|United Services Automobile Association|
|Type||Private. Reciprocal inter-insurance exchange|
|Founded||June 20, 1922|
|Headquarters||San Antonio, Texas|
Number of locations
|4 financial centers |
|Revenue||US$35.617 billion (2019)|
|$4.006 billion (2019)|
|AUM||$128 billion (2015)|
|Total assets||$200 billion (2020)|
|Total equity||$35.327 billion (2019)|
|Members||12.4 million (2017)|
Number of employees
|Rating||A.M. Best Company A++ (Superior, highest of 16 possible ratings)|
Moody's Investors Service Aaa (Exceptional, 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. At the end of 2017, it had 12.4 million members.
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. 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.
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 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.
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.
In 2015, USAA employed more than 32,000 people at its offices throughout the world.
Lines of business
Property, casualty, and life insurance
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.
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.
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.
As of August 2019, the USAA Mobile App is used for messaging rather than text messaging.
Investing and financial planning
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.
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. 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. In November 2009, USAA expanded eligibility requirements to offer coverage to anyone who has ever served honorably in the US Military.
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. He has been with USAA since 1988, serving in various leadership positions including President of the Property and Casualty Insurance Group.
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. He was succeeded as CEO by retired Air Force General Robert T. Herres. It was under Herres that USAA expanded its services to enlisted members of the military and developed Internet based financial services. 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.
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. 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'."
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.
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.
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