Last year's fourth-quarter results were marred by an $18 million loss posted for Enron surety bonds, weather losses in the homeowners line, and a $17 million increase in losses related to the World Trade Center attacks, among other things.

Mr. McGavick said the company is "thrilled to be where we are" and while it may be behind some competitors "we like our trajectory." The company plans significant growth but "we're very disciplined about this," he said.

Although the company has already made some statements about future earnings this year, Mr. McGavick said it was the "last time we plan to offer guidance." He said SAFECO has concerns over corporate governance issues and the current Securities and Exchange Commission environment. For now, the company has said it expects a "double-digit return on equity."

On an annual basis, the company said returns were the best in four years, with net income of $301.1 million, or $2.33 per share, for the full year 2002, compared with a 2001 net loss of $989.2 million-a loss of $7.75 per share.

Mr. McGavick said the company, in the course of a turnaround to eliminate unprofitable business had been "shooting rats and now we're down to shooting mice."

He said the company had a moratorium on sales of workers' compensation insurance in California and that its share of workers' comp in the California market was down to a half a percent.

California's Insurance Commissioner John Garamendi, in past years has had a contentious relationship with insurers. In response to a question about the regulator's impact, Mr. McGavick, said the commissioner had promised insurers a "new Garamendi."

He added the company was prepared to make some dramatic moves, if Mr. Garamendi made it unhappy. "If anything negative emerges, we will take decisive action," he said.

The company said income before realized investment losses in the fourth quarter was $93.5 million, which includes a $4.4 million restructuring charge--the final charge associated with a reorganization announced 18 months ago. This compared reported income before realized gains of $0.4 million for the fourth quarter of last year.

Mr. McGavick noted good performance by the company's life line, which he said had "kept the company going over the last few years." He said the company had reduced losses in it auto insurance line and was seeing good growth in its preferred auto book of business.

The CEO said the company is seeing continued growth in its personal auto insurance line and "our Homeowners line is showing the result of an aggressive focus on profitability, and Business Insurance is beginning to generate solid results."

SAFECO said its financial results in 2001 were affected by a number of major items, including $1,112.4 million in after-tax charges for goodwill write-offs, third-quarter reserve strengthening and restructuring, and $58.2 million in gains from the sale of the company's credit subsidiary. Excluding these factors and net realized gains, SAFECO said its income before charges increased by $275.4 million in 2002.

SAFECO reported net realized investment losses of $36.4 million after tax in the fourth quarter, which included writing down investment holdings in United Airlines. This compares with after-tax realized investment gains of $8.2 million in fourth-quarter 2001.

For the year, net realized gains totaled $53.5 million after tax, down from $61.5 million in 2001.

The company said its auto insurance combined ratio in the fourth quarter was 102--an improvement over 104 in the fourth quarter of 2001, but higher than the 101.2 reported in the third quarter of 2002 due to increased agent commissions and training initiatives for SAFECO's Claims organization.

SAFECO's homeowners insurance line produced a pretax underwriting profit of $12.4 million in the fourth quarter, compared with an underwriting loss of $33.2 million during the same period of 2001.

For homeowners, the combined ratio improved to 93.5 in the fourth quarter, representing improvements both over the 117.8 ratio recorded in the same quarter of 2001 and a 97.1 for third-quarter 2002.