ITEM 1. BUSINESS
SAFECO Corporation (the Corporation, or SAFECO) is a Washington Corporation which directly or indirectly owns the stock of operating subsidiaries engaged in various segments of the insurance business and other operating subsidiaries engaged in other financially-related lines of business. The Corporation also manages the SAFECO family of mutual funds. The home offices of the Corporation and its principal subsidiaries are in Seattle, Washington and Redmond, Washington. The Corporation and its subsidiaries had 7,550 employees at December 31, 1994.
The insurance subsidiaries are engaged in two principal lines: property and casualty insurance, and life and health insurance. Both are subject to regulation and supervision in every jurisdiction in which they do business. The nature and extent of such regulation varies, but generally has its source in statutes which delegate regulatory, supervisory and administrative powers to state insurance commissioners. Such regulation, supervision and administration relate, among other things, to the standards of solvency which must be met and maintained; the licensing of insurers and their agents; the nature of limitation on investments; deposits of securities for the benefit of policyholders; approval of policy forms and premium rates; periodic examination of the affairs of insurance companies; annual and other reports required to be filed on the financial condition of insurers or for other purposes; the amount of dividends which may be distributed to a parent corporation; requirements regarding reserves for unearned premiums and losses and other matters. Regulation requires that property and casualty rates be adequate but not excessive nor unfairly discriminatory. See page 26 in the Annual Report to Stockholders, hereby incorporated by reference (Exhibit 13), for more information on certain regulatory matters. In 1988, California voters narrowly passed Proposition 103, an initiative which significantly affects the property and casualty insurance business in that state. See Note 6 on page 55 in the 1994 Annual Report to Stockholders for more details.
All areas of the insurance business are highly competitive due to the marketing structure and the large number of stock and mutual insurance companies and other entities competing. These factors prevent any one insurance company or group of insurers from dominating the market.
Property and Casualty Operations
Subsidiaries engaged in the property and casualty insurance business, which insure commercial, personal and surety lines, are SAFECO Insurance Company of America, General Insurance Company of America, First National Insurance Company of America, SAFECO National Insurance Company, SAFECO Insurance Company of Illinois, SAFECO Lloyds Insurance Company, SAFECO Surplus Lines Insurance Company, F. B. Beattie & Co., Inc., COMAV Managers, Inc., and Whitehall Insurance Brokers, Inc. Coverages include automobile, homeowners, fire and allied lines, commercial multi-peril, miscellaneous casualty, fidelity and workers' compensation. Their products are primarily sold through independent insurance agents in nearly all states and the District of Columbia. SAFECO sold its Canadian property and casualty operations in 1991. See page 29 in the 1994 Annual Report to Stockholders for more information.
- 1 - PART I
ITEM 1. BUSINESS (Continued)
The following table shows consolidated property and casualty gross premiums written for SAFECO's ten largest states (amounts in thousands):
Voluntary personal, commercial and surety lines (which excludes assigned risk, FAIR plans, etc.) comprise approximately 69%, 26% and 4%, respectively, of the 1994 gross premiums written. The gross premiums written growth of 6.7% in 1994 is comprised of a 6.6% increase for personal, and increases of 7.1% for commercial and 7.1% for surety lines. Gross premiums written growth of 10.2% in 1993 was comprised of a 10.4% increase for personal, and increases of 10.3% for commercial and 5.7% for surety lines.
The growth in personal lines premiums is the result of both rate increases and an increase in policies in force. The number of vehicles insured increased 1.3% in 1994, compared with increases of 2.2% in 1993 and 6.2% in 1992. This trend in the number of vehicles insured has been caused primarily by rate increases placed in effect in recent years. The number of homes insured increased 2.7% in 1994, 8.0% in 1993 and 10.8% in 1992. This trend in the growth rate is also due in part to rate increases placed in effect in recent years. SAFECO's commercial lines premiums increased in 1994 and 1993 as a result of both growth in policies in force and some rate increases. Continued growth in commercial premiums written is expected in 1995. The increase in surety premiums in 1994 is primarily due to new commercial and contract accounts acquired.
Additional financial information about SAFECO's business segments is set forth in Note 15 on page 62 of the 1994 Annual Report to Stockholders.
- 2 - PART I
ITEM 1. BUSINESS (Continued)
The consolidated financial statements include the estimated liability (reserves) for unpaid losses and loss adjustment expense of SAFECO's property and casualty insurance subsidiaries. The liability is presented net of amounts recoverable from salvage and subrogation recoveries and gross of amounts recoverable from reinsurance.
Reserves for losses that have been reported to SAFECO and certain legal expenses are established on a "case basis" method. Claims incurred but not reported (IBNR) and other adjustment expense are estimated using statistical procedures. Salvage and subrogation recoveries are accrued using the "case basis" method for large claims and statistical procedures for smaller claims.
These reserves aggregate SAFECO's best estimates of the total ultimate cost of claims that have been incurred but have not yet been paid. The estimates are based on past claims experience and consider current claims trends as well as social, legal and economic conditions, including inflation. The reserves are not discounted.
Loss and adjustment expense reserve development is reviewed on a regular basis to determine that the reserving assumptions and methods are appropriate. Reserves initially determined are compared to the amounts ultimately paid. A statistical estimate of the projected amounts necessary to settle outstanding claims is made regularly and compared to the recorded reserves.
The table on page 4 provides an analysis of changes in losses and adjustment expense reserves for 1994, 1993 and 1992 (net of reinsurance amounts). Changes in the reserves are reflected in the income statement for the year when the changes are made. Operations were credited $81.3 million, $96.9 million and $44.6 million in 1994, 1993, and 1992, respectively, as a result of a reduction in the estimated amounts needed to settle prior years' claims.
- 3 - PART I
ITEM 1. BUSINESS (Continued)
Analysis of Changes in Losses and Adjustment Expense Reserves - (Net of reinsurance amounts):
Reconciliation of Liability for Losses and Adjustment Expense Reserves (per property and casualty balance sheet):
The table on page 5 presents the development of the losses and ` adjustment expense reserves for 1984 through 1994. The top lines of the table show the estimated liability for unpaid losses and adjustment expense at December 31 for each of the indicated years, both gross and net of related reinsurance amounts. The upper portion of the table shows the cumulative amount paid with respect to the previously recorded liability as of the end of each succeeding year. The next section shows the re-estimated amount of the previously recorded liability based on experience as of each succeeding year. The estimate is increased or decreased as more information becomes known about individual claims and as changes in conditions and claim trends become apparent.
- 4 - PART 1 ITEM 1.BUSINESS (Continued)
- 5 - PART I
ITEM 1. BUSINESS (Continued)
The lower section of the table on Page 5 shows the cumulative redundancy (deficiency) developed with respect to the previously recorded liability as of the end of each succeeding year. For example, the 1984 reserve of $629.4 million developed a $52.1 million deficiency after one year which grew over ten years to a deficiency of $310.5 million. The reserve development deficiencies indicated for the years 1984 through 1987 were due to the emergence of liabilities for pollution, asbestos and other hazardous toxic claims and related legal expenses and adverse development from the automobile liability and workers' compensation lines due to significant medical inflation and trends in the civil justice system. In this same period, loss adjustment expenses were increasing rapidly, reflecting higher legal costs and increased litigation.
The table below presents the approximate amounts of adverse reserve development by major category for the calendar years 1984-1987 viewed as of December 31, 1994. Note that each year below stands on its own and the years should not be added together. For example, the amount of adverse development recorded in 1987 or subsequent for losses incurred in 1982, is included in the adverse development amounts for each year shown below.
As the trends noted above became apparent, SAFECO aggressively increased reserves to address these deficiencies.
For 1988 and subsequent years, SAFECO's reserve development has been favorable. This trend reflects the aggressive reserving undertaken in prior years to correct deficiencies which is no longer necessary, favorable legislation in the workers' compensation area, moderation of medical costs and inflation and claims department changes. The favorable legislation in the workers' compensation area, which relates primarily in the states of Oregon and California, has helped reduce fraud, allowed for final settlement of claims and made it more difficult to reopen claims -- all of which reduced SAFECO's ultimate loss costs. The cost of claim settlements in several lines of business has benefited from changes in the organization of SAFECO's claims department which has established separate specialized units for workers' compensation, environmental exposures and fraud investigation. In addition, increased focus on adjustment expenses has helped reduce these costs.
- 6 - PART I
ITEM 1. BUSINESS (Continued)
The impact of reinsurance on the development information presented on Page 5 is not significant. Reserve development gross of reinsurance for the previous three years is as follows (in thousands):
SAFECO'S objective is to set reserves which are adequate; that is, the amounts originally recorded as reserves should at least equal the amounts ultimately required to settle losses. Analysis indicates that SAFECO's reserves are adequate and probably slightly redundant at December 31, 1994, 1993 and 1992. Operations were credited $81.3 million, $96.9 million and $44.6 million in 1994, 1993 and 1992, respectively, as a result of a reduction in the estimated amounts needed to settle prior years' claims.
In evaluating the information contained in the reserve development table on page 5, and the table on page 6, it should be noted that each amount includes the effects of all changes in amounts for prior periods. For example, the amount of the redundancy shown for the December 31, 1993 reserves that relate to losses incurred in 1984 will be included in the cumulative redundancy or deficiency amount for the years 1984 through 1992. This table does not present accident or policy year development data, which some readers may be more accustomed to analyzing. Conditions and trends that have affected development of the liability in the past may not necessarily occur in the future. Accordingly, it may not be appropriate to extrapolate future redundancies or deficiencies based on this table.
SAFECO's property and casualty companies' reserves for losses and adjustment expense for liability coverages related to environmental, asbestos and other toxic claims totaled $108.2 million at December 31, 1994, compared with $113.4 million at December 31, 1993. These amounts are before the effect of reinsurance, which is insignificant. These reserves are approximately 5% of total property and casualty reserves for losses and adjustment expense at both December 31, 1994 and 1993. The reserves include estimates for both reported and IBNR losses and related legal expenses.
The vast majority of SAFECO's property and casualty insurance subsidiaries' environmental, asbestos and other toxic claims result from the general liability line of business. A few of these types of losses occur in other coverages such as umbrella and small commercial package policies. Approximately 1,100 of these claims were pending at December 31, 1994 computed on an occurrence basis. For the last three years, an average of 606 claims were opened and an average of 576 claims were closed each year. Most of SAFECO's pending environmental claims involve some type of environmental-related coverage dispute. The average settlement cost of each environmental, asbestos and other toxic claim for the last three years was $18,300 including legal expenses and $10,300 excluding legal expenses.
- 7 - PART I
ITEM 1. BUSINESS (Continued)
The components of these reserves at December 31, 1994 are as follows (in thousands):
The following table presents the loss reserve activity analysis for liability coverages related to environmental, asbestos and other toxic claims. (in thousands)*
* Amounts are before the effect of reinsurance, which is insignificant.
In view of the changes in environmental regulations and legal decisions which affect the development of loss reserves, the process to estimate loss reserves for environmental, asbestos and other toxic claims results in imprecise estimates. Quantitative techniques have to be supplemented by subjective considerations and managerial judgment. In view of these conditions, trends that have affected development of these liabilities in the past may not necessarily occur in the future. The reserves carried for these claims at December 31, 1994 are estimates based on the known facts and current law and are believed to be adequate. SAFECO has generally avoided writing coverages for larger companies with substantial exposure in these areas.
The property and casualty insurance subsidiaries are required to file annual statements with state regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). The difference between the liability at December 31, 1994 for losses and adjustment expense reported in the consolidated financial statements in accordance with generally accepted accounting principles (GAAP) of $2,236,804,000 and $2,092,946,000 reported in the annual statement filed with state regulatory authorities relates to reinsurance recoverables. Under FASB Statement 113 the GAAP-basis liability for losses and adjustment expense is reported gross of amounts recoverable from reinsurance. Statutory-basis financial statements show the liability net of reinsurance.
- 8 - PART I
ITEM 1. BUSINESS (Continued)
SAFECO's property and casualty subsidiaries protect themselves from excessive losses by reinsuring on treaty and facultative bases. Reinsurance recoverables relating to unpaid losses and adjustment expense were $143.9 million at December 31, 1994 and $100.1 million at December 31, 1993. This increase is due to amounts recoverable by SAFECO from its reinsurers related to the Los Angeles earthquake. Reinsurance costs for catastrophe coverages have increased in the last few years and are expected to remain higher in the foreseeable future, given the large amount of catastrophe losses in recent years. SAFECO's catastrophe property reinsurance program for 1995 covers 90% of $282 million of single event losses in excess of a $75 million retention. In the event of a substantial catastrophe, SAFECO would, therefore, retain the first $75 million of losses, 10% of the next $282 million and all losses in excess of $357 million. The 1995 catastrophe property reinsurance contract includes a provision for one reinstatement for a second catastrophe event in 1995 at current rates. Both the retention level and the aggregate coverage limit for 1995 are higher than in prior years.
SAFECO's insurance subsidiaries do not enter into retrospective reinsurance contracts and have not participated in any unusual or nonrecurring reinsurance transactions such as "swaps" of reserves or portfolio loss transfers. SAFECO does not use "funding covers" and has not participated in any surplus relief transactions. None of SAFECO's significant reinsurers are experiencing financial difficulties. Additional information on reinsurance can be found in Note 5 on page 54 in the Annual Report to Stockholders.
In 1993, approximately 2,400 active insurance companies competed for $242 billion in property and casualty insurance premiums in the United States. The SAFECO group of property and casualty companies ranked 26th among significant groups of such companies, based on net premiums written.
- 9 - PART I
ITEM 1. BUSINESS (Continued)
Life and Health Operations
Subsidiaries engaged in the life and health insurance business are SAFECO Life Insurance Company, SAFECO National Life Insurance Company, First SAFECO National Life Insurance Company of New York and SAFECO Administrative Services, Inc. These companies offer individual and group insurance products, pension plans and annuity products. SAFECO Life's major market in the group operations is excess loss medical insurance, sold to self-insured employers. Products are marketed through professional agents in all states and the District of Columbia.
SAFECO Life Insurance Company reinsures portions of its individual and group life, accident and health insurance through commercial reinsurance treaties, thus providing protection against large risks and catastrophe situations.
In the life and health insurance field, SAFECO Life Insurance Company competes against some of the largest corporations in the United States. On the basis of 1993 statutory premiums, SAFECO Life Insurance Company ranked 47th among life insurance companies doing business in the United States.
Many life insurance companies' pension and annuity products have been impacted by general economic conditions, volatile investment returns, rating downgrades, increased competition and decisions by plan sponsors to diversify assets and fund management. SAFECO Life Insurance Company has experienced an increase in the level of withdrawal of funds from its pension and annuity business (see Statement of Consolidated Cash Flows on page 40 of the 1994 Annual Report to Stockholders -- Return of Funds Held Under Deposit Contracts), due to scheduled payouts on distribution-type products and the interest rate environment. However, SAFECO Life Insurance Company's overall withdrawal experience remains relatively modest, and recent interest rate increases have increased SAFECO Life Insurance Company's sales of fixed income pension and annuity products. The table on page 11 sets forth a summary of the components of "Funds Held Under Deposit Contracts" at December 31, 1994 and describes the applicable surrender charges and surrender experience.
- 10 - DETAIL OF SAFECO LIFE INSURANCE COMPANIES' FUNDS HELD UNDER DEPOSIT CONTRACTS
- 11 - PART I
ITEM 1. BUSINESS (Continued)
Investments
A description of SAFECO's investment portfolio begins on Page 33 of the 1994 Annual Report to Stockholders. SAFECO's consolidated investments in mortgage-backed securities (primarily residential collateralized mortgage obligations, or CMOs, and pass-throughs) totaled $2.2 billion at market value at December 31, 1994. Approximately 97% of these securities are held in the life and health insurance portfolio, with the balance held in the property and casualty insurance portfolio. Approximately 94% of the mortgage- backed securities are government/agency backed or AAA rated at December 31, 1994. Less than 1% of SAFECO's mortgage-backed securities are of the riskier, highly volatile type (e.g., interest only, inverse floaters, etc.). SAFECO has intentionally not invested significant amounts in the riskier types of mortgage-backed securities. The following two tables detail SAFECO's consolidated holdings of mortgage-backed securities.
SAFECO Consolidated Holdings of Mortgage-Backed Securities at December 31, 1994 (dollar amounts in millions):
- 12 - PART I
ITEM 1. BUSINESS (Continued)
The quality distribution of SAFECO's mortgage-backed security portfolio as of December 31, 1994 as a percentage of GAAP market value is as follows:
The following table presents pretax investment income yields for SAFECO's property and casualty and life and health insurance subsidiaries (calculations based on GAAP amortized cost):
The declines in the investment income yields for both portfolios are primarily due to the lower interest rate environment in 1992, 1993 and for the first part of 1994. Rising rates in 1994 have resulted in higher yields on new money invested. The property and casualty decreases also reflect the higher percentage of tax-exempt securities in this portfolio.
Other Operations
The other subsidiaries of the Corporation, which are engaged in lines of business other than insurance, have been acquired or organized since 1966 in the course of a program of diversification. These include SAFECO Properties, Inc. and its subsidiaries (including Winmar Company, Inc. and SAFECARE Company, Inc.), SAFECO Credit Company, Inc., SAFECO Asset Management Company, SAFECO Securities, Inc., SAFECO Services Corporation, SAFECO Trust Company, PNMR Securities, Inc. and Talbot Financial Corporation.
Winmar Company, Inc., acquired in 1967, invests in and manages real estate properties, primarily regional shopping centers. These properties are located in or near Burlington, Seattle, Vancouver and Silverdale, Washington; Cleveland and Columbus, Ohio; Louisville, Kentucky; West Valley City, Utah; Rancho Mirage, California; Boise, Idaho; Medford, Albany, Tigard and Jantzen Beach, Oregon; Milwaukee, Wisconsin; and San Antonio, Texas. Winmar also offers real estate services, including property management, design and construction management and tenant leasing services. See Item 2

Item 2 - Properties, for additional information.
SAFECO Properties, Inc. sold its hospital operating and management company (SAFECARE Health Services, Inc.) in May of 1992. See page 32 of the 1994 Annual Report to Stockholders for more information.
- 13 - PART I
ITEM 1. BUSINESS (Continued)
SAFECO Credit Company, Inc., organized in 1969, provides loans and equipment financing and leasing to commercial businesses. Approximately 10 to 15% of the business of SAFECO Credit Company, Inc. consists of loans to other members of the SAFECO group. These loans are limited to 50% or less of the total loans outstanding.
SAFECO Asset Management Company, acquired by the Corporation in 1973, serves as the investment advisor to the SAFECO Mutual Funds and various institutional accounts of unrelated organizations.
SAFECO Securities, Inc., organized in 1967, is the principal underwriter of the SAFECO Mutual Funds including: the SAFECO Common Stock Trust, SAFECO Bond Trust, SAFECO Tax-Exempt Bond Trust and the SAFECO Money Market Trust, totaling fourteen separate investment portfolios, which are marketed directly to the public; the SAFECO Institutional Series Trust which is marketed to institutions and has one investment portfolio; the SAFECO Advisor Series Trust which is sold to the public through broker/dealers and which has eight investment portfolios each of which has three classes of stock. In addition, SAFECO Securities, Inc. is the principal underwriter for the SAFECO Resource Series Trust mutual fund which has five separate investment portfolios and for the variable insurance products issued by SAFECO Resource Variable Account B, SAFECO Separate Account SL and SAFECO Variable Account C, all of which are separate accounts of SAFECO Life Insurance Company.
SAFECO Services Corporation, organized in 1972, is the transfer agent for the SAFECO Mutual Funds.
SAFECO Trust Company, organized in 1994, provides asset management and trust administrative services to high net worth individuals and unrelated organizations.
PNMR Securities, Inc., organized in 1986, acts as a broker-dealer, making shares of unaffiliated and affiliated mutual funds and proprietary and non-proprietary variable insurance products available to the public through its registered representatives.
Talbot Financial Corporation, acquired by the Corporation in 1993, is a broad-based insurance brokerage with a heavy emphasis on the distribution of qualified and non-qualified annuity products and mutual funds through the banking and brokerage arenas.
- 14 - PART I
ITEM 2. PROPERTIES
Following is a brief description of the materially important properties owned and leased by SAFECO and its subsidiaries.
SAFECO's property and casualty group leases from General America Corporation (wholly-owned subsidiary of SAFECO Corporation), its home office building complex located in Seattle, Washington. This complex totals 574,000 gross square feet. A 700-car parking garage is connected to the complex.
SAFECO's life and health insurance companies lease their home office building complex, located in Redmond, Washington, from General America Corporation. This complex totals 232,000 gross square feet.
Other buildings owned and occupied by the Companies include a service facility in Redmond, Washington, as well as regional and branch offices in Atlanta, GA; Fountain Valley, CA; Cincinnati, OH; Denver, CO; Portland, OR; St. Louis, MO; and Redmond and Spokane, WA, comprising 949,000 gross square feet.
All owned buildings are of modern construction, including air conditioning. All other branch and service offices utilize leased premises comprising 422,000 gross square feet, generally for periods of five years or less.
Winmar Company, Inc. is engaged in the investment in and management of a wide variety of real estate projects, primarily regional shopping centers, located throughout the United States. The projects are owned by subsidiaries of Winmar and in conjunction with other investors, and others are leased under long-term leases.
The following is a summary of the property leased to others. All construction is of steel or steel and concrete.
Winmar also owns or leases pursuant to long-term ground leases 1,497 acres of undeveloped land, primarily in Washington, Oregon, Texas and California.
- 15 - PART I
ITEM 2. PROPERTIES (Continued)
SAFECARE Company, Inc. owns and leases healthcare facilities, which contain approximately 400 beds, to qualified operators. SAFECARE also owns and leases to third parties medical office buildings totaling 46,000 square feet.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
The insurance and other subsidiaries of the Corporation, because of the nature of their business, are subject to certain legal actions filed or threatened, all in the ordinary course of business.
The property and casualty insurance subsidiaries of the Corporation are parties to a number of lawsuits for liability coverages related to environmental claims, for which adequate reserves have been established. The loss and adjustment expense with respect to any such lawsuit, or all lawsuits related to a single incident combined, is not expected to exceed $15 million. See Pages 7 and 8 of Item 1 for more information regarding the liability of such subsidiaries for environmental claims.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT
As of March 16, 1995 these are the names, ages and positions of the executive officers of the Registrant as required by Item 10. No family relationships exist.
- 16 - PART I
EXECUTIVE OFFICERS OF THE REGISTRANT (Continued)
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS.
Pages 35 and 63 of the 1994 Annual Report to Stockholders are hereby incorporated by reference.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
Pages 64 through 67 of the 1994 Annual Report to Stockholders are hereby incorporated by reference.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Pages 25 through 35 of the 1994 Annual Report to Stockholders are hereby incorporated by reference.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pages 37 through 63 of the 1994 Annual Report to Stockholders are hereby incorporated by reference.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
The definitive proxy statement to be filed within 120 days after December 31, 1994, excluding the Annual Report of the Compensation Committee on Executive Compensation appearing on Pages 9 through 16, is hereby incorporated by reference to fulfill the requirements of Item 10, "Directors and Officers" (except for that portion of Item 10

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:
(a) FINANCIAL STATEMENTS AND EXHIBITS
Consent of Independent Auditors
SAFECO Corporation and Subsidiaries:
Financial Statements (pages 36 through 63 of the 1994 Annual Report to Stockholders, containing the following statements, are hereby incorporated by reference):
Consolidated Balance Sheet, December 31, 1994 and 1993.
Statement of Consolidated Income for the Three Years Ended December 31, 1994.
Statement of Consolidated Cash Flows for the Three Years Ended December 31, 1994.
Notes to Financial Statements for the Three Years Ended December 31, 1994.
Report of Independent Auditors.
SAFECO Corporation and Subsidiaries Supplemental Consolidating Information:
Balance Sheet, December 31, 1994 and 1993.
Statement of Income for the Year Ended December 31, 1994.
Statement of Cash Flows for the Year Ended December 31, 1994.
Schedules:
Schedule I - Summary of Investments - Other Than Investments in Related Parties, December 31, 1994.
Schedule II - Condensed Financial Information of the Registrant (Parent Company Only).
Balance Sheet, December 31, 1994 and 1993.
Statement of Income for the Three Years Ended December 31, 1994.
Statement of Cash Flows for the Three Years Ended December 31, 1994.
Statement of Changes in Stockholders' Equity for the Three Years Ended December 31, 1994. (See page 42 of the 1994 Annual Report to Stockholders which is hereby incorporated by reference.)
Schedule III - Supplementary Insurance Information for the Years Ended December 31, 1994, 1993 and 1992.
Schedule IV - Reinsurance for the Years Ended December 31, 1994, 1993 and 1992.
- 18 - PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K: (Continued)
Schedule VI - Supplemental Information Concerning Property/Casualty Insurance Operations for the Years Ended December 31, 1994, 1993 and 1992.
The following Article 7 schedules are omitted because the information is provided elsewhere in the Annual Report (Form 10-K) or because of the absence of conditions under which they are required:
Schedule V
Exhibits:
- 19 - PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K: (Continued)
(b) EXHIBITS AND REPORTS ON FORM 8-K
No Form 8-Ks were filed, nor required to be filed for any event during the quarter ended December 31, 1994.
- 20 - SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on this 16th day of March, 1995.
SAFECO CORPORATION
By ROGER H. EIGSTI --------------------------------- Roger H. Eigsti, Chairman, Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
- 21 -
- 22 -
CONSENT OF INDEPENDENT AUDITORS
SAFECO Corporation:
We consent to the incorporation by reference in this Annual Report (Form 10-K) of SAFECO Corporation of our report dated February 10, 1995, included in the 1994 Annual Report to Shareholders of SAFECO Corporation.
Our audits also included the financial statement schedules of SAFECO Corporation listed in Item 14(a). These schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in Registration Statements (Form S-8 Nos. 2-58654 and 33-14381 and Form S-3 No. 33-52863) of SAFECO Corporation of our report dated February 10, 1995, with respect to the consolidated financial statements and schedules of SAFECO Corporation included and/or incorporated by reference in the Annual Report (Form 10-K) for the year ended December 31, 1994.
ERNST & YOUNG LLP
Seattle, Washington March 15, 1995
SAFECO CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONSOLIDATING INFORMATION BALANCE SHEET, DECEMBER 31, 1994 (In Thousands)
SAFECO CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONSOLIDATING INFORMATION (CONTINUED) BALANCE SHEET, DECEMBER 31, 1993 (In Thousands)
SAFECO CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONSOLIDATING INFORMATION STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1994 (In Thousands)
SAFECO CORPORATION AND SUBSIDIARIES SUPPLEMENTAL CONSOLIDATING INFORMATION STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1994 (In Thousands)
Schedule I SAFECO CORPORATION AND SUBSIDIARIES
SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES DECEMBER 31, 1994 (In Thousands)
(1) The carrying value of investments in fixed maturities, mortgage loans and real estate that have not produced income for the last twelve months is less than one percent of the total of such investments at December 31, 1994.
Schedule II SAFECO CORPORATION (Parent Company Only)
Balance Sheet (In Thousands Except Share Amounts) _____________________
Schedule II SAFECO CORPORATION (Parent Company Only)
STATEMENT OF INCOME (In Thousands)
Schedule II SAFECO CORPORATION (Parent Company Only)
STATEMENT OF CASH FLOWS (In Thousands)
SCHEDULE III
SAFECO CORPORATION AND SUBSIDIARIES SUPPLEMENTARY INSURANCE INFORMATION FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 (In Thousands)
Schedule III
SAFECO CORPORATION AND SUBSIDIARIES SUPPLEMENTARY INSURANCE INFORMATION FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(In Thousands)
(1) Property and casualty insurance companies' investments are available for payment of claims and benefits for all product lines within the segments; therefore, such investments and the related investment income have not been identified with specific segments. In the life and health companies, a major portion of investment income and assets is specifically identifiable within an industry segment. The remainder of these amounts has been allocated in proportion to the mean policy reserves and liabilities identified with each segment.
Schedule IV SAFECO CORPORATION AND SUBSIDIARIES
REINSURANCE FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 (In Thousands)
Schedule VI
SAFECO CORPORATION
SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY INSURANCE OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 (In Thousands)
SAFECO CORPORATION AND SUBSIDIARIES
EXHIBIT INDEX*
SAFECO CORPORATION AND SUBSIDIARIES (Continued)
EXHIBIT INDEX*
* Copies of Exhibits are available without charge by making a written request to:
Rod A. Pierson Senior Vice President, Secretary and Controller SAFECO Corporation SAFECO Plaza Seattle, WA 98185