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
                                    6/16/2005
                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)


Check  the  appropriate  box  below  if  the  Form 8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation to the registrant under any of the
following provisions:


|_| Written communications pursuant to Rule 425 under the Securities
    Act (17 CFR 230.425)

|_| Soliciting material pursuant to Rule 14a-12 under the Exchange
    Act (17 CFR 240.14a-12)

|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))

|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))

Item 1.01  Entry Into a Material Definitive Agreement


On June 16, 2005,  Safeco  Corporation  entered into a share purchase  agreement
with James W. Ruddy,  who retired on that date after  thirty years of service to
Safeco, having served as its general counsel since 1989. Under the agreement, if
requested by Mr. Ruddy,  Safeco agrees to purchase shares of Safeco common stock
owned by Mr. Ruddy,  including shares he may obtain by exercising stock options.
The options may be  exercised  in a cashless  transaction  in which the exercise
price and taxes will be deducted from the proceeds. The per share purchase price
will be the  average  closing  share  price of  Safeco's  common  stock  for the
thirty-day period starting on June 16, 2005.

For all but certain  shares  issuable upon exercise of incentive  stock options,
Mr.  Ruddy has a three month  period from the date of the  agreement  to request
Safeco  purchase  such shares.  Mr.  Ruddy may request that Safeco  purchase the
shares  issuable on exercise of his incentive  stock options for a period of one
year  following the date of exercise.  The purchase  price for the shares issued
upon exercise of his incentive  stock options will be the closing share price on
the date of purchase.

Assuming that Mr. Ruddy exercises all of his 246,839  outstanding  stock options
for an average  exercise  price of $34.94 per share and that he also  tenders to
Safeco the 19,758 shares he currently owns,  Safeco's payment to Mr. Ruddy would
be  approximately  $4.3 million  (this amount is net an estimated  $10.5 million
used to pay the option  exercise  price and  withholding  taxes,  and  assumes a
purchase price of $55.24).


Item 9.01  Financial Statements and Exhibits

None.


                                    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 thereunto duly authorized.


                                          SAFECO CORPORATION
                                          -------------------------------------
                                          Registrant

    Dated:     June 22, 2005
                                          /s/ Stephanie Daley-Watson
                                          -------------------------------------
                                          Stephanie Daley-Watson
                                          Vice President and Secretary