Safeco has big plans for downtown office

In officially celebrating its move to downtown Seattle on Thursday, Safeco Corp. did more than mark a move of hundreds of employees from the University District, which it called home since the 1930s.

The company also hopes the move signifies a shift in Safeco's external image and internal attitudes as more responsive, nimble, innovative and financially adept, attributes it will need to survive in an increasingly competitive and tough industry.

"At a cultural level, we needed to get more externally focused," said Safeco Chief Executive Paula Reynolds in an interview with the Seattle P-I. Moving downtown will give Safeco greater visibility, help recruit and retain employees and put the company more in touch with current and potential customers, she said. "To come down to this terrifically vibrant environment really changes the outlook."

Safeco now occupies 284,000 square feet, home to 1,100 employees, in the tall black office tower at 1001 Fourth Ave., formally and formerly known as Seafirst Plaza, unofficially known for years as "the box the Space Needle came in." It's been renamed Safeco Plaza.

Its Northwest Regional office occupies 140,000 square feet, housing 800 employees in the Second & Seneca Building, the green-dome-topped structure known colloquially as the "Ban Roll-on building" but now to be officially called Safeco Center.

Safeco says it's making other adjustments in how and where its employees work. About 1,500 of its employees nationally, and 1,000 in the Puget Sound area, do some or all of their work by telecommuting, with the company providing "drop-in" space for those who spend some time at the office, Reynolds said.

The move from the Safeco tower in the University District had some practical motivations as well. For one, the timing was right. At the time Safeco was looking for new quarters, downtown Seattle had a surplus of Class A office space. "It was an alignment of the constellations," Reynolds said. The relocation will generate long-run savings for Safeco, she added, and the absorption of that much space downtown might have spurred the current development wave in South Lake Union.

The new quarters also give Safeco access to the latest in office technology such as wireless connectivity and video conferencing throughout. "We would have had to tear into a lot of walls" to bring the 1973-vintage U District tower up to the same capabilities, she said.

Meanwhile, selling the old tower to the University of Washington freed up capital that Safeco can reinvest in its business or use to buy back its stock. Safeco and its subsidiaries are the third-largest insurance group in the state in property and casualty coverage when ranked by premiums written in 2006, behind Zurich Insurance Group (which includes Farmers) and State Farm, according to the Insurance Commissioner's Office.

Exactly how Safeco deploys that capital will be a major challenge for Reynolds and Safeco in 2008. Reynolds said the company has a strong balance sheet with low debt, so it's in a position to take advantage of opportunities should a potential acquisition come along. On the other hand, Reynolds doesn't want to have too much capital tied up in what is currently "a bit of a soft market cycle in insurance."

For the moment Safeco will work on retaining existing customers, look for growth in lines such as surety and business insurance and try to push through some premium increases where it can.

"It is a balancing act between growth and profitability," she said.

One area to which Safeco has directed capital is innovation in products and how it gets those to agents and customers. Through a venture called Open Seas Solutions, Safeco has come up with such products as Teensurance, which offers parents such services as a GPS device for monitoring their teen's driving habits.

Safeco plans to open what it's calling an experimental agency at a storefront location in the Second & Seneca Building in February. Reynolds said the agency will be used for training agents and testing new products and technologies.