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A Closer Look at the Safeco Insurance Company

Safeco Corporation once was the 23rd largest American national insurance carrier. But when the organization was purchased by Liberty Mutual in 2008, it joined a much larger group of insurance companies, making it part of the 5th largest insurance insurer in America. Founded in Seattle, Washington in 1923 by Hawthorne K. Dent. Its original name was The General Insurance Company of America, and is still a name used on some of its products. Thirty years later the company became known as Selective Auto and Fire Ensurance Company of America, or it acronym SAFECO.

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Financial Outlook

Liberty Mutual Group's acquisition of Safeco was a mixed blessing: Standard & Poor's lowered financial strength rating from A to A-. Liberty Mutual's loss of credibility was Safeco's gain, moving up from a BB+ rating. But the state of the provider is still somewhat enigmatic. This is much higher than the the market's and Standard & Poor's initial response which was to put Liberty on CreditWatch due to negative implications of the transaction. If these industry bulwarks can't make up their minds, it's a little beyond the scope of this article to outguess them.

Claims Service

Well, sad to say, it doesn't look very good for the provider in this aspect of their business. While JD Powers & Associates doesn't break out their ratings specifically for claims service, the carrier nonetheless received only two stars. But this belies the carrier's strength in its home market of the American northwest. Additionally, their parent company, Liberty Mutual rates three stars from JD Powers. So, it would indicate a little caution is recommended to those seeking out a new policy from the provider. Help from an independent broker might yield more specific information.

Customer Service

Unlike the low score assigned by JD Powers' review, the provider receives an A (Excellent) customer service rating from A.M. Best Company, an independent firm that rates the financial strength and performance of insurance companies. Again in contradiction to JD Powers, the carrier has long been know for its quality of customer service and for having among the best in customer satisfaction for homeowners insurance. They should certainly gain points for their innovation from parents of teens. On June 27, 2007, the organization introduced a new service, Teensurance, with the slogan providing parents peace of mind while teens earn their freedom. Teensurance puts GPS units in cars covered by the policy and are driven by children of insureds. It allows parents to monitor location, speed, distance and driving habits. For enhanced safety, a parent can actually remotely lock or unlock doors! Safeco also provide 24/7 roadside assistance as a feature of this policy enhancement.

Report Card: B+

Most in the industry have accepted the Standard & Poor enhanced rating for the provider, and thanks to their strong customer base, the carrier seems to have long weathered the perception of other rating agencies like JD Powers & Associates. With a strong financial outlook in a weakened economy thanks to the acquisition of the brand by giant Liberty Mutual, Safeco has inherited its parent company's higher credit rating and more. But due to conflicting and foggy information, our recommendation for you is that you consider the carrier only slightly a safe bet.