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
08/01/02
Date of Report (Date of earliest event reported)
SAFECO CORPORATION
(Exact name of registrant as specified in Charter)
WASHINGTON 1-6563 91-0742146
(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 Completes Acquisition of Swiss Re's Excess-Loss Business
SEATTLE - (August 1, 2002)- SAFECO (Nasdaq: SAFC) late yesterday completed
acquisition of the medical excess-loss and group life insurance books of
business that Swiss Re acquired from Lincoln National Corp. in December 2001.
The acquisition nearly doubles the size of SAFECO's profitable business of
providing excess-loss insurance for employers with self-funded medical plans.
"We have an outstanding track record of integrating acquisitions and creating
profitability in the excess-loss business," said Randy Talbot, president of
SAFECO Life & Investments. "Our history of success, combined with this latest
acquisition, positions SAFECO as a strong industry leader."
SAFECO is one of the leading providers of excess-loss insurance, writing $284
million in premiums in 2001. The company's acquisition of these medical
excess-loss and group life insurance books of business originally was announced
on March 4.
SAFECO, in business since 1923, is a Fortune 500 company based in Seattle that
sells insurance and related financial products through more than 17,000
independent agents and financial advisors.
Swiss Re is one of the world's leading reinsurers with over 70 offices in more
than 30 countries. Gross premiums in 2001 amounted to CHF 28.5 billion (USD 16.9
billion). Swiss Re has a strong track record of earnings growth only interrupted
in 2001 with a net loss of CHF 165 million (USD 97.8 million), largely due to
the 11 September 2001 event. At the end of 2001, Swiss Re's shareholders' equity
amounted to CHF 22.6 billion (USD 13.6 billion) and the total balance sheet
stood at CHF 170 billion (USD 102.4 billion). Swiss Re is rated "AAA" by
Standard & Poor's, "Aaa" by Moody's and "A++" by A.M. Best.
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 are
"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. The operations, performance and development of
our business are subject to certain risks and uncertainties which may cause
actual results to differ materially from those contained in or suggested by the
forward-looking statements in this report. The risks and uncertainties include,
but are not limited to:
- -- the ability to obtain rate increases and decline or non-renew underpriced
insurance accounts;
- -- achievement of premium targets and profitability;
- -- realization of growth and business retention estimates;
- -- achievement of decrease in large-commercial premium volume;
- -- achievement of expense savings from consolidation of commercial operations;
- -- achievement of overall expense reduction goals;
- -- success in implementing a new business entry model for personal and
commercial lines;
- -- success in obtaining regulatory approval of price-tiered products and the
use of insurance scores;
- -- the ability to freely enter and exit lines of business;
- -- negative changes to SAFECO's ratings by rating agencies;
- -- the effect of current insurance and credit ratings levels on business
production;
- -- inflationary pressures on medical care costs, auto parts and repair,
construction costs and other economic sectors that increase the severity of
claims;
- -- availability of bank credit facilities;
- -- the profitability of the use of derivative securities by SAFECO Financial
Products;
- -- fluctuations in interest rates;
- -- performance of financial markets;
- -- a long-term period of low interest rates;
- -- general economic and market conditions;
- -- changes in the mix of SAFECO's property and casualty book of business;
- -- driving patterns;
- -- the competitive pricing environment, initiatives by competitors and other
changes in competition;
- -- weather conditions, including the severity and frequency of storms,
hurricanes, snowfalls, hail and winter conditions;
- -- the occurrence of significant natural disasters, including earthquakes;
- -- the occurrence of significant man-made disasters, such as the attack on
September 11, 2001;
- -- the occurrence of epidemics;
- -- the occurrence of bankruptcies that result in losses under surety bonds;
- -- the adequacy of loss reserves;
- -- the availability of, pricing of, and ability to collect reinsurance;
- -- the ability to manage exposure to the Lloyd's of London underwriting
market;
- -- the ability to exclude and to reinsure the risk of loss from terrorism;
- -- the success in integrating acquired businesses and operations;
- -- interpretation of insurance policy provisions by courts, court decisions
regarding coverage and theories of liability, trends in litigation and
changes in claims settlement practices;
- -- the outcome of any litigation against SAFECO;
- -- legislative and regulatory developments affecting the actions of insurers,
including requirements regarding rates and availability of coverage; and
- -- changes in tax laws and regulations that affect the favorable taxation of
certain life insurance products or that decrease the usefulness of life
insurance products for estate planning purposes.
Because insurance rates in some jurisdictions are subject to regulatory review
and approval, the achievement of rate increases may occur in amounts and on a
time schedule different than planned, which may affect the 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: August 1, 2002
By: /s/RICHARD M. LEVY
---------------------------
Richard M. Levy
Vice President, Controller
And Chief Accounting Officer