SAFECO CORPORATION COMPLETES ACQUISITION OF 
                         AMERICAN STATES FINANCIAL CORPORATION


     SEATTLE -- (October 1, 1997) -- SAFECO Corporation (NASDAQ: SAFC) announced
today that it has completed the acquisition of American States Financial 
Corporation for $47 per share, or $2.8 billion.

     "We are very excited to finalize this acquisition and begin the next 
stage of combining the two companies," said Roger Eigsti, chairman and chief 
executive officer of SAFECO. "Together, SAFECO and American States can 
provide independent agents with a broad and comprehensive package of products 
and services that meet our customers' diverse insurance and investment needs."

     Founded in 1923 as the General Insurance Company of America, SAFECO 
today is one of the largest diversified financial corporations in the country 
with more than $27 billion in combined assets as of June 30, 1997, and 
combined 1996 revenues of $6 billion. Property and casualty insurance was 
SAFECO's original business and remains its largest operation. With the 
acquisition of American States, SAFECO ranks as the 15th largest property and 
casualty insurer in the country.

     In addition, SAFECO engages in life and health insurance and surety, and 
conducts commercial credit, asset management, insurance agency and financial 
services distribution operations, and real estate investment and management.

     SAFECO is headquartered in Seattle, with major operations in Washington, 
Indiana, Missouri, Oregon, Texas, California, Colorado, Ohio, Illinois, 
Georgia, Kansas, New Mexico, Wisconsin and Connecticut. The corporation 
employs more than 11,000 people and is represented by more than 8,000 
independent agents nationwide.