In 1923, insurance executive Hawthorne K. Dent startled the established business community with a radical approach to insurance. Defying convention, he organized a company to combine the financial stability and responsibility of an investor-owned stock company with the preferred-risk underwriting and lower prices of a mutual or policy-owned company. He further violated the conventional wisdom of his day by basing the company in Seattle, far from the recognized insurance centers of the metropolitan Northeast.As the first U.S. insurance company organized along those lines, General Insurance Company of America Corporation, or “The General” as it was known, was immediately dismissed by most of the insurance industry as an impossible idea. But over the next several years, “The General” became known for its competitive prices and exemplary service.
In 1953, the company’s innovative spirit sent it in pursuit of an emerging technology that offered independent agents the tools to compete with the direct insurance writers — computer-based automation. That quest produced the Selective Auto and Fire Insurance Company of America. The name Safeco was derived from the company’s acronym.
The company entered the life insurance business in 1957. In 1968, the board of directors recognized Safeco’s rapid growth and success by changing the parent corporation’s name from General America Corporation to Safeco Corporation. Also in the late 1960s, Safeco further diversified its financial services by introducing mutual funds and a commercial credit company.
Always highly successful on the West Coast, Safeco took a major step in geographic and product diversification in 1997 with its acquisition of American States Financial Corporation. The combination doubled Safeco’s independent agency distribution force, increased its presence east of the Rockies and, through its American States Business Insurance product line, the company became a leading writer of business insurance for small- to mid-sized businesses.
The company further increased its national presence in 1998, when it purchased the naming rights to the Seattle Mariner’s ballpark.
After a period of declining earnings starting in the late 1990s, Safeco turned around its fortunes under the leadership of Chairman and CEO Mike McGavick. The company rebounded from a loss of nearly $1 billion in 2001 to profits of more than $300 million in 2002.
The company continues to grow profitably and posted its best-ever net income result of $562 million in 2004. Also in 2004, Safeco completed the sale of its life and investments operations, shifting the company’s full attention to property and casualty insurance.
Today, Safeco is focused on what it does best — serving the insurance needs of drivers, home owners and owners of small- and mid-sized businesses.