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United Services Automobile Association
Industry Financial Services
Founded 1922 (1922)
Headquarters San Antonio, Texas
United States
Number of locations
19 financial centers [1][2]
Key people
General Lester Lyles, USAF (Ret.) (Chairman)
Stuart Parker, USAF (Ret.)(CEO)
Products Insurance, Banking, Investments, Retirement, Financial Planning
Revenue IncreaseUSD 24.033 billion (2014)[3]
IncreaseUSD 3.410 billion (2014)[3]
Total assets Increase USD 130.253 billion (2014)[3]
Total equity Increase USD 26.665 billion (2014)[3]
Number of employees
26,267 (2014)[4]

The United Services Automobile Association (USAA) is a Texas-based Fortune 500[5] diversified financial services group of companies[6] including a Texas Department of Insurance regulated[7] reciprocal inter-insurance exchange and subsidiaries offering banking, investing, and insurance to people and families that serve, or served, in the United States military. At the end of 2014, there were 10.7 million members.[3]

USAA was founded in 1922 by a group of 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] USAA has since expanded to offer banking and insurance services to past and present members of the Armed Forces, officers and enlisted, and their immediate families.

The company was one of the pioneers of direct marketing and most of its business is conducted over the Internet or telephone using employees instead of agents.


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.

USAA is headquartered in San Antonio, Texas, occupying 286 acres (116 ha) (a former horse farm)[9] in a large single-occupancy office building on the city's northwest side.[10]

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.

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.

Prior to 1996, eligibility for USAA membership was limited to commissioned officers in the U.S. armed forces, cadets and midshipmen at the U.S. service academies eligible to have a personal car, cadets and midshipmen in college and university ROTC programs, college and university students in the Marine Corps PLC or Navy AVROC programs, or college graduate officer candidates/officer trainees in the OCS programs of the Army, Navy, Marine Corps and Coast Guard, or the Air Force OTS program. In 1996, eligibility was extended to enlisted personnel in the U.S. armed forces.[11]

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.[12]

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[13]


Banking services are provided by USAA Federal Savings Bank. The bank was established on December 30, 1983. According to the FDIC, as of June 2011, USAA held over $43.8 billion in deposits with more than 6.3 million accounts.[14]

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. Limited service locations (or 'financial centers') cannot process deposits or withdrawals, other than those conducted at USAA ATMs located at the financial centers; ATM, in addition to teller withdrawals and deposits may also be made at the bank lobby in San Antonio, Texas.

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 iPhone,[15] mobile devices with Google's Android operating system,[16] and Microsoft's Windows Phone.[17] Members are also able to take advantage of USAA's UPS deposit option, called Easy Deposits, where members are able to deposit personal as well as business checks via UPS directly to their accounts.

USAA also offers ATM fee rebates (up to $15/month), 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 Express cards in 2006 in addition to their traditional offering of Mastercard.[18]

Major banking competitors include Bank of America-Military Bank, Pentagon Federal Credit Union,[19] and the Navy Federal Credit Union.

Investing and financial planning[edit]

USAA provides a discount brokerage service and a family of no-load mutual funds. Mutual funds established by other companies and can be purchased as well as held by USAA investment accounts (or IMCO). USAA also offers free financial advice to members, as well as services which require agreement to pay a given fixed rate for services such as financial planning service.

Other business[edit]

Through its Alliance Services Company (ASC), USAA runs a mail-order catalog service specializing in the sale of diamonds and jewelry. In addition to the above, ASC has secured a variety of discounted services for its members. These include travel-related services obtained through rental car alliances with Avis Budget Group and Hertz Corporation, for example, as well as discounts on cruise travel. Their retail alliances incorporate others such as FTD,[20] FedEx, and ADT Security Services.[21]

For its own investment purposes, USAA operates a real estate company[22] which has holdings including major office buildings, industrial buildings, hotels, and other properties throughout the country.

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.[23][24] 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;[25] however, the site does not contain a comprehensive statement of eligibility. USAA has, in the past, published a list[26] 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. 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.[27]

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. In 2008, USAA expanded membership eligibility to all military personnel and retirees, and all veterans who separated after 1996.[23] In November 2009, USAA expanded eligibility requirements to offer coverage to anyone who has ever served honorably in the US Military.[24]

Auto and property insurance and some banking services require that the customer meet membership eligibility criteria. USAA investment products[28] as well as deposit-only banking services[29] are available to non-members.[30]

Of the top ten automobile insurance competitors, USAA is the only provider that restricts service to members of the United States military and their immediate families.[31]

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.[32] 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.[33] 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.[34]

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.[35]

Miscellaneous information[edit]

USAA's Colorado Springs location

Besides its headquarters in San Antonio, USAA has a second major office in Phoenix, AZ, and other operations in Colorado Springs, CO; Norfolk, VA; Tampa, FL; Highland Falls, NY; London, England and Frankfurt, Germany.[36]

The company also operates Financial Centers in Annapolis, MD; Arlington, VA; Clarksville, TN; Colorado Springs, CO; Columbus, GA; El Paso, TX; Fayetteville, NC; Highland Falls, NY; Jacksonville, NC; Junction City, KS; Killeen, TX; Oceanside, CA; San Antonio, TX; San Diego, CA; Virginia Beach, VA and Washington, D.C..[37]


USAA Chairman of the Board Gen. Lester Lyles, USAF (Ret.), announced on Aug. 28, 2014 that USAA’s Chief Operating Officer Stuart Parker has been named to succeed current CEO Joe Robles when he retires at the end of February 2015. USAA Capital Corporation President Carl Liebert will succeed Parker in the role of chief operating officer, effective immediately. Parker is a former USAF officer. He has been with USAA for 16 years, serving in various positions, most recently as COO and CFO. Liebert is a former U.S. Navy officer, and joined the USAA management team in 2013.[38]

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.[39] He was succeeded as CEO by retired Air Force General Robert Herres.[40] It was under Herres that USAA expanded its services to enlisted members of the military and developed Internet based financial services.[41] Following General Herres as CEO was Robert G. Davis, a former Army officer[42] 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.[43] The nature of his retirement seems to have been precipitous, as current 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'."[44]


USAA is subject to insurance regulation and examination by state regulators as well as federal entities like the U.S. Securities and Exchange Commission,[clarification needed] Federal Trade Commission and FDIC. Its records are audited by Ernst & Young as well as the major financial rating agencies, who rate both USAA and many of its subsidiaries.[citation needed]

Service ratings[edit]

USAA has consistently received the highest customer service ratings available to 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, which at that time had been awarded to ten companies, none of them in the financial services arena.[45]

A 2007 Forrester Research report identified USAA as the leader in customer advocacy based on a customer survey.[46] USAA retained the top spot on Forrester Research's study in 2008[47] and 2009.[48]

In its May 2009 issue, Consumer Reports named USAA's brokerage division as the top rated discount brokerage service in the United States.[49]

In a survey of 145 companies conducted by Zogby International, USAA ranked #1 in customer service out of 145 American companies.[50]


USAA employs more than 23,400 personnel at its offices throughout the country.[51]

See also[edit]


  1. ^ "USAA Opens New Financial Center". USAA. 
  2. ^ "Our Financial Center in El Paso". USAA. 
  3. ^ a b c d e USAA 2014 Report to Members
  4. ^ ""
  5. ^ "Fortune 500 2010: Fortune 500 Companies 101-200". CNN. 
  6. ^ USAA Fact Sheets
  7. ^ Texas Department of Insurance
  8. ^ Spechler, Jay W. (1996). Reasonable Accommodation: Profitable Compliance With the Americans With Disabilities Act. ISBN 1-884015-94-8. , p. 229.
  9. ^ [1] Archived July 1, 2010 at the Wayback Machine
  10. ^ 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. Retrieved 2008-02-08. 
  11. ^ USAA fact sheet[dead link] retrieved April 16, 2008
  12. ^ [2] retrieved September 12, 2014
  13. ^ Investopedia, War Exclusion Clause Definition
  14. ^ FDIC Bank information search results for USAA, retrieved November 2, 2011
  15. ^ USAA Bank Will Let Customers Deposit Checks by iPhone, New York Times, August 9, 2009 retrieved August 25, 2009
  16. ^ USAA's Android App
  17. ^ USAA's Deposit@Mobile
  18. ^ American
  19. ^ Choosing the right ATM in Germany a high-stakes decision, Stars and Stripes, March 23, 2005 retrieved September 24, 2008
  20. ^ FTD Becomes Floral Provider for USAA, Reuters, Wed 2 Sept 2009, Retrieved 13 Sept 2009
  21. ^ USAA / Welcome to USAA
  22. ^
  23. ^ a b "USAA expanding its membership base, Army Times, Retrieved August 10, 2008"
  24. ^ a b "USAA page on expanded eligility Retrieved November 5, 2009"
  25. ^
  26. ^ Eligibility
  27. ^
  28. ^ USAA Investment Eligibility Guidelines
  29. ^ USAA Banking Eligibility Guidelines
  30. ^ BusinessWire Press Release
  31. ^ Insurance
  32. ^ [3]
  33. ^
  34. ^ "USAA Subscriber's Account Brochure" (PDF). USAA. Retrieved 8 August 2013. 
  35. ^ "USAA-CIC Nevada Declarations page" (PDF). 
  36. ^ List of USAA locations
  37. ^ Financial Centers
  38. ^
  39. ^ "Former USAA CEO McDermott dies at 86". San Antonio Business Journal, August 28, 2006, retrieved September 18, 2008
  40. ^ "Herres, former CEO of USAA and space program leader, dies at 75", San Antonio Express-News, July 25, 2008[dead link], retrieved September 18, 2008
  41. ^ Hendricks, David; "Herres took action to strengthen USAA", San Antonio Express-News, July 25, 2008[dead link], retrieved September 18, 2008
  42. ^ USAA CEO Robert G. Davis Named Chairman-Elect, Collision Repair Industry Insight, December 14, 2000, retrieved December 25, 2008
  43. ^ Poling, Travis E. and Jefferson, Greg; "For better or worse, Davis shook USAA up", San Antonio Express-News, Dec. 16, 2007[dead link], retrieved December 25, 2008
  44. ^ Poling, Travis E.; "USAA's Robles has 'military heart, business mind'", San Antonio Express-News, June 22, 2008, retrieved December 25, 2008 Archived November 20, 2010 at the Wayback Machine
  45. ^ "USAA Receives Chairman's Award", San Antonio Business Journal, Retrieved on 15 September 2008
  46. ^ San Antonio Express-News, June 27, 2007 Archived September 29, 2007 at the Wayback Machine
  47. ^ 2008 Forrester Research Press Release
  48. ^ USAA Ranks First in Customer Loyalty, San Antonio Express News, May 28, 2009[dead link], Retrieved June 7, 2009
  49. ^ Low-cost brokers score high in service, Consumer Reports, May 2009, Retrieved December 7, 2009
  50. ^ Holahan, Catherine (2009-06-10). "10 companies that treat you right". MSN Money. Archived from the original on June 13, 2009. Retrieved 2009-06-10. 
  51. ^ USAA 2011 Report to Members

External links[edit]