Seattle-based SAFECO is taking a number of steps to cut losses and bring growth back to the company which has been in business since 1923.
“The expenses we currently have were not a formula for success,” SAFECO President and CEO Mike McGavick told Insurance Journal. “We’re trying to get our expenses to a competitive level. For sometime now, we’ve had declining revenue and increasing expenses.”
The steps taken by the company include cutting employment by 10 percent over the next two years, with half of the reductions coming this year; adding marketing support for the company’s national network of independent insurance agents; and while not formally exiting the homeowners market in any of the states, pricing the product at a level it deems necessary to give the company a fair return.
Current offices, including those in Chicago, Cincinnati, Denver, Hartford, Portland, Spokane, St. Louis, and Pleasant Hills, Calif., will continue operating with reduced staffs, giving more attention and detail to supporting the sales efforts of insurance agents and the management of customer claims.
The company plans to consolidate its regional offices into the following locations: Atlanta, Dallas, Indianapolis, Seattle, and Fountain Valley, Calif.
“We’re streamlining our operations so that accountability is clearer and more precise,” McGavick noted. “You’ll have someone you can go to for homeowners in Washington State and ask ‘What’s going on?'”
The company is reducing positions in information technology, marketing, finance, and some others. “In the I.T. area, we’re reducing people in the unit, but expect spending on technology to increase,” McGavick added.
McGavick said that employees being let go will have access to job counselors to help them find new employment, and those told that they will be let go at a future date will have access to incentive programs to keep them motivated between now and then.
“We’re taking decisive action to turn things around,” McGavick concluded.
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