Safeco P/C Group Affirmed

Fitch Ratings affirmed the “AA-” insurer financial strength rating on the Safeco property and casualty group. In addition, Fitch affirmed “A-” long-term and senior debt ratings on Safeco Corp. and the “BBB+” rating on Safeco Capital Trust I’s (Safeco Capital) capital securities. The rating outlook is stable.

Fitch’s rating action reflects Safeco P/C’s strong competitive position in key business lines, favorable earnings trends, and solid capitalization. Fitch’s ratings on Safeco and Safeco Capital reflect these factors, as well as Safeco’s good operating earnings-based and cash basis interest coverage.

Partially offsetting these positives is intense competition and cyclical forces in Safeco P/C’s key auto and homeowners’ insurance lines that Fitch believes will challenge the company’s ability to sustain current profitability levels.