Seattle — Safeco is betting on new business from retail and wholesale discount giant Costco.

Issaquah, Wash.-based Costco and Seattle-based Safeco are offering business insurance to businesses that are Costco Wholesale Corp. members, effective May 2008. The program currently is being tested in Michigan, New Mexico and Texas.

Costco's Web site includes insurance discount information: Costco business members may receive up to a 10% discount on business insurance, including property, liability and business auto coverage, through Safeco or a Safeco subsidiary.  The company reports that it also will offer workers’ compensation coverage.

A link on the Costco Web site takes members to a Safeco Web page where the insurance may be purchased.

The move to broaden its distribution channels by chasing Costco customers comes after Safeco announced the $6.2 billion acquisition of Boston-based Liberty Mutual Group. Following the transaction, Liberty Mutual Group will become the fifth-largest U.S. property/casualty insurer based on the companies’ combined 2007 direct written premium of $26.2 billion, and the combined organization will have about 15,000 independent agencies.

In coverage reported on InsuranceNetworking.com, Mark Gorman, principal with Minneapolis-based Mark Gorman & Assoc., told INN, “This type of merger allows for leveraging of a distribution channel, and also size and scope. I can see immediate benefits for both organizations in terms of pairing technology and product innovation with a distribution focus and capability."

Sources: Costco, INN archives

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