Safeco Repurchases 10.2 Million Shares

Seattle-based Safeco has repurchased 10.2 million shares, or approximately 8.8 percent, of its outstanding common stock through an Accelerated Share Repurchase (ASR) program. The shares were purchased from dealer Lehman Brothers at $58.75 per share, for a total cost of approximately $600 million.

“We remain committed to returning excess capital to our shareholders,” said Paula Rosput Reynolds, Safeco president and CEO. “The current buyback program is the right discipline in the current market environment and reflective of Safeco’s continued profitability and strong capitalization.”

In connection with the ASR program, the dealer will purchase shares of Safeco common stock in the market over the next several months. The program is expected to be completed within an approximate window of four-to-six months. Approximately $400 million of the shares purchased under the ASR program are subject to a cap, a mechanism that sets a maximum price for shares repurchased.

At the conclusion of the dealer’s purchase period, the ASR program will be settled with Safeco either receiving or paying a price adjustment based on the price of Safeco’s shares purchased in the market by the dealer. Safeco will receive a price adjustment if the total volume-weighted average share price during the purchase period, less a specified discount, is less than the amount paid by Safeco on Nov. 6, 2006, and will pay a price adjustment, subject to the cap, if the total volume-weighted average share price during the purchase period, less a specified discount, is more than the amount paid by Safeco on Nov. 6, 2006. The price adjustment may be made in shares or cash, at Safeco’s election.

No trading activity has occurred in the public market related to these actions before issuance of this press release.

In the first nine months of 2006, Safeco repurchased 10.4 million shares, or 8.5 percent, of its outstanding common stock for $562 million. On Nov. 2, 2006, Safeco announced that its board of directors had increased the company’s share repurchase authorization to 15 million shares. Following execution of the current ASR program, approximately 4.8 million shares will remain available for repurchase under board-approved programs.

For more information, visit www.safeco.com.