USAA

From Wikipedia, the free encyclopedia
Jump to navigation Jump to search
United Services Automobile Association
Native name
United Services Automobile Association
TypePrivate. Reciprocal inter-insurance exchange
Industry
FoundedJune 20, 1922; 98 years ago (1922-06-20)
HeadquartersSan Antonio, Texas
United States
Number of locations
4 financial centers [1]
Area served
Worldwide
Key people
Products
RevenueIncreaseUS$35.617 billion (2019)[2]
Increase$4.006 billion (2019)[2]
AUMIncrease$128 billion (2015)[3]
Total assetsIncrease $200 billion (2020)[4]
Total equityIncrease $35.327 billion (2019)[2]
MembersIncrease 12.4 million (2017)[2]
Number of employees
Increase 32,896 (2017)[5]
Capital ratio13.27%
RatingA.M. Best Company A++ (Superior, highest of 16 possible ratings)

Moody's Investors Service Aaa (Exceptional, highest of 21 possible ratings)

Standard & Poor's AA+ (Very Strong, second highest of 21 possible ratings)
Websitewww.usaa.com

The United Services Automobile Association (USAA) is a San Antonio-based Fortune 500 diversified financial services group of companies including a Texas Department of Insurance-regulated reciprocal inter-insurance exchange and subsidiaries offering banking, investing, and insurance to people and families who serve, or served, in the United States Armed Forces.[6][7][8] At the end of 2017, it had 12.4 million members.[9]

USAA was founded in 1922 in San Antonio by a group of 25 U.S. Army officers as a mechanism for mutual self-insurance when they were unable to secure auto insurance because of the perception that they, as military officers, were a high-risk group.[10][11] USAA has since expanded to offer banking and insurance services to past and present members of the Armed Forces, officers and enlisted, and their families. The company ranked No. 100 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.[12]

History[edit]

The organization was originally called the United States Army Automobile Association. In 1924, the name was changed to United Services Automobile Association, when commissioned officers of other U.S. military services became eligible for membership. The company was formed based on a meeting of twenty-five United States Army Officers on June 20, 1922, at the Gunter Hotel in San Antonio, Texas, to discuss the procurement of reliable and economical auto insurance.

USAA is headquartered in northwest San Antonio, occupying a 286-acre (116 ha) former horse farm.[13][14]

USAA is a pioneer of the concept of direct marketing; most of its business is conducted over the Internet or telephone using employees instead of agents. Until the 1960s the bulk of its business was conducted via mail. In the late 1960s, USAA began a transition from mail to phone-based sales and service. It launched a toll-free number in 1978, and Internet sales and service in 1999 via its website.[citation needed]

The organization started offering homeowner's and life insurance in the 1960s, and brokerage and investment management services in the 1970s, and banking services in the 1980s.[citation needed]

The company opened its first office outside Texas in Frankfurt, West Germany in 1952, followed by the opening of the London office in 1962.

USAA offered restricted membership to civilians between September 2009 and August 2013. This membership provided access to USAA's investment products, most bank deposit products, and life insurance. Auto and property insurance policies were not included for non-military members due to eligibility restrictions.[15]

In 2015, USAA employed more than 32,000 people at its offices throughout the world.[16]

On July 26, 2019, the Charles Schwab Corporation announced it would acquire USAA's investment and brokerage accounts for $1.8 billion.[17] The deal with Charles Schwab closed on May 26, 2020.[18]

Lines of business[edit]

Property, casualty, and life insurance[edit]

USAA offers a range of personal property and casualty (P&C) insurance, including automobile insurance, homeowner insurance, renters' insurance, as well as umbrella and 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 from most offerings since they do not include a war-exclusion clause.[19]

Banking[edit]

Banking services are provided by USAA Federal Savings Bank. The bank was established on December 30, 1983. According to USAA's 2015 Annual Report to Members, USAA held over $62.549 billion in deposits with more than 6.3 million accounts.[citation needed]

USAA Federal Savings Bank's bank lobby located in San Antonio is its only full-service banking location. Other cities, however, hold financial centers, often near military bases, which provide advice and assistance in obtaining services of any kind offered by USAA, in addition to opening those accounts online.

Banking services can be accessed in person, by mail, by phone, or through the internet. USAA Federal Savings Bank provides members with the ability to deposit checks to their accounts using mobile applications on the Apple iPhone and iPad, mobile devices with Google's Android operating system, and Microsoft's Windows Phone.[20]

As of August 2019, the USAA Mobile App is used for messaging rather than text messaging.

Major banking competitors include Bank of America-Military Bank, Pentagon Federal Credit Union, and Navy Federal Credit Union.[21]

Investing and financial planning[edit]

USAA provides Education 529 Plans for its members, but members are referred to its strategic partners, Charles Schwab Corporation and Victory Capital Management for other investment services such as brokerage and trading, mutual funds & ETFs.[22][23][24]

Target market[edit]

USAA's mission statement indicates its focus to serve its niche market, which consists of members of the U.S. military and their immediate families. To that end, the association has 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, Officer candidates in commissioning programs (Academy, ROTC, OCS/OTS) and all those who have served in the aforementioned categories and who have retired or have been discharged honorably.[25][26] 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).

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. In 2008, USAA expanded membership eligibility to all military personnel and retirees, and all veterans who separated after 1996.[25] In November 2009, USAA expanded eligibility requirements to offer coverage to anyone who has ever served honorably in the US Military.[26]

Leadership[edit]

USAA president and CEO Stuart Parker retired on February 1, 2020, and USAA chose a replacement from within: Wayne Peacock, the company's president of property and casualty insurance. Wayne Peacock is currently the CEO of USAA.

Led by USAA Chairman of the Board Admiral Thomas B. Fargo, USN (Ret.), USAA's board of directors named Wayne Peacock CEO-elect in January 2020 to succeed former CEO Stuart Parker after his retirement in February 2020. Peacock became CEO in February 2020 and is the first USAA CEO who is not veteran of the armed forces.[27] He has been with USAA since 1988, serving in various leadership positions including President of the Property and Casualty Insurance Group.[citation needed]

USAA former CEOs include retired Air Force brigadier general Robert F. McDermott. The USAA office building in San Antonio was constructed under his tenure, and McDermott was behind USAA's shift from service-by-mail to service-by-phone.[28] He was succeeded as CEO by retired Air Force General Robert T. Herres.[29] It was under Herres that USAA expanded its services to enlisted members of the military and developed Internet based financial services.[30] Following General Herres as CEO was Robert G. Davis, a former Army officer who came to USAA with experience in a variety of financial services companies. Davis is said to have changed the culture at USAA; during his time at USAA, membership, assets and net worth grew significantly.[31]

His tenure, however, was not without controversy. Davis oversaw USAA's first layoffs and by some reports had a confrontational style of leadership. Davis had indicated to USAA employees that he intended to continue to lead USAA until 2010; however, he retired in December 2007.[32] The nature of his retirement seems to have been precipitous, as USAA CEO Josue Robles has stated that upon assuming the role of CEO, "I thought I was just going to be a temporary CEO and (the board) said, 'Guess what? The permanent CEO is you'."[33]

Locations[edit]

USAA's Colorado Springs location

Besides its headquarters in San Antonio, USAA has a second major office in Phoenix. USAA also has offices in Chesapeake, Virginia; Colorado Springs, Colorado; Highland Falls, New York; Plano, Texas; and Tampa, Florida. Internationally, USAA has offices in London and Frankfurt.[34][35][36][37][38]

On May 27, 2021 USAA announced that it will be adding an additional 750 employees to its 100 employee base in Charlotte, North Carolina. The company will be leasing 90,000 square feet of space in a new building in South End called The Square. Company employees will start moving in at the end of 2021.[39]

See also[edit]

References[edit]

  1. ^ "Our Financial Centers". USAA. Archived from the original on 2015-03-19. Retrieved 2013-09-17.
  2. ^ a b c d "2019 USAA Report to Members" (PDF). USAA (PDF). Retrieved 2020-04-23. Check |archive-url= value (help)
  3. ^ "2015 USAA Report to Members". USAA. Archived from the original on 2016-06-03. Retrieved 2016-05-06.
  4. ^ "Holding Companies with Assets Greater Than $10 Billion". Federal Financial Institutions Examination Council. 31 March 2020.
  5. ^ "2017 Fortune Best Places to Work". Fortune. Archived from the original on 2018-04-23. Retrieved 2018-04-23.
  6. ^ "Fortune 500 2010: Fortune 500 Companies 101-200". CNN. Archived from the original on 2011-02-11. Retrieved 2011-01-25.
  7. ^ "Operating Companies". USAA. Archived from the original on 2012-05-16. Retrieved 2012-06-21.
  8. ^ "dtSearch Engine Unable to Process Request". www.tdi.texas.gov. Retrieved 2016-05-06.[permanent dead link]
  9. ^ "2017 USAA Report to Members" (PDF). USAA. Archived (PDF) from the original on 2018-04-24. Retrieved 2018-04-23.
  10. ^ "Corporate Overview". USAA. Archived from the original on 2018-07-14. Retrieved July 22, 2017.
  11. ^ Spechler, Jay W. (1996). Reasonable Accommodation: Profitable Compliance With the Americans With Disabilities Act. Delray Beach, Fla: St. Lucie Press. p. 229. ISBN 978-1884015946.
  12. ^ "Fortune 500 Companies 2018: Who Made the List". Fortune. Retrieved 2018-11-10.[dead link]
  13. ^ Jefferson, Greg. "Speaker-to-be has deep Republican roots". San Antonio Express-News. Archived from the original on July 1, 2010.
  14. ^ Chordas, Lori (November 1, 2002). "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". Goliath Business News. Archived from the original on 2011-06-15. Retrieved 2008-02-08.
  15. ^ "USAA Membership: USAA Now Open To Non-Military Folk!". Budgets Are Sexy!. 2017-12-06. Archived from the original on 2014-09-12. Retrieved 2020-09-10.
  16. ^ "USAA 2015 Report to Members". USAA. Archived from the original on 2016-04-20. Retrieved 2016-05-03.
  17. ^ Cullen, Terri (2019-07-26). "Charles Schwab to buy USAA assets in $1.8 billion deal". CNBC. Retrieved 2019-11-25.
  18. ^ Santana, Steven (2020-05-26). "Schwab completes purchase of USAA Investment Management". San Antonio Business Journal. Retrieved 2020-09-03.
  19. ^ "War Exclusion Clause Definition". Investopedia. Archived from the original on 2015-10-02. Retrieved 2015-10-01.
  20. ^ "USAA Bank Will Let Customers Deposit Checks by iPhone". The New York Times. 2009-08-09. Archived from the original on 2017-10-05. Retrieved 2009-08-25.
  21. ^ Boyd, Terry (2005-05-23). "Choosing the right ATM in Germany a high-stakes decision". Stars and Stripes. Retrieved 2020-09-10.
  22. ^ "Products: Investments". USAA. Retrieved 2020-09-10.
  23. ^ "Victory Capital Completes Acquisition of USAA® Asset Management Company" (Press release). USAA. 2019-07-01. Retrieved 2020-06-12 – via GlobeNewswire.
  24. ^ Southall, Brooke (2019-07-16). "Victory Capital squeezes costs out of USAA mutual funds following acquisition, but Schwab may walk off with brokerage, wealth manager in purported $2B deal". RIABiz. Retrieved 2020-09-10.
  25. ^ a b "USAA expands Military customer base". Phoenix Business Journal. 2009-11-05. Retrieved 2020-09-10.
  26. ^ a b ""Page on Expanded Eligility". USAA. Archived from the original on 2012-04-18. Retrieved 2009-11-05.
  27. ^ "Board of Directors". USAA. Retrieved 2020-09-10.
  28. ^ "Former USAA CEO McDermott dies at 86". San Antonio Business Journal. 2006-08-28. Archived from the original on 2006-09-04. Retrieved 2020-09-10.
  29. ^ "Former USAA CEO Bob Herres passes away". San Antonio Business Journal. 2008-07-25. Retrieved 2020-09-10.
  30. ^ Hendricks, David (2008-07-25). "Herres took action to strengthen USAA". San Antonio Express-News.[dead link]
  31. ^ "USAA CEO Robert G. Davis Named Chairman-Elect". Collision Repair Industry Insight. 2000-12-14. Retrieved 2008-12-25.
  32. ^ Poling, Travis E.; Greg Jefferson (2007-12-16). "For better or worse, Davis shook USAA up". San Antonio Express-News.[dead link]
  33. ^ Poling, Travis E. (2008-06-22). "USAA's Robles has 'military heart, business mind'". San Antonio Express-News. Archived from the original on 2010-11-20. Retrieved 2008-12-25.
  34. ^ "Corporate Offices". USAA. Archived from the original on 2017-08-27. Retrieved 2017-03-15.
  35. ^ "USAA to expand Plano IT operations, create 680 jobs". Dallas Business Journal. Archived from the original on 2015-01-06. Retrieved 2016-04-02.
  36. ^ Youn, Soo (2019-01-03). "USAA, a traditional safeguard for military families, is under fire for denying loans to Coast Guard clients during the government shutdown". ABC News. Retrieved 2019-01-07.
  37. ^ Howe, Elizabeth (2019-01-04). "USAA denying loans and charging interest to Coast Guard families". Connecting Vets. Retrieved 2020-09-10.
  38. ^ "USAA Donates $15 Million to Coast Guard Mutual Assistance in Support of Coast Guard Families in Need" (Press release). USAA. 2019-01-15. Retrieved 2020-09-10 – via PRNewswire.
  39. ^ Fahey, Ashley (27 May 2021). "USAA confirms Charlotte office, will lease six floors at South End building". Charlotte Business Journal. Retrieved 28 May 2021.

External links[edit]