UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
05/17/01
Date of Report (Date of earliest event reported)
SAFECO CORPORATION
(Exact name of registrant as specified in Charter)
WASHINGTON 1-6563 91-00742146
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
SAFECO Plaza, Seattle, Washington 98185
(Address of principal executive officers) (Zip Code)
(206) 545-5000
(Registrant's telephone number, including area code)
Item 5. Other Events
SAFECO To Focus on Strength in Commercial Lines -
The Small-To-Medium Business Market
SEATTLE - (May 17, 2001) - SAFECO (NASDAQ:SAFC) today announced plans to
consolidate its commercial operations and focus on insurance for small-to-medium
sized businesses. The new SAFECO Business Insurance enterprise will be
headquartered in Seattle, with five underwriting operations located in Atlanta,
Dallas, Indianapolis, Seattle and Fountain Valley, Calif.
"We are going to do more of what we do best," said Mike McGavick, SAFECO
president and CEO. "SAFECO is a leader in the small-to-medium commercial
insurance segment, and we are intensifying our efforts to grow this profitable
market segment."
"The small-to-medium business market has tremendous growth and profit
potential," he stated. "SAFECO is positioning itself to capture an even greater
share of this market." The company has a number of ambitious initiatives to help
agents and brokers build this market, including streamlined underwriting,
Contact Centers for servicing, and real-time agent Internet processing for
producing new business.
Another key initiative is to create a centralized facility to underwrite larger
commercial accounts. "While this special facility will improve access to the
large commercial market for our most valuable agents and brokers - those who
sell SAFECO's core personal and small-to-medium commercial insurance products,"
said McGavick, "we expect our total large commercial volume to decrease as we
concentrate on the small-to-medium marketplace."
"We are targeting efficiency and expenses as well with this consolidation,"
noted Dale Lauer, chief operating officer of the new SAFECO Business Insurance
enterprise. SAFECO's refocusing of its commercial operations will result in a
reduction of approximately 450 jobs as well as some job transfers.
"We recognize our strategic repositioning will disrupt or displace some of our
employees," said Lauer. "Although difficult, it is necessary to SAFECO's
performance improvement and growth in the small-to-medium commercial insurance
market."
As part of its overall strategy to focus on core business lines, the
company also is reviewing its SAFECO Select Markets operation, including its
specialty commercial lines of medical malpractice, professional liability,
specialty programs and surplus lines business.
SAFECO, in business since 1923, provides insurance and related financial
products to individuals and businesses, selling its products through more than
17,000 independent agents and financial advisors.
Forward-looking information is subject to risk and uncertainty
- ---------------------------------------------------------------
Statements made in this report that relate to anticipated financial performance,
business prospects and plans, regulatory developments and similar matters may be
considered "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Statements in this report that are not historical
information are forward-looking. Such statements are subject to certain risks
and uncertainties that may cause the operations, performance, development and
results of SAFECO's business to differ materially from those suggested by the
forward-looking statements. The risks and uncertainties include:
o SAFECO's ability to sell SAFECO Credit Company, Inc.;
o SAFECO's ability to obtain rate increases and non-renew underpriced
insurance accounts;
o Achievement of SAFECO's premium targets and profitability;
o Decrease in large-commercial premium volume;
o Achievement of SAFECO's expense reduction goals, including savings from
consolidation of commercial operations;
o Realization of growth and business retention estimates;
o Changes in the nature of the property and casualty book of business;
o Driving patterns;
o Changes in competition and pricing environments;
o Weather conditions, including the severity and frequency of storms,
hurricanes, snowfalls, hail and winter conditions;
o The occurrence of significant natural disasters, including earthquakes;
o The development of major Year 2000 related claims or liabilities;
o The adequacy of loss reserves;
o The availability and pricing of reinsurance;
o Court decisions and trends in litigation;
o Legislative and regulatory developments;
o Rating agency actions;
o Availability of bank credit facilities;
o Fluctuations in interest rates;
o Performance of financial markets; and
o General economic and market conditions.
In particular, because insurance rates in some jurisdictions are subject to
regulatory review and approval, SAFECO's achievement of rate increases may occur
in amounts and on a time schedule different than planned, which may affect the
Corporation's efforts to restore earnings in the property and casualty lines.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAFECO CORPORATION
Dated: May 17, 2001 By: /s/ H. Paul Lowber
------------------------------
H. Paul Lowber
Vice President, Controller and
Chief Accounting Officer