Ex-Safeco unit gets a new name: Symetra Financial
Symetra will lease nearly 290,000 square feet in two downtown office towers: Rainier Plaza, which will be renamed Symetra Financial Center, and Key Center.
Symetra's 1,000 Puget Sound-area employees will move next summer, Chief Executive Randy Talbot said. They now work at Safeco's Redmond campus, where they occupy 218,500 of an overall 910,000 square feet.
"It's a great downtown atmosphere, we're very close to the new transit center, and it's going to be an ideal location for our company," said Talbot, who ran the life-and-investment business before its July 31 sale.
The new owner is a consortium of institutions and insurers. The two lead investors, White Mountains Insurance Group of Bermuda and Warren Buffett's Berkshire Hathaway, each own about 24 percent of Symetra; smaller investors include Franklin Mutual, Credit Suisse First Boston, Vestar Capital Partners and Och-Ziff Capital Management Group.
White Mountains and its founder and former chairman, Jack Byrne, made their reputations by buying undervalued insurance and reinsurance operations. [Reinsurance is, essentially, insurance for insurance companies that helps protect them against large claims.]
White Mountains has invested in life insurers before, Chief Financial Officer and Symetra Chairman David Foy said, but this is the first time it's led a buyout of one.
"It's a business I understand pretty well," said Foy, the former chief financial officer for Hartford Life.
Aside from the already-announced shutdown of Safeco Asset Management, Symetra will follow basically the same path Talbot mapped out for the business when it was part of Safeco: Sell life insurance and annuities, not just through agents, but through banks, broker/dealers and other "channels."
"The business-model changes will be small, because our model works," Talbot said. "What will happen is, we will be more focused from the board level down. This is a life-insurance company, not a subsidiary."
At year-end 2003, Safeco's life-insurance group was the 39th-largest in the country by asset size. As of June 30, it had $22 billion in assets, spokesman LeRoi Brashears said.
As a Safeco subsidiary, the unit earned $95.1 million in pretax operating profit the first half of this year, on $1,019.8 billion in revenue.
The company's impending move to Bellevue will lower downtown's vacancy rate to about 11 percent, from 18.6 percent.
Symetra will occupy 218,351 square feet in Rainier Plaza, or slightly more than half the 25-story tower's 431,200 square feet, said Cynthia Rogers, spokeswoman for landlord Equity Office Properties. That will boost its occupancy rate from 79 percent to 97.5 percent, she said.
The insurer will occupy an additional 71,531 square feet in the 22-story, 472,900-square-foot Key Center, Rogers said, raising its occupancy rate from 94.9 percent to 98.6 percent.
Paul Hollie, a spokesman for Safeco, said the company has not decided what to do with the space Symetra will vacate.
Symetra employs 200 people in offices across the country. Non-life-insurance operations employ 300 more people, Talbot said.
White Mountains, besides being business partners with superinvestor Warren Buffett — Berkshire Hathaway owns the equivalent of a 16 percent stake in the company — has to some extent modeled its business strategy on Buffett's "buy good stuff cheap and hold onto it" philosophy.
"Anytime you make an investment, you have to be prepared to hold it forever," Foy said. "If we have to hold onto this investment forever, we'd be very happy."
But another White Mountains project, Montpelier Re Holdings, offers an example of a different path.
After the Sept. 11, 2001, terrorist attacks, when the insurance and reinsurance businesses were in turmoil, White Mountains joined other investors — including some of the same names behind Symetra — to create a reinsurer, Montpelier Re.
Montpelier started with $1 billion in capital, went public in October 2002 and has a stock-market value of $2.2 billion; White Mountains retains a 21 percent stake.
Information from Seattle Times business reporter J. Martin McOmber was used in this report.
Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com