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About United Services Automobile Association

The United Services Automobile Association (USAA) is a mutual insurance company that serves some 12.4 million member customers—primarily military personnel, military retirees, and their families. Its lineup of offerings includes property/casualty and life insurance, banking, discount brokerage, investment management, and real estate services. It provides specialty products such as life insurance for soldiers deployed in war zones and financial planning services to invest hazardous duty pay. The company also provides discount shopping (floral, jewelry, and safety items) and travel and delivery services to its members.

Operations

Primarily a property/casualty and life insurance company for active and retired military personnel—United Services Automobile Association (USAA) dominates its niche market, knows its customers well, and enjoys a significant level of member loyalty and retention. The company has a net worth of more than $30 billion, owns or manages more than $260 billion in assets, and pays out roughly $15 billion in claims annually.

On average, each USAA member uses four of its products; the company ties its auto insurance rates to the number of products a member uses and how long they have held insurance with USAA. The company's insurance divisions include United Services Automobile Association, USAA Property and Casualty Insurance, and USAA Life Insurance.

USAA's bank offerings span standard bank products and services including checking and savings accounts, credit cards, mortgages, and auto loans. Its divisions include USAA Federal Savings Bank, USAA Residential Real Estate Services, and USAA Savings Bank. USAA Real Estate offers real estate development services to institutional and corporate customers.

Premiums account for about two-thirds of the company's revenue; net fees, sales, and loan income provide about 15%. Returns on investments generate about 10% of revenue.

Geographic Reach

In addition to its San Antonio, Texas, headquarters, United Services Automobile Association (USAA) has domestic customer service and sales offices in Arizona, Colorado, Florida, Texas, Maryland, New York, and Virginia. It has overseas offices in Frankfurt and London.

Sales and Marketing

United Services Automobile Association (USAA) relies largely on direct marketing to sell its products, including reaching clients via the telephone and internet. The company serves customers in the US Air Force, Army, Coast Guard, Marines, National Guard, Reserves, and Navy and retired US military. The company prioritizes recruitment and hiring of transitioning military members such as wounded military personnel, junior non-commissioned officers, and junior officers.

Financial Performance

As a private organization, United Services Automobile Association (USAA) reports that its revenue has risen each of the past four years as the company expands its membership numbers and its product offerings. Net income fell in 2016 but rebounded the following year.

The company's revenue grew roughly 3% to $31 billion in 2018, as its owned and managed assets expanded to more than $260 billion.

Net income rose 36% to $2.4 billion in 2017, despite facing the second consecutive year with record catastrophe losses. An increase in automobile policies led to a higher volume of claims that year; rising costs for parts and repairs also cut into the bottom line. Because the group has activities in banking and investment management, though, it is better able to withstand challenging insurance years.

The company's cash stores lost $168 million in 2017 to end the year at $12.3 billion.

Strategy

United Services Automobile Association's (USAA's) strategy centers on attracting and retaining members by adopting new technologies to improve the services it offers its members. In support of that tactic, the company announced plans in 2017 to hire up to 1,000 tech professionals by year-end 2020 at its Phoenix campus.

In 2019 the company partnered with State Farm to test blockchain technology to improve its speed of subrogation—wherein one insurance company recovers claim costs paid to customers for damages by the at-fault insurance company. The system could reduce the time for customers to receive deductible reimbursements.

The previous year USAA collaborated with Blippar to pilot a car recognition program that allows members to point their phones at cars made after the year 2000 and view information including purchase price, insurance cost, and the presence of similar vehicles in the area that are for sale.

In 2017 the company tested a program to provide customers with bank account access through Amazon's Alexa devices. The application provides balance information as well as data on spending habits. Two other digital innovations the company introduced that year were electronic health records (EHRs) for life insurance purchases and a military retirement comparison tool. Allowing members to use EHRs to purchase life insurance cut health record acquisition time by 30 days. The comparison tool integrates five factors (pay grade and years of service) to help members make retirement plan decisions.

Company Background

United Services Automobile Association (USAA) was established by 25 US Army officers in 1922. The company opened membership to the Air Force when that department was created in 1948. It established the USAA Federal Savings Bank in 1983.

United Services Automobile Association

9800 FREDERICKSBURG RD
San Antonio, TX 78288-0001
Phone: 1 (210) 531-8722

Stats

Employer Type: Privately Owned
Vice Chairman: Thomas B. Fargo
Assistant Vice President: Greg Fleming
Chairman: Lester L. Lyles
Employees (This Location): 14,802
Employees (All Locations): 26,300

Major Office Locations

San Antonio, TX

Other Locations

Phoenix, AZ
Laguna Hills, CA
Newport Beach, CA
San Francisco, CA
Colorado Springs, CO
Washington, DC
Coral Gables, FL
Tampa, FL
Chicago, IL
Shawnee Mission, KS
Annapolis, MD
Fayetteville, NC
Old Bridge, NJ
Las Vegas, NV
Highland Falls, NY
New York, NY
San Antonio, TX
Norfolk, VA
Frankfurt Am Main, Germany