Liberty Mutual and Safeco Report Transaction Continues on Schedule for Closing

BOSTON & SEATTLE--(Business Wire)--
Liberty Mutual Group ("Liberty Mutual") and Safeco Corporation
(NYSE: SAF) ("Safeco") announced that Liberty Mutual reaffirms its
commitment to consummate its previously announced acquisition of
Safeco by the end of the third quarter of 2008, subject to receipt of
Safeco shareholder approval and applicable regulatory approvals. Under
the terms of the merger agreement, Liberty Mutual will acquire all
outstanding shares of common stock of Safeco for $68.25 per share in
cash. The transaction is not subject to financing contingencies.

Neither Liberty Mutual nor Safeco has any intention, and
specifically disclaims any obligation, to provide any update with
respect to the matters addressed in this release or to otherwise
address any rumors in the market generally, and both companies'
policies with respect to addressing market rumors remains in place.

About Liberty Mutual Group

Boston-based Liberty Mutual Group is a diversified global insurer
and sixth largest property and casualty insurer in the U.S. based on
2007 direct written premium. The Liberty Mutual Group also ranks 94th
on the Fortune 500 list of largest corporations in the U.S. based on
2007 revenue. As of December 31, 2007, Liberty Mutual Group had
$94.742 billion in consolidated assets, $82.376 billion in
consolidated liabilities and $25.961 billion in annual consolidated
revenue.

Liberty Mutual Group, through its subsidiaries and affiliated
companies, offers a wide range of insurance products and services,
including personal automobile, homeowners, commercial multiple peril,
commercial automobile, general liability, surety, workers
compensation, global specialty, group disability, assumed reinsurance
and fire.

Liberty Mutual Group (www.libertymutualgroup.com) employs over
41,000 people in more than 900 offices throughout the world.

About Safeco Corporation

Safeco provides insurance for individuals and for small- and
mid-sized businesses. Safeco offers a wide array of property and
casualty insurance products, including personal auto and home as well
as coverage for small- and mid-sized businesses, and surety bonds.
Safeco sells its products through a national network of agents and
brokers.

FORWARD LOOKING STATEMENTS

This communication, and other statements that Safeco and Liberty
Mutual may make, including statements about the benefits of Liberty
Mutual's proposed acquisition of Safeco (the "Acquisition"), may
contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended, with respect to
Safeco's and Liberty Mutual's anticipated financial performance,
business prospects and plans, and similar matters. Forward-looking
statements are typically identified by words or phrases such as
"will," "anticipate," "estimate," "expect," "project," "intend,"
"plan," "believe," "target," "forecast," and other words and terms of
similar meaning.

Safeco and Liberty Mutual caution that forward-looking statements
are subject to numerous assumptions, risks and uncertainties, which
change over time. Forward-looking statements speak only as of the date
they are made, and Safeco and Liberty Mutual assume no duty to and do
not undertake to update forward-looking statements, whether as a
result of new information, future events or otherwise. Actual results
could differ materially from those anticipated in forward-looking
statements and future results could differ materially from historical
performance. Readers are cautioned not to place undue reliance on
these forward-looking statements. In addition to factors previously
disclosed in Safeco's documents filed with or furnished to the
Securities and Exchange Commission (the "SEC") and those identified
elsewhere in this communication, the following factors, among others,
could cause actual results to differ materially from forward-looking
statements or historical performance: the introduction, withdrawal,
success and timing of business initiatives and strategies; the
approval of publicly filed rate adjustments; changes in political,
economic or industry conditions, the interest rate environment or
financial and capital markets, which could result in changes in demand
for products or services or in the value of Safeco's investment
portfolio; the impact of increased competition; the impact of capital
improvement projects; the unfavorable resolution of legal proceedings;
the impact, extent and timing of technological changes and the
adequacy of intellectual property protection; the impact of
legislative and regulatory actions and reforms and regulatory,
supervisory or enforcement actions of governmental agencies relating
to Safeco, Liberty Mutual and their business and operations; terrorist
activities and international hostilities, which may adversely affect
the general economy, financial and capital markets, specific
industries and Safeco, Liberty Mutual and their business and
operations; the occurrence, geographic areas impacted and severity of
earthquakes, hurricanes, tornadoes or other natural disasters; the
ability to attract and retain highly talented professionals; the
shareholders of Safeco may not approve the Acquisition at the annual
meeting of Safeco shareholders; Liberty Mutual and Safeco may be
unable to obtain governmental and regulatory approvals required for
the Acquisition, or required governmental and regulatory approvals may
delay the Acquisition or result in the imposition of conditions that
could cause the parties to abandon the Acquisition; Liberty Mutual and
Safeco may be unable to complete the Acquisition because, among other
reasons, conditions to the closing of the Acquisition may not be
satisfied or waived; and the outcome of any legal proceedings to the
extent initiated against Safeco, Liberty Mutual and others following
the announcement of the Acquisition cannot be predicted.

Safeco's Annual Report on Form 10-K and Safeco's subsequent
reports filed with the SEC, accessible on the SEC's website at
http://www.sec.gov and on Safeco's website at http://www.safeco.com,
discuss certain of these factors in more detail and identify
additional factors that can affect forward-looking statements. The
information contained on Safeco's website is not a part of this
communication. For a further discussion of these and other risks and
uncertainties affecting Liberty Mutual, see Liberty Mutual's website
at www.libertymutual.com/investors.

PARTICIPANTS IN THE SOLICITATION

Safeco and its executive officers and directors may be deemed to
be participants in the solicitation of proxies from the shareholders
of Safeco in connection with the Acquisition. Information about the
executive officers and directors of Safeco and their ownership of
Safeco common stock is set forth in the definitive proxy statement
filed by Safeco on June 25, 2008.

Liberty Mutual
Richard Angevine, 617-574-6638
Cell: 508-868-1026
Media
or
Safeco Contacts:
Paul Hollie, 206-473-5745
Cell: 206-399-8532
Media
or
Investors
Neal Fuller, 206-473-5020

Copyright Business Wire 2008