Safeco to Lay Off 450 Workers, Transfer Jobs

Safeco Corp., the property-casualty insurer whose shares have fallen 19% this year, said it will fire about 450 employees and transfer other jobs as the company overhauls its business insurance operation.

The Seattle-based insurer said the overhaul will help it concentrate on the small to medium-size business insurance market. A separate unit to underwrite larger accounts will be created, though the company said it expects large business volume to decrease.

The overhaul is the latest effort by Chief Executive Mike McGavick to boost Safeco’s profitability after the acquisition of American States Insurance Group in 1997, which left the company with a costly distribution system. McGavick, who joined the company in January, also has raised prices, cut the dividend and announced plans to sell off Safeco’s commercial leasing unit to raise cash to pay down debt.

Safeco shares closed up 11 cents at $26.50 on the NYSE.