suffering a decline, largely as a result of the widening gap between inflationary costs and state-regulated restrictions of rate increases. SAFECO profited when others did not because the company did not slash premium costs with the strategy of making up the difference in investment income. The company pulled out of New York and New Jersey when rate commissioners in both states restricted premiums. Pulling out of New York cost SAFECO about 10% of its total premium volume, but the move was reported to increase profitability.
Hurricane Frederic cost SAFECO $5 million in property losses in 1979, but the company still showed a strong profit for the year. In addition to the loss of premium income from the New York and New Jersey business, SAFECO had high cash outlays in 1980, including a $25 million payment to the Internal Revenue Service following a tax audit. At this time, the company's biggest premium category was personal automobile, which outperformed the industry because of SAFECO's conservative risk selection and its concentration in less populated areas. Automobile lines and homeowners insurance line began suffering substantial underwriting losses in the early 1980s, however, as home fires and thefts increased and the cost and frequency of auto claims shot up. Despite record gains in its life and health insurance operations, SAFECO reported a first quarter loss of $41 million in 1985.
Battling with the volatile stock market, increased medical costs, stiff price competition, and fluctuating inflation and interest rates left SAFECO in a weakened position by 1988, when the company was suddenly hit with California's Proposition 103. This proposition cut state property and casualty rates by 20%. The company suffered losses of $5.3 million as a result of Hurricane Hugo's record damages on the southeastern U.S. coast and $4.6 million for the California earthquake's damages. SAFECO, nonetheless, managed a strong return by 1989 year end with the help of healthy investment performance and sharply increased life profits. Despite considerable underwriting losses, property and casualty operations still provided 66% of SAFECO's 1989 pretax earnings.
Early in 1990 insurance regulators in Pennsylvania moved to block SAFECO's decision not to renew its 8,000 auto insurance policies in that state. The nonrenewal decision followed premium rollback legislation passed in February. The 1990s decade thus began with further struggles between the industry and its regulators.
Principal Subsidiaries: First National Insurance of America; General America Corp.; General Insurance Company of America; PNMR Securities, Inc.; SAFECO Administrative Services, Inc.; SAFECO Life Insurance Company; SAFECO National Insurance Company; SAFECO Properties, Inc.; SAFECO Services Corporation; SAFECO Credit Company, Inc.; SAFECO Insurance Company of America; SAFECO Insurance Company of Illinois; SAFECO Asset Management Company; SAFECO Assigned Benefits Services Company; SAFECO Securities, Inc.; Agena, Inc. (20%).
Statistics:
Public Company
Incorporated: 1923 as General Insurance Company of America
Employees: 8,600
Assets: $10.12 billion
Stock Index: NASDAQ
Address:
SAFECO Plaza
Seattle
Washington
98185
United States