Ailing Safeco Hires New Chief Executive

Safeco Corp. named Mike McGavick its chief executive, ending a four-month search for a leader to turn around results at the insurance company. McGavick, 42, previously in charge of rival insurer CNA Financial Corp.’s commercial insurance unit, replaces interim CEO William Reed. Seattle-based Safeco, a 78-year-old provider of home, car, life and health insurance, has had poor results recently as it has been hit by low premium rates and high claims. Analysts said the situation was aggravated by the company’s $2.8-billion purchase of insurer American States Financial Corp. in 1997. The eighth-largest U.S. home insurer has faced growing shareholder protests as its stock price has tumbled 55% in the last three years to about $25. Safeco rose 13 cents to close at $24.56 on Nasdaq. The company started a plan last year to turn around its results by selecting risks more carefully and raising premium rates but still reported an operating loss of $9.6 million for its fourth quarter.