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Safeco Reports Its Best Financial Performance in Five Years

Safeco, parent of mortgage industry insurance specialist Safeco FIS, reported net income of $339.2 million last year, or $2.44 per share, for its best performance since 1998. In 2002, the company reported net income of $301.1 million.

The company said it enjoyed "strong progress" in primary property and casualty businesses.

Mike McGavick, Safeco chairman and CEO, said the performance indicates that "the automated sales and service platform we are building to drive profitable growth are producing excellent results and hold great promise for our future."

He noted that the results come despite an environment of uncertainty in the company's life and investments business, which Safeco has said it intends to sell.

The company did take some hits in the fourth quarter, including a $6 million after-tax restructuring charge related to the company's efforts to reduce expenses by $75 million this year.

The company also said total losses from California wildfires were $10.5 million.

"Our P&C businesses are not operating in line with our profit hurdles. Even with the significant workers compensation reserve charge we took in the third quarter, we came close to break-even in our underwriting results for the year," Mr. McGavick said.

"Our homeowners line turned in another better-than-anticipated performance, and Safeco Business Insurance posted solid underwriting profits for the quarter," he said in the company's earnings statement.

For the full year, consolidated revenue was $7.36 billion, compared with $7.07 billion in 2002.

Safeco FIS provides lender-placed protection, mortgage loan fraud and VSI auto products. The company's products include blanket condominium coverage, blanket second mortgage coverage, blanket vandalism/malicious mischief coverage, windstorm, and real estate-owned property and liability products. The company also offers lender-placed hazard and flood insurance.

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