company_name = United Services Automobile Association
company_type = Reciprocal
foundation = 1922
San Antonio, Texas, USA
key_people = John H. Moellering,
Josue Robles, Jr,
President and Chief Executive Officer
EVP, Enterprise Business Operations
Chief Financial Officer
EVP, Corporate Communications
General Counsel & Corp. Secretary
EVP, People Services
President, Financial Services Group
President, Property & Casualty Group
F. David Bohne,
President, Federal Savings Bank | num_employees = ~22,700 (Dec 31, 2007)" [https://content.usaa.com/mcontent/static_assets/Media/USAA_Report07.pdf USAA 2007 Report to Members] ." Retrieved on
July 31, 2008.]
revenue = profitUSD 14.418 billion (2007)
net_income = profitUSD 1.855 billion(2007)
assets = USD 67.177 billion
equity = USD 14.367 billion
slogan = We know what it means to serve
Insurance, Banking, Investing
homepage = [http://www.usaa.com/ USAA.COM]
United Services Automobile Association (USAA) is a
Fortune 500financial services company focused on providing banking, investing, and insurance to people and families that serve, or served, in the United States military and other selected federal agencies.
USAA was founded in 1922 by a group of U.S. Army officers to self-insure each other when they were unable to secure auto insurance due to the perception that they were a high-risk group. cite book |last=Spechler |first=Jay W. |year=1996 |title=Reasonable Accommodation: Profitable Compliance With the Americans With Disabilities Act , p. 229.] USAA has since expanded to serve officers, NCOs, enlisted, and their families with a full range of
property & casualty insurance, banking, life insurance, investmentand financial planningproducts and services.
USAA does not sell or provide service for its insurance and other products through agents. Instead the company was one of the pioneers of
direct marketingand most of its business is conducted over the Internet or telephone. A toll-free number was launched in 1978, and Internet support launched in 1999 via "USAA.COM".
The organization was originally called the United States Army Automobile Association. In 1924, the name was changed to United Services Automobile Association, when members of other military services became eligible for membership. The company opened offices in Frankfurt,
Germanyand London, England, early in its history.
USAA is headquartered in San Antonio,
Texas, occupying 286 acres (a former horse farm) with one of the largest single-occupancy buildings in the United States, rivaling the Sears Towerand The Pentagon.citation |title=The ultimate niche: USAA's commitment to serving only people connected to the military, and its unusual structure and sales strategy, set it apart from the rest of the insurance industry. |date= November 1, 2002|periodical= Goliath Business News|url=http://goliath.ecnext.com/coms2/summary_0199-2199998_ITM |last=Chordas |first=Lori |accessdate=2008-02-08 ]
In 1996, eligibility was extended to enlisted personnel. [ [http://www.gijobs.net/documents/USAA_Company_Fact_Sheet.pdf USAA fact sheet] retrieved April 16, 2008]
Lines of business
Property, casualty, and life insurance
USAA offers a wide range of
personal property and casualty(P&C) insurance including automobile insurance, homeowner insurance, renters insurance, and valuable personal property insurance.
In addition to P&C insurance, USAA provides
whole life insurance, term life insurance, and annuities. USAA's life insurance policies, while not completely unique in the industry, are different than most offerings since they do not include a war-exclusion clause [ [http://www.answers.com/topic/war-exclusion-clause?cat=biz-fin Answers.com] ] (also known as a "war clause").
Bankingservices and credit cardsare provided by the USAA Federal Savings Bank. The bank was established on December 30, 1983. According to the FDIC, as of March 2008, the bank held over $28 billion in deposits with more than 3.6 million accounts. [ [http://www4.fdic.gov/IDASP/index.asp FDIC Bank information search results for USAA, retrieved August 15, 2008] ]
The bank has only one physical location in
San Antonio, Texas. Services can be accessed in person, by mail, by phone, or through the internet. The bank provides the ability to deposit checks from home ( remote deposit), [ [https://www.usaa.com/inet/ent_utils/McStaticPages?key=bank_deposit USAA,com secure site] ] ATM fee rebates, free standard checks for the life of the account, free online bill pay, and bank-by-mail services. USAA was one of the few major banks to begin offering American Expresscards in 2006 in addition to their traditional offering of Mastercard. [ [http://home3.americanexpress.com/corp/pc/2005/usaa.asp American Express.com] ]
Investing and financial planning
USAA provides a limited discount brokerage service and a family of no-load
mutual funds. Mutual funds established by other companies can also be purchased and held in USAA investing accounts. USAA also offers limited free Financial Planning advice, as well as a more thorough flat-fee or hourly-rate financial planning service.
USAA offers a mail-order catalog service which, among other things, is known for diamonds and jewelry. It has also made arrangements with other companies to provide discounts to USAA members on rental cars (
Avis, Hertz, Budget), flower delivery (TeleFlora), cruises, ADT home security , and FedExservices. For its own investment purposes, USAA operates a real estate company [http://realco.usaa.com/] which has holdings including major office buildings, industrial buildings, hotels, and other properties throughout the country.
USAA's mission statement indicates its focus is to serve its
niche market, which consists of members of the U.S. military and their families. To that end, they have always marketed directly to members of the U.S. military. USAA membership is offered to officers and enlisted personnel, including those on active duty, those in the National Guard and Reserve, and those who have retired, regardless of retirement date. All honorably discharged veterans who have separated since 1996 are also eligible" [http://www.armytimes.com/news/2008/08/military_usaamembership_080908w/ USAA expanding its membership base, Army Times, Retrieved Aug 10, 2008"] . Children of USAA members are also eligible to purchase USAA's P&C insurance products, and former members of USAA are allowed to resume membership at any time (without an age limit).
Eligibility can be determined using its website [ [http://www.usaa.com usaa.com] ] ; however, the site does not contain a comprehensive statement of eligibility. USAA has, in the past, published a list [ [http://web.archive.org/web/19991013091301/usaa.com/cp_eligibility.asp Eligibility] ] of other eligible persons including special agents of the
FBIand Secret Service, agents of the various military investigative services (NCIS, OSI, and CID), U.S. Foreign ServiceOfficers, and officers from a variety of other smaller agencies. Recently, USAA has been sharpening its focus on members of the military. So, people working for certain non-military agencies that were accommodated in the past may find that they are no longer eligible. [ [http://www.afsa.org/USAID/USAA/USAAissues.cfm Afsa.org] ]
Historically, only U.S. military officers (among certain other federally sworn officers) were eligible to join USAA, with descendants of USAA members able to purchase insurance from USAA-CIC. It did not matter if one was an active duty or retired officer; one could join at any time. In 1973, membership was opened to members of the National Guard and Reserves, and in 1996, eligibility was expanded to enlisted members of the armed services. As the number of persons who have served on active duty in an enlisted status in the U.S. Armed Forces is quite large, USAA chose to limit the establishment of eligibility to those who were currently on active duty or who had recently separated. The same time limit on establishment of eligibility was then applied to military officers. As USAA's capacity for taking on new members expanded, eligibility criteria relaxed. Membership eligibility is now available to all military personnel and retirees, and all veterans who separated after 1996.
While most USAA services require that the customer meet membership eligibility criteria, USAA investment and life insurance products are available to non-members. [ [http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080804005287&newsLang=en BusinessWire Press Release] ]
One of the characteristics that allows USAA to operate differently than almost every other
Fortune 500company is that it is not a corporation. The parent company, United Services Automobile Association is an inter-insurance exchange, the establishment of which is provided for under the Texas Insurance Code [http://tlo2.tlc.state.tx.us/statutes/docs/IN/content/word/in.006.00.000942.00.doc] . This insurance exchange is made up of current and former military officers and NCOs who have taken out P&C policies with USAA; thus they simultaneously are insured by each other and, as a group, own USAA's assets. Theoretically, this implies that each member could be held completely responsible for all the losses of all the other members. However, the insurance code (Sec 942.142) stipulates that should an entity such as USAA accrue a substantial amount of assets, member liability is limited only to the premiums they have paid to USAA. In other words, if an enormous disaster were to result in claims that would wipe out all the assets of USAA, individual members could not legally be called upon to pay for any amount USAA is unable to pay out in claims.
Other insurance services are provided by a variety of wholly-owned subsidiaries. Adult children of USAA members and U.S. military junior enlisted personnel make up a group known at USAA as "associate members" insured through a subsidiary called USAA-Casualty Insurance Company (USAA-CIC). USAA-CIC is not an insurance exchange but rather a Delaware Insurance Corporation. This is a subtle nuance but is important concerning the return of profits - described below. Non-standard-risk drivers are insured by subsidiaries like USAA's County Mutual Insurance Company or USAA-General Indemnity Company. USAA also insures members in Europe through its subsidiary, USAA Limited. Providing international P&C coverage is uncommon for U.S. based insurance companies, but is provided because so many military families are stationed out-of-country.
Returning profits to the insured
Since there are no shareholders, profits are retained for financial strength or returned to the members. Returns are accomplished through a Subscriber's Savings Account, or SSA. Each year a portion of USAA's profit is retained as "unassigned," the rest is allocated to each member's SSA using a formula based on the amount of premium the member paid that year as well as the member's SSA balance. The allocation of capital to a member's SSA account occurs early in the calendar year. Late in the calendar year a portion of the member's SSA is distributed to the member via checks or electronic funds transfer. Members with more than 40 years of membership also receive a special yearly "senior bonus" distribution which amounts to 10% of the member's SSA balance. The entirety of the SSA belongs to the member, but is only completely distributed until approximately 6 months after the member no longer has a USAA P&C policy [USAA Subscriber Savings Account Brochure, January, 2008] . In 2007 the distribution amounted to 4% of the member's SSA balance.
Associate members sometimes receive policy dividends instead of distributions of profits, since they are not members of the insurance exchange.
The stated mission of USAA is to facilitate the financial security of its members, associates and their families through provision of a full range of highly competitive financial products and services. In so doing, USAA seeks to be the provider of choice for the military community. [ [https://www.usaa.com/inet/ent_utils/McStaticPages?key=about_usaa_main&wa_ref=pub_subglobal_footer_about_usaa_page About USAA] ]
USAA has offices at its headquarters in
San Antonio, TX, a second major office in Phoenix, AZ, as well as other smaller operations in Sacramento, CA, Colorado Springs, CO, Tampa, FL, Norfolk, VA, Highland Falls, NY, London, Englandand Frankfurt, Germany[ [http://www.usaa.apply2jobs.com/locations.htm List of USAA locations from their employment site] ] .
USAA experienced much of its growth under former CEO, retired Air Force
Brigadier General Robert F. McDermott. The USAA building was constructed under his tenure and McDermott was also the driving force behind USAA's shift from service-by-mail to service-by-phone [ [http://sanantonio.bizjournals.com/sanantonio/stories/2006/08/28/daily5.html Former USAA CEO McDermott dies at 86, San Antonio Business Journal, August 28, 2006, retrieved September 18, 2008] ] . He was succeeded as CEO by retired Air Force General Robert T. Herres[ [http://www.mysanantonio.com/obituaries/Former_USAA_Chairman_Herres_dies.html Herres, former CEO of USAA and space program leader, dies at 75, San Antonio Express-News, July 25, 2008, retrieved Sept 18, 2008] ] . It was under the leadership of Herres that USAA expanded its services to enlisted members of the military and ventured into Internetbased financial services [ [http://www.mysanantonio.com/business/columnists/David_Hendricks_Herres_took_action_to_strengthen_USAA.html Hendricks, David; "Herres took action to strengthen USAA", San Antonio Express-News, July 25, 2008, retrieved Sept 18, 2008] ] .
USAA has more than 6 million members including those doing business with any of its subsidiaries who are eligible to purchase P&C insurance, whether or not they are actually holding a P&C policy. As of 2007 USAA had more than $125 billion in assets under management. Its revenues placed it as number 176 on the 2008 Fortune 500 list. [ [http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/3160.html USAA 2008 Fortune 500 entry] ]
Since it is not a publicly traded corporation, USAA is not bound by the same corporate governance rules as publicly traded companies. Even so, USAA is subject to insurance regulation and examination by all 50 states as well as federal entities like the SEC, FTC, and FDIC. In addition, its records are audited by
Ernst & Youngas well as the major financial rating agencies.
A. M. BestCompany: A++ (Superior)
Moody'sInvestor Service: AAA (Exceptional)
Standard and Poor's: AAA (Extremely Strong)
USAA has consistently received the highest customer service ratings available to all financial services companies, including those not in its niche. For its highly-rated customer service, in 2002 JD Power awarded USAA with its Chairman's Award [ [http://sanantonio.bizjournals.com/sanantonio/stories/2002/06/17/daily31.html "USAA Receives Chairman's Award", San Antonio Business Journal, Retrieved on 15 Sept 2008] ] , which at that time had been awarded to ten companies, none of them in the financial services arena. Since then, USAA has remained at the top of the
JD Powerratings for auto insurance [http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008135 JD Power 2008 National Auto Insurance Study] ] [http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2007004 JD Power 2007 Collision Repair Satisfaction Study] ] [http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008084 JD Power 2008 Insurance New Buyer Study] ] , home insurance [http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2007243 JD Power 2007 National Homeowners Insurance Study] ] , mortgages [http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008144 JD Power 2008 Primary Mortgage Servicer Study] ] , and home equity loans [http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2007236 JD Power 2007 Home Equity Line/Loan Servicer Study] ] .
March 5, 2007issue, BusinessWeek[ [http://www.businessweek.com/magazine/content/07_10/b4024003.htm?chan=rss_topDiscussed_ssi_5 Business Week] ] ranked USAA first in their list [ [http://bwnt.businessweek.com/interactive_reports/customer_satisfaction/index.asp Business Week] ] of "Customer Service Champs", a list of 25 national businesses which included the likes of Four Seasons Hotels, Lexusand Starbucks. USAA repeated as first on BusinessWeek's list in their March 3, 2008issue. [ [http://www.businessweek.com/magazine/content/08_09/b4073048442931.htm?chan=search Business Week] ]
A 2007 Forrester Research report referenced in the San Antonio Express-News on
June 27, 2007, [ [http://www.mysanantonio.com/business/stories/MYSA062807.03E.usaa0628.2b34a2f.html San Antonio Express-News] ] identified USAA as the leader in customer advocacy based on a customer survey. Eighty-eight percent of the USAA customers surveyed said "My financial provider does what's best for me, not just its own bottom line." No other company evaluated scored higher than 78%. USAA retained the top spot on Forrester Research's study in 2008. [ [http://www.forrester.com/ER/Press/Release/0,1769,1214,00.html 2008 Forrester Research Press Release] ] .
USAA employs more than 22,700 personnel at its offices throughout the country. It has been recognized for many years as one of the 50 best corporations for career advancement for Latinas in the US [ [http://www.hispanicprwire.com/news.php?l=in&id=12332&cha=14 Latina Style 2008 Press Release] ] [ [https://www.usaa.com/inet/ent_utils/McStaticPages?key=2008_09_Latina_Style_08 USAA press release regarding Latina Style rankings] ] . It has been recognized as a "Military Spouse-Friendly Employer" [ [http://www.military.com/military-report/top-10-spouse-friendly-employers Military.com article about Military Spouse rankings 2007] ] and has also been recognized by GI Jobs as one of America's best employers for veterans and reservists [ [http://www.victorymediainc.com/staticmedia/Top50/2007PR/GI.Jobs.Dec07.TOP.50.List.pdf GI Jobs 2007 List of Best Employers] ] .
USAA was ranked 17th on the
Computerworld100 Best Places to Work for IT Professionals in 2006 [ [http://www.computerworld.com/html/research/bestplaces/2006/bpchart_01_main.html 2006 Computerworld rankings] ] , 39th in 2007 [ [http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9024364 Computerworld 2007 rankings] ] , and 20th in 2008 [ [http://www.computerworld.com/spring/bp/2008/1 Computerworld 2008 rankings] ] . In the 2007 Computerworld rating only one company with more IT employees was ranked higher than USAA and only one Texas company with 100 IT employees was rated higher.
USAA offers a
401(k)with 8% matching plus additional performance-based employer contributions, health and dental insurance, flexible spending accounts, life insurance and disability insurance. USAA also offers tuition reimbursement, post-retirement medical benefits, on site fitness and day care centers, on site health clinics, cafeterias and food courts, on site Starbucks, a company store, an online discount employee shopping mall, on site pharmacy, free covered parking, subsidized van pools, as well as USAA membership [ [http://www.usaa.apply2jobs.com/benefits.htm USAA List of USAA employment benefits] ] . USAA also offers all employees an annual performance bonus, which in 2008 was 14.9% of every employee's annual salary [ [http://blogs.mysanantonio.com/weblogs/clockingin/2008/01/bonus_time_at_usaa_1.html San Antonio Express News blog article about USAA bonus] ] .
In focusing its efforts to serve only its niche, USAA is unique in that it is the only Fortune 500 financial services company that focuses primarily on serving members of the U.S. Military and their families.
Of the top ten automobile insurance competitors, USAA is the only provider that restricts service to members, and their families, of the United States military. [http://www.iii.org/media/facts/statsbyissue/auto/]
A major automobile insurance competitor is
GEICO[ [http://www.mysanantonio.com/business/MYSA120906_01A_buffett_3546736_html.html 2nd richest man pays call on S.A., San Antonio Express-News, Dec. 9, 2006, Retrieved Sept 18, 2008] ] , while life insurance competitors include the government's own Servicemembers' Group Life Insurance[ [http://veterans.house.gov/hearings/schedule109/jun05/6-16-05/bmcdonald.pdf USAA Testimony to U.S. House Committee, June 16, 2005] retrieved Sept 22, 2008] , AAFMAA ( Army and Air Force Mutual Aid Association), and USBA.
Major banking competitors include Bank of America-Military Bank,
Pentagon Federal Credit Union[ [http://www.stripes.com/article.asp?section=104&article=27036&archive=true Choosing the right ATM in Germany a high-stakes decision, Stars and Stripes, March 23, 2005] retrieved Sept 24, 2008] , and the Navy Federal Credit Union.
* [http://www.usaa.com/ USAA] home page
* [http://www.usaarealco.com/ USAA Real Estate Company]
* [http://www.usaaedfoundation.org/ USAA Educational Foundation] , a nonprofit organization providing consumer information
* [https://www.usaa.com/inet/ent_utils/McStaticPages?key=usaa_overview Company Overview]
* [http://tlo2.tlc.state.tx.us/statutes/docs/IN/content/word/in.006.00.000942.00.doc Texas Insurance Code Subsection on Interinsurance Exchanges]
* [http://www.vault.com/companies/company_main.jsp?co_page=10&product_id=26611 USAA Employee Surveys]
* [http://business.enotes.com/company-histories/usaa USAA history]
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