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United Services Automobile Association
Native name
United Services Automobile Association
FoundedJune 20, 1922; 97 years ago (1922-06-20)
HeadquartersSan Antonio, Texas
United States
Number of locations
4 financial centers [1]
Area served
Key people
RevenueIncreaseUS$30.016 billion (2017)[2]
Increase$2.422 billion (2017)[2]
AUMIncrease$128 billion (2015)[3]
Total assetsIncrease $155.391 billion (2017)[2]
Total equityIncrease $30.6 billion (2017)[2]
MembersIncrease 12.4 million (2017)[2]
Number of employees
Increase 32,896 (2017)[4]
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)

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.[5][6][7] At the end of 2017, there were 12.4 million members.[2]

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.[8][9] 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.[10]


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 opened offices in Frankfurt, Germany, and London, England, early in its history. The company was formed based on a meeting of twenty-five United States Army Officers on June 20, 1922, at the Gunter Hotel to discuss the procurement of reliable and economical auto insurance.

USAA is headquartered in northwest San Antonio, Texas, occupying 286 acres (116 ha) (a former horse farm).[11][12]

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. A toll-free number was launched in 1978, and Internet sales and service were launched 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]

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.[13]

In 2012, USAA and software company Mitek settled a more than 2 year dispute over alleged mobile-imaging technology patent violations.[14]

On July 26, 2019, the Charles Schwab Corporation announced it would acquire USAA's investment and brokerage accounts for $1.8 billion.[15]

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.[16]


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.[17]

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.[18]

Investing and financial planning[edit]

USAA provides brokerage services and no-load mutual funds. Mutual funds established by other companies and can be purchased as well as held by USAA investment accounts (or IMCO).

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.[19][20] 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; however, the site does not contain a comprehensive statement of eligibility.[21] USAA has, in the past, published a list of other eligible persons including special agents of the FBI and Secret Service, agents of the various military investigative services (NCIS, OSI, CI and CID), U.S. Foreign Service Officers, and officers from a variety of other smaller agencies.[22] 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.[23]

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.[19] In November 2009, USAA expanded eligibility requirements to offer coverage to anyone who has ever served honorably in the US Military.[20]

Auto and property insurance and some banking services require that the customer meet membership eligibility criteria. USAA investment products[24] as well as deposit-only banking services[25] are available to non-members.[26]

Legal structure[edit]

One of the characteristics that allows USAA to operate differently than most other Fortune 500 companies is that it is not a corporation. The United Services Automobile Association is an inter-insurance exchange, the establishment of which is provided for under the Texas Insurance Code.[27] 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.

Normally, in the event of a catastrophe threatening the solvency of the exchange, each member could be held completely responsible for all the losses of all the other members. However, the Texas Insurance Code added a provision (Section 942.152) which stipulates that an inter-insurance exchange can, by agreement of the subscribers, limit member liability only to the premiums or premium deposits that the subscribers have paid to USAA.[28]

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). 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.[29] It is uncommon for a U.S.-based insurance company to provide international P&C coverage, but USAA does so because so many military families are stationed out-of-country.

Returning profits to the insured[edit]

Since there are no shareholders, profits are retained for financial strength or returned to the members. Returns are accomplished through a Subscriber's Account, commonly known as a distribution. Each year a portion of USAA's profit is retained as "unassigned," the rest is allocated to each member's Subscriber's Account using a formula based on the amount of premium the member paid that year as well as the member's Subscriber's Account balance. The allocation of capital to a member's Subscriber's Account occurs early in the calendar year. Late in the calendar year a portion of the member's Subscriber's Account 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 Subscriber's Account balance. The entirety of the Subscriber's Account belongs to the member, but is not completely distributed until approximately 6 months after the member no longer has a USAA P&C policy.[30] In 2015, USAA returned $1.666 billion to its members.[31]

Those not eligible to join USAA but who are eligible to purchase insurance from USAA's subsidiaries, such as USAA CIC, may receive dividends as declared by USAA.[32]


Led by USAA Chairman of the Board Admiral Tom Ford, 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 not to be a veteran of the armed forces. He has been with USAA since 1988, serving in various leadership positions including President of the Property and Casualty Insurance Group.

USAA experienced much growth under its former CEO, retired Air Force brigadier general Robert F. McDermott. The USAA building was constructed under his tenure, and McDermott was behind USAA's shift from service-by-mail to service-by-phone.[33] He was succeeded as CEO by retired Air Force General Robert Herres.[34] It was under Herres that USAA expanded its services to enlisted members of the military and developed Internet based financial services.[35] Following General Herres as CEO was Robert G. Davis, a former Army officer[36] 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.

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.[37] 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'."[38]

On, claims adjusters reported satisfaction at 3.5 on a scale of 1–5.[39]

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

Miscellaneous information[edit]

USAA employs more than 32,000 people at its offices throughout the world.[40]

USAA's Colorado Springs location

Besides its headquarters in San Antonio, USAA has a second major office in Phoenix, Arizona, and other operations in Colorado Springs, Colorado; Chesapeake, Virginia; Tampa, Florida; Highland Falls, New York; London, England; Frankfurt, Germany;[41] and Plano, Texas.[42][43] [44][45]


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  16. ^ "Investopedia, War Exclusion Clause Definition". Archived from the original on 2015-10-02. Retrieved 2015-10-01.
  17. ^ USAA Bank Will Let Customers Deposit Checks by iPhone, New York Times, August 9, 2009 Archived 2017-10-05 at the Wayback Machine retrieved August 25, 2009
  18. ^ Choosing the right ATM in Germany a high-stakes decision, Stars and Stripes, March 23, 2005 retrieved September 24, 2008
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  23. ^ Archived June 6, 2012, at the Wayback Machine
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  28. ^ "INSURANCE CODE CHAPTER 942. RECIPROCAL AND INTERINSURANCE EXCHANGES". Archived from the original on 2017-06-16. Retrieved 2017-05-12.
  29. ^ "Archived copy". Archived from the original on 2017-08-23. Retrieved 2017-09-17.CS1 maint: archived copy as title (link) CS1 maint: BOT: original-url status unknown (link)
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External links[edit]