Safeco announced today it has chosen a veteran of the utilityindustry, Paula Rosput Reynolds, to head the Seattle-basedinsurer.

Ms. Reynolds will take over as the company's new president andchief executive officer effective Jan. 1, 2006. Reynolds also wasappointed to Safeco's board of directors, the company said.

She will replace Mike McGavick who is stepping down to run forthe Washington State U.S. Senate seat.

Ms. Reynolds, 49, currently is chairman, president and CEO ofAGL Resources, an Atlanta-based energy holding company thatincludes six natural gas utility companies, wholesale services andenergy investments.

Safeco said her 27 years in the energy business has includedexecutive positions in Houston and San Francisco.

"Throughout her career, Paula has distinguished herself as aresults-oriented and inclusive leader == setting a clear vision,embracing a diversity of ideas, and encouraging teamwork to bringthat vision to life," said Bob Cline, lead director of Safeco'sboard of directors.

Mr. Cline said Ms. Reynolds had demonstrated qualities ofteamwork, diversity and vision in her community and businessactivities outside of work.

"With her proven CEO experience and impressive leadershipskills, the board believes Paula is the right person to build onSafeco's strong financial and operational foundation and lead thecompany forward," said Mr. Cline.

In her five years as AGL Resources CEO the company expanded froma regional gas utility to a multi-state, integrated energy company.The company also doubled share price and market capitalization, andincreased its dividend by 37 percent.

Ms. Reynolds said she is enthused by an opportunity "to leadSafeco to the next level of success == creating a sustainablecompetitive advantage and long-term value."

She said the company has demonstrated "it has the talent and thedetermination. Rather than a sprint, we're now in the race for thelong run. We intend to deliver excellent performance year afteryear. I look forward to being at the forefront of thatchallenge."

Ms. Reynolds is on the boards of Coca-Cola Enterprises, DeltaAir Lines; and the United Way of Metropolitan Atlanta.

Mr. McGavick will step down as CEO and chairman of the board onDec. 31. He will provide transition services for two months as aSafeco employee, the company said.

The insurer said its board selected Ms. Reynolds through acomprehensive search process working with Russell ReynoldsAssociates, a global search firm.

Ms. Reynolds and her family will relocate to Seattle, where herhusband, Stephen P. Reynolds is chairman, president and CEO ofPuget Energy.

Safeco also announced its board's election of Joseph W. "Jay"Brown as its non-executive chairman effective Jan. 1, 2006,replacing McGavick. Brown, 56, has been a Safeco director since2001.

Mr. Brown is chairman of MBIA, Inc., a financial servicescompany based in Armonk, N.Y. Before joining MBIA in 1999, Brownwas chairman, president and CEO of Talegen Holdings, Inc., theformer insurance holdings operation of Xerox Corp., and presidentand CEO of Fireman's Fund Insurance Company.

"Jay has led property and casualty insurers, he knows Safeco andunderstands the nuances of the business strategy. He will be agreat partner to Paula in the governance of the company," said Mr.Cline.

When Mr. Brown assumes the chairmanship in January, Cline willstep down as lead director.

The company said Ms. Reynolds and Mr. Brown will conduct aconference call with financial analysts tomorrow.

Safeco sells insurance to drivers, home owners and owners ofsmall- and mid-sized businesses.