Mr. McGavick in a conference call with analysts chose to put a positive spin on results, including the second-quarter combined ratio of 89.1, which rose from 85.4 in 2004.

Noting that the combined ratio was evidence of the continuation of a "truly strong bottom-line performance," he said the figure fell in line with recent quarters, even though it wasn't as good as the truly extraordinary" 85.4 figure recorded last year.

Concerning his political activity, Mr. McGavick said that "a number of folks began encouraging me to consider the possibility that there was public service on my horizon," and "I've decided to step down...in order to consider that possibility fully."

While he said the best way to do that is to "make a clean break" so that his consideration of this possibility will not in any way impact the company, Mr. McGavick will actually stay on as chairman of the board until year-end. He leaves as CEO at the end of the month.

Mr. McGavick also said the board has requested that he be available to continue to lead the company if a new CEO is not in place by Aug. 31--and that he has agreed to spend the remainder of the year traveling around to meet with agents and perform other "transitional leadership services."

Safeco Lead Director Bob Cline said that many potential successors "have already been identified," and that both internal and external candidates are being considered.

The company said that second-quarter catastrophe losses fell more than 50 percent to $13.1 million pretax compared to $29 million in the second quarter of 2004.

Overall written premiums grew 3.6 percent. "While that's a healthy rate given what we see going on in the marketplace, we note that it's in line with our expectation that premium growth would slow at this time--as we had forecast earlier in the year," Mr. McGavick said.

Mr. McGavick's background includes a stint in 1988 as chief of staff for former GOP Sen. Slade Gordon, who Ms. Cantwell defeated by a razor-thin margin in 2000.

As chief of staff, "The job was all-around communications and, in essence, what we now tend to call brand," he said in a 2001 interview with National Underwriter, drawing a parallel to the world of personal insurance, where "it's very important how you handle your brand."