USAA
Encyclopedia
United Services Automobile Association (USAA) is a Fortune 500
financial services
company offering banking, investing, and insurance to people and families that serve, or served, in the United States military
. In 2011, there were 8.4 million members. The company reported a net worth of $19.3 billion in 2011.
USAA was founded in 1922 by a group of U.S. Army officers to self-insure each other when they were unable to secure auto insurance due to the perception that they were a high-risk group. USAA has since expanded to serve all members of the Armed Forces and all who served honorably in the US Armed Forces, as well as their immediate families, with property & casualty insurance, banking, life insurance
, investment
and financial planning products and services.
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. 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.
, and London, England
early in its history.
USAA is headquartered in San Antonio, Texas
, occupying 286 acres (115.7 ha) (a former horse farm) in a large single-occupancy office building.
The organization started offering homeowner's
and life insurance
in the 1960s, and broker
age and banking services
in the 1980s.
In 1996, eligibility was extended to enlisted personnel.
, 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 (also known as a "war clause").
. The bank was established on December 30, 1983. According to the FDIC, as of June 2011, the bank held over $43.8 billion in deposits with more than 6.3 million accounts.
The bank's main financial center in San Antonio is its only full-service banking location. It operates limited-service financial centers in other cities, usually near military bases, which provide advice and assistance in obtaining services and opening accounts online. These limited service locations cannot process deposits or withdrawals, but ATMs located on site do allow customers to make monetary transactions.
Services can be accessed in person, by mail, by phone, or through the internet. USAA Federal Savings Bank provides members the ability to deposit checks into their accounts by using mobile applications on both the iPhone
and mobile devices with Google's Android operating system. With USAA's Deposit@Home feature, checks can be deposited at home using a computer scanner, and some locations of the UPS Store can accept non-cash deposits into USAA accounts.
USAA also offers ATM
fee rebates, 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
.
Major banking competitors include Bank of America-Military Bank
, Pentagon Federal Credit Union
, and the Navy Federal Credit Union
.
s. Mutual funds established by other companies can also be purchased and held in USAA investing accounts. USAA also offers limited free financial planning advice, as well as a more thorough flat-fee or hourly-rate financial planning service.
and Hertz Corporation, as well as discounts on cruise travel. Their retail alliances also include partnerships with FTD
, FedEx
, and ADT Security Services
.
For its own investment purposes, USAA operates a real estate company which has holdings including major office buildings, industrial buildings, hotels, and other properties throughout the country.
, which consists of members of the U.S. military and their immediate families. To that end, they have 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).
Eligibility can be determined using its website; however, the site does not contain a comprehensive statement of eligibility. 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. 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.
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. In November 2009, USAA expanded eligibility requirements to offer coverage to anyone who has ever served honorably in the US Military.
Auto and property insurance and some banking services require that the customer meet membership eligibility criteria. USAA investment products as well as deposit-only banking services are available to non-members.
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.
company is that it is not a corporation. The parent company, United Services Automobile Association, is an inter-insurance exchange, the establishment of which is provided for under the Texas Insurance Code. 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. 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.
Associate members sometimes receive policy dividends instead of distributions of profits, since they are not members of the insurance exchange.
Besides its headquarters in San Antonio, it has a second major office in Phoenix, AZ, as well as other smaller operations in Colorado Springs, CO; Norfolk, VA; Tampa, FL; Highland Falls, NY
; London, England and Frankfurt, Germany.
Robert F. McDermott
. The USAA building was constructed under his tenure and McDermott was also the driving force behind USAA's shift from service-by-mail to service-by-phone. He was succeeded as CEO by retired Air Force General Robert Herres
. It was under the leadership of Herres that USAA expanded its services to enlisted members of the military and ventured into Internet
based financial services. Following General Herres as CEO was Robert G. Davis, a former Army officer who came to USAA with experience working at 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 leadership, 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 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.'"
as well as the major financial rating agencies, who rate both United Services Automobile Association and many of its subsidiaries. Relevant ratings include:
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. Since then, USAA has remained at the top of the JD Power ratings for auto insurance home insurance, mortgages, and home equity loans.
In its March 5, 2007 issue, BusinessWeek
ranked USAA first in its list of "Customer Service Champs", a list of 25 national businesses that included the likes of Four Seasons Hotels
, Lexus
and Starbucks
. USAA repeated as first on BusinessWeek's list in its March 3, 2008 issue.
A 2007 Forrester Research report referenced in the San Antonio Express-News on June 27, 2007, identified USAA as the leader in customer advocacy based on a customer survey. Eighty-eight percent of the USAA customers surveyed said "My financial provider does what's best for me, not just its own bottom line." No other company evaluated scored higher than 78%. USAA retained the top spot on Forrester Research's study in 2008 and 2009.
In its May 2009 issue, Consumer Reports
named USAA's brokerage division as the top rated discount brokerage service in the United States.
In a survey of 145 companies conducted by Zogby International
, USAA ranked #1 in customer service out of 145 American companies, and was subsequently awarded first place in the 2009 MSN Money
Customer Service Hall of Fame.
USAA was ranked 17th on the Computerworld
100 Best Places to Work for IT Professionals in 2006, 39th in 2007, 20th in 2008, 9th in 2009, and 1st in 2010 and 2011.In the 2007 Computerworld rating, only one company with more IT employees was ranked higher than USAA and only one Texas company with 100 IT employees was rated higher. Like many Fortune 500 companies, USAA utilizes third party IT contractors.
Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
company offering banking, investing, and insurance to people and families that serve, or served, in the United States military
Military of the United States
The United States Armed Forces are the military forces of the United States. They consist of the Army, Navy, Marine Corps, Air Force, and Coast Guard.The United States has a strong tradition of civilian control of the military...
. In 2011, there were 8.4 million members. The company reported a net worth of $19.3 billion in 2011.
USAA was founded in 1922 by a group of U.S. Army officers to self-insure each other when they were unable to secure auto insurance due to the perception that they were a high-risk group. USAA has since expanded to serve all members of the Armed Forces and all who served honorably in the US Armed Forces, as well as their immediate families, with property & casualty insurance, banking, life insurance
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
, investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
and financial planning products and services.
The company was one of the pioneers of direct marketing
Direct marketing
Direct marketing is a channel-agnostic form of advertising that allows businesses and nonprofits to communicate straight to the customer, with advertising techniques such as mobile messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional...
and 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.
History
The organization was originally called the United States Army Automobile Association. In 1924, the name was changed to United Services Automobile Association, when members of other military services became eligible for membership. The company opened offices in Frankfurt, GermanyGermany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, and London, England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
early in its history.
USAA is headquartered in San Antonio, Texas
San Antonio, Texas
San Antonio is the seventh-largest city in the United States of America and the second-largest city within the state of Texas, with a population of 1.33 million. Located in the American Southwest and the south–central part of Texas, the city serves as the seat of Bexar County. In 2011,...
, occupying 286 acres (115.7 ha) (a former horse farm) in a large single-occupancy office building.
The organization started offering homeowner's
Home insurance
Home insurance, also commonly called hazard insurance or homeowner's insurance , is the type of property insurance that covers private homes...
and life insurance
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
in the 1960s, and broker
Broker
A broker is a party that arranges transactions between a buyer and a seller, and gets a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal...
age and banking services
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
in the 1980s.
In 1996, eligibility was extended to enlisted personnel.
Property, casualty, and life insurance
USAA offers a range of personal property and casualty (P&C) insurance, including automobile insurance, homeowner insurance, renters insurance, valuable personal property insurance, and umbrella insurance. In addition to P&C insurance, USAA provides whole life insuranceWhole life insurance
Whole Life Insurance, or Whole of Life Assurance , is a life insurance policy that remains in force for the insured's whole life and requires premiums to be paid every year into the policy.-History:...
, term life insurance
Term life insurance
Term life insurance or term assurance is life insurance which provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period expires coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or...
, 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 (also known as a "war clause").
Banking
Banking services are provided by the USAA Federal Savings BankFederal savings associations
Federal savings associations , in the United States, are institutions chartered by the Office of Thrift Supervision pursuant to the provisions of the Home Owners' Loan Act, a U.S. federal statute...
. The bank was established on December 30, 1983. According to the FDIC, as of June 2011, the bank held over $43.8 billion in deposits with more than 6.3 million accounts.
The bank's main financial center in San Antonio is its only full-service banking location. It operates limited-service financial centers in other cities, usually near military bases, which provide advice and assistance in obtaining services and opening accounts online. These limited service locations cannot process deposits or withdrawals, but ATMs located on site do allow customers to make monetary transactions.
Services can be accessed in person, by mail, by phone, or through the internet. USAA Federal Savings Bank provides members the ability to deposit checks into their accounts by using mobile applications on both the iPhone
IPhone
The iPhone is a line of Internet and multimedia-enabled smartphones marketed by Apple Inc. The first iPhone was unveiled by Steve Jobs, then CEO of Apple, on January 9, 2007, and released on June 29, 2007...
and mobile devices with Google's Android operating system. With USAA's Deposit@Home feature, checks can be deposited at home using a computer scanner, and some locations of the UPS Store can accept non-cash deposits into USAA accounts.
USAA also offers ATM
Automated teller machine
An automated teller machine or automatic teller machine, also known as a Cashpoint , cash machine or sometimes a hole in the wall in British English, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public...
fee rebates, 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
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
cards in 2006 in addition to their traditional offering of Mastercard
MasterCard
Mastercard Incorporated or MasterCard Worldwide is an American multinational financial services corporation with its headquarters in the MasterCard International Global Headquarters, Purchase, Harrison, New York, United States...
.
Major banking competitors include Bank of America-Military Bank
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
, Pentagon Federal Credit Union
Pentagon Federal Credit Union
Pentagon Federal Credit Union is a federal credit union headquartered in Alexandria, Virginia, chartered and regulated under the authority of the National Credit Union Administration...
, and the Navy Federal Credit Union
Navy Federal Credit Union
Navy Federal Credit Union is a credit union headquartered in Vienna, Virginia, chartered and regulated under the authority of the National Credit Union Administration of the U.S. federal government. Navy Federal is the largest natural member credit union in the world, both in asset size and in...
.
Investing and financial planning
USAA provides a limited discount brokerage service and a family of no-load mutual fundMutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
s. Mutual funds established by other companies can also be purchased and held in USAA investing accounts. USAA also offers limited free financial planning advice, as well as a more thorough flat-fee or hourly-rate financial planning service.
Other business
Through its Alliance Services Company (ASC), USAA runs a mail-order catalog service specializing in the sale of diamonds and jewelry. In addition, the ASC secures a variety of discounted services for members. These include travel-related services through rental car alliances with Avis Budget GroupAvis Budget Group
Avis Budget Group, Inc. operates Avis Rent A Car System, LLC , Budget Rent A Car System, Inc. and Budget Truck Rental, LLC...
and Hertz Corporation, as well as discounts on cruise travel. Their retail alliances also include partnerships with FTD
Florists' Transworld Delivery
-Going public:In 1994, FTD began a process of demutualization.On December 19, 1994, a precursor to the FTD Corporation, a private, for-profit company, acquired FTD, which then divided FTD into two organizations: FTD Incorporated, a for profit corporation, and FTD Association, a non-profit trade...
, FedEx
FedEx
FedEx Corporation , originally known as FDX Corporation, is a logistics services company, based in the United States with headquarters in Memphis, Tennessee...
, and ADT Security Services
ADT Security Services
ADT Security Services, originally American District Telegraph, now also known as simply ADT, is a division of Tyco International and a worldwide supplier of electronic security systems, fire alarm systems, communication systems, and integrated building management systems.-History:There were many...
.
For its own investment purposes, USAA operates a real estate company which has holdings including major office buildings, industrial buildings, hotels, and other properties throughout the country.
Target market
USAA's mission statement indicates its focus is to serve its niche marketNiche market
A niche market is the subset of the market on which a specific product is focusing; therefore the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact...
, which consists of members of the U.S. military and their immediate families. To that end, they have 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).
Eligibility can be determined using its website; however, the site does not contain a comprehensive statement of eligibility. USAA has, in the past, published a list of other eligible persons including special agents of the FBI and Secret Service
United States Secret Service
The United States Secret Service is a United States federal law enforcement agency that is part of the United States Department of Homeland Security. The sworn members are divided among the Special Agents and the Uniformed Division. Until March 1, 2003, the Service was part of the United States...
, agents of the various military investigative services (NCIS
Naval Criminal Investigative Service
The United States Naval Criminal Investigative Service is the primary security, counter-intelligence, counter-terrorism, and law enforcement agency of the United States Department of the Navy...
, OSI
Air Force Office of Special Investigations
The Air Force Office of Special Investigations , is a Field Operating Agency of the United States Air Force that provides professional investigative services to commanders throughout the Air Force...
, 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.
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. In November 2009, USAA expanded eligibility requirements to offer coverage to anyone who has ever served honorably in the US Military.
Auto and property insurance and some banking services require that the customer meet membership eligibility criteria. USAA investment products as well as deposit-only banking services are available to non-members.
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.
Legal structure
One of the characteristics that allows USAA to operate differently than almost every other Fortune 500Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
company is that it is not a corporation. The parent company, United Services Automobile Association, is an inter-insurance exchange, the establishment of which is provided for under the Texas Insurance Code. This insurance exchange is made up of current and former military officers and NCOs
Non-commissioned officer
A non-commissioned officer , called a sub-officer in some countries, is a military officer who has not been given a commission...
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. 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
Since there are no shareholders, profits are retained for financial strength or returned to the members. Returns are accomplished through an SSA (Subscriber's Savings Account). Each year a portion of USAA's profit is retained as "unassigned," the rest is allocated to each member's SSA using a formula based on the amount of premium the member paid that year as well as the member's SSA balance. The allocation of capital to a member's SSA occurs early in the calendar year. Late in the calendar year a portion of the member's SSA 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 SSA balance. The entirety of the SSA belongs to the member, but is not completely distributed until approximately 6 months after the member no longer has a USAA P&C policy. In 2010 the distribution amounted to 6% of the member's Subscriber's Account balance.Associate members sometimes receive policy dividends instead of distributions of profits, since they are not members of the insurance exchange.
Miscellaneous information
The stated mission of USAA is to facilitate the financial security of its members, associates and their families through provision of a range of financial products and services. In so doing, USAA seeks to be the provider of choice for the military community.Besides its headquarters in San Antonio, it has a second major office in Phoenix, AZ, as well as other smaller operations in Colorado Springs, CO; Norfolk, VA; Tampa, FL; Highland Falls, NY
Highland Falls, New York
Highland Falls, formerly named Buttermilk Falls, is a village in Orange County, New York, United States. The population was 3,678 at the 2000 census. The village was founded in 1906...
; London, England and Frankfurt, Germany.
Association Leadership
USAA experienced much of its growth under its former CEO, retired Air Force Brigadier GeneralBrigadier General
Brigadier general is a senior rank in the armed forces. It is the lowest ranking general officer in some countries, usually sitting between the ranks of colonel and major general. When appointed to a field command, a brigadier general is typically in command of a brigade consisting of around 4,000...
Robert F. McDermott
Robert F. McDermott
Brigadier General Robert Francis McDermott was the first permanent Dean of the Faculty at the United States Air Force Academy, and later served as Chairman and CEO of USAA. He is often referred to as the "Father of Modern Military Education" for his contributions to that field...
. The USAA building was constructed under his tenure and McDermott was also the driving force behind USAA's shift from service-by-mail to service-by-phone. He was succeeded as CEO by retired Air Force General Robert Herres
Robert T. Herres
Robert Tralles Herres was the first Vice Chairman of the Joint Chiefs of Staff.-Early life and education:Herres was born in 1932, in Denver, where he attended East High School. He graduated from the U.S. Naval Academy in 1954...
. It was under the leadership of Herres that USAA expanded its services to enlisted members of the military and ventured into Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
based financial services. Following General Herres as CEO was Robert G. Davis, a former Army officer who came to USAA with experience working at 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 leadership, 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 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.'"
Credit ratings
Since it is not a publicly traded corporation, USAA is not bound by the same corporate governance rules as publicly traded companies. Even so, USAA is subject to insurance regulation and examination by all 50 states as well as federal entities like the SEC, FTC, and FDIC. In addition, its records are audited by Ernst & YoungErnst & Young
Ernst & Young is one of the largest professional services networks in the world and one of the "Big Four" accountancy firms, along with Deloitte, KPMG and PricewaterhouseCoopers ....
as well as the major financial rating agencies, who rate both United Services Automobile Association and many of its subsidiaries. Relevant ratings include:
- A. M. Best Company: A++ (Superior)
- Moody'sMoody'sMoody's Corporation is the holding company for Moody's Analytics and Moody's Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized...
Investor Service: Aaa (Exceptional) - Standard and Poor's: AA+
Service ratings
USAA has consistently received the highest customer service ratings available to all financial services companies, including those not in its niche. For its highly rated customer service, in 2002 JD PowerJ.D. Power and Associates
J.D. Power and Associates is a global marketing information services firm founded in 1968 by James David Power III. The firm conducts surveys of customer satisfaction, product quality, and buyer behavior for industries ranging from cars to marketing and advertising firms. The firm is best known for...
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. Since then, USAA has remained at the top of the JD Power ratings for auto insurance home insurance, mortgages, and home equity loans.
In its March 5, 2007 issue, BusinessWeek
BusinessWeek
Bloomberg Businessweek, commonly and formerly known as BusinessWeek, is a weekly business magazine published by Bloomberg L.P. It is currently headquartered in New York City.- History :...
ranked USAA first in its list of "Customer Service Champs", a list of 25 national businesses that included the likes of Four Seasons Hotels
Four Seasons Hotels
Four Seasons Hotels, Inc. is a Canadian-based international ultra-luxury, five-star hotel management company. Travel + Leisure magazine and Zagat Survey rank the hotel chain's 84 properties among the top luxury hotels worldwide...
, Lexus
Lexus
is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. First introduced in 1989 in the United States, Lexus is now sold globally and has become Japan's largest-selling make of premium cars. The Lexus marque is marketed in over 70 countries and territories worldwide, and has...
and Starbucks
Starbucks
Starbucks Corporation is an international coffee and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 17,009 stores in 55 countries, including over 11,000 in the United States, over 1,000 in Canada, over 700 in the United Kingdom, and...
. USAA repeated as first on BusinessWeek's list in its March 3, 2008 issue.
A 2007 Forrester Research report referenced in the San Antonio Express-News on June 27, 2007, identified USAA as the leader in customer advocacy based on a customer survey. Eighty-eight percent of the USAA customers surveyed said "My financial provider does what's best for me, not just its own bottom line." No other company evaluated scored higher than 78%. USAA retained the top spot on Forrester Research's study in 2008 and 2009.
In its May 2009 issue, Consumer Reports
Consumer Reports
Consumer Reports is an American magazine published monthly by Consumers Union since 1936. It publishes reviews and comparisons of consumer products and services based on reporting and results from its in-house testing laboratory. It also publishes cleaning and general buying guides...
named USAA's brokerage division as the top rated discount brokerage service in the United States.
In a survey of 145 companies conducted by Zogby International
Zogby International
IBOPE Zogby International is an international market research, opinion polling firm founded in 1984 by John Zogby. The company polls and consults for a wide spectrum of business media, government, and political groups, and conducts public opinion research in more than 70 countries...
, USAA ranked #1 in customer service out of 145 American companies, and was subsequently awarded first place in the 2009 MSN Money
MSN Money
MSN Money, a service of MSN, is a website about business news, that is edited in association with CNBC. It provides stock exchange prices and financial information on companies. Information on stock and share options is also provided. Stock prices are also supplied through msnbc.com.The site also...
Customer Service Hall of Fame.
Employment
USAA employs more than 22,600 personnel at its offices throughout the country. In 2010, USAA was ranked 45th on Fortune Magazine's list of the "100 Best Companies to Work For." In 2011, USAA moved up 28 spots to 17th on Fortune's list. USAA has also been recognized for many years as one of the 50 best corporations for career advancement for Latinas in the US. It has been recognized as a "Military Spouse-Friendly Employer" and has also been recognized by GI Jobs as one of America's best employers for veterans and reservists.USAA was ranked 17th on the Computerworld
Computerworld
Computerworld is an IT magazine that provides information for senior IT leaders. It is published in many countries around the world under the same or similar names. Its publisher is International Data Group. Computerworld serves the needs of IT management via print and online...
100 Best Places to Work for IT Professionals in 2006, 39th in 2007, 20th in 2008, 9th in 2009, and 1st in 2010 and 2011.In the 2007 Computerworld rating, only one company with more IT employees was ranked higher than USAA and only one Texas company with 100 IT employees was rated higher. Like many Fortune 500 companies, USAA utilizes third party IT contractors.
External links
- USAA Educational Foundation, a nonprofit organization providing consumer information
- USAA history
- USAA Real Estate Company