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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                                    10/9/00
                Date of Report (Date of earliest event reported)

                               SAFECO CORPORATION
               (Exact name of registrant as specified in Charter)

     WASHINGTON                     1-6563                    91-0742146
   (State or other                (Commission                (IRS Employer
   jurisdiction of                File Number)            Identification No.)
   incorporation)

               SAFECO Plaza, Seattle, Washington              98185
          (Address of principal executive officers)         (Zip Code)


                                 (206) 545-5000
              (Registrant's telephone number, including area code)
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Item 5. Other Events

SAFECO PROFIT SLOWED BY LOSSES IN LARGE COMMERCIAL AND HOMEOWNERS INSURANCE

       SEATTLE - (Oct 9, 2000) - SAFECO (NASDAQ: SAFC) announced today that
higher than expected underwriting losses in its large commercial and homeowners
lines will slow profit improvement in the third quarter.

       "Although we are on track with our expected results for personal auto and
small commercial (American States Business Insurance), our expected combined
ratios for large commercial and homeowners will be higher than we anticipated at
the beginning of the quarter," said Boh Dickey, SAFECO president and chief
operating officer. "Given these results, our overall combined ratio is expected
to be in the 110-111 range, a slight improvement over the second quarter."

       The company said that continuing adverse trends in workers compensation
and commercial auto, and adverse development of claims from catastrophe losses
in homeowners in the second quarter, would impact third-quarter results.

       SAFECO will report its third-quarter results on Oct. 23, and expects its
operating earnings to be between 5 and 10 cents per share, which is similar to
the company's performance in each of the first two quarters of the year.

       SAFECO, in business since 1923, is a Fortune 500 company based in Seattle
that sells insurance and related financial products through more than 17,000
independent agents and financial advisors. More information about SAFECO is
available online at www.safeco.com.

FORWARD-LOOKING INFORMATION IS SUBJECT TO RISK AND UNCERTAINTY

Statements made in this news release that relate to anticipated financial
performance, business prospects and plans, regulatory developments and similar
matters may be considered "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. Statements in this news release that
are not historical information are forward-looking. Such statements are subject
to certain risks and uncertainties that may cause the operations, performance,
development and results of our business to differ materially from those
suggested by the forward-looking statements. The risks and uncertainties
include:

- Our ability to obtain rate increases and non-renew underpriced insurance
  accounts;
- Realization of growth and business retention estimates;
- Achievement of our premium targets and profitability;
- Changes in competition and pricing environments;
- Achievement of our expense reduction goals;
- The occurrence of significant natural disasters, including earthquakes;
- Weather conditions, including the severity and frequency of storms,
  hurricanes, snowfalls, hail and winter conditions;
- Driving patterns;
- Fluctuations in interest rates;
- Performance of financial markets;
- Court decisions and trends in litigation;
- Legislative and regulatory developments;
- The adequacy of loss reserves;
- The availability and pricing of reinsurance;
- The development of major Year 2000 related claims or liabilities; and
- General economic and market conditions.

In particular, because insurance rates in some jurisdictions are subject to
regulatory review and approval, our achievement of rate increases may occur in
amounts and on a time schedule different than planned, which may affect our
efforts to restore earnings in our property and casualty lines.
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                                   SIGNATURE


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                        SAFECO CORPORATION

Dated: October 9, 2000                  By: /s/ H. Paul Lowber
                                        ------------------------------
                                        H. Paul Lowber
                                        Vice President, Controller and
                                        Chief Accounting Officer