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United Services Automobile Association
IndustryFinancial Services
Founded1922 (1922)
HeadquartersSan Antonio, Texas
United States
Number of locations11 financial centers [1]
Key peopleGeneral Lester Lyles, USAF (Ret.) (Chairman)
Maj. General Josue Robles Jr., USA (Ret.) (CEO)
ProductsInsurance, Banking, Investments, Retirement, Financial Planning
RevenueIncreaseUSD 19.036 billion (2011)[2]
Net incomeDecreaseUSD 2.128 billion (2011)[2]
Total assetsIncrease USD 104.352 billion (2011)[2]
Total equityIncrease USD 20.040 billion (2011)[2]
Employees~23,400 (2011)[2]
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United Services Automobile Association
IndustryFinancial Services
Founded1922 (1922)
HeadquartersSan Antonio, Texas
United States
Number of locations11 financial centers [1]
Key peopleGeneral Lester Lyles, USAF (Ret.) (Chairman)
Maj. General Josue Robles Jr., USA (Ret.) (CEO)
ProductsInsurance, Banking, Investments, Retirement, Financial Planning
RevenueIncreaseUSD 19.036 billion (2011)[2]
Net incomeDecreaseUSD 2.128 billion (2011)[2]
Total assetsIncrease USD 104.352 billion (2011)[2]
Total equityIncrease USD 20.040 billion (2011)[2]
Employees~23,400 (2011)[2]

The United Services Automobile Association (USAA) is a Texas-based diversified financial services group of companies[3] which includes a Texas Department of Insurance regulated[4] unincorporated, reciprocal inter-insurance exchange and a Fortune 500[5] financial services company offering banking, investing, and insurance to people and families that serve, or served, in the United States military. At the end of 2011, there were 8.8 million members.[2] 2.5 million of the total of 8.4 million members were subscribing members who have about $7–8 each on deposit with the exchange to guarantee its financial capabilities.[citation needed] The company reported a surplus [not Net Worth] of $19.3 billion in 2011.[6]

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.[7] USAA has since expanded to offer banking and insurance services to past and present members of the Armed Forces 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 members of other 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)[8] in a large single-occupancy office building on the city's northwest side.[9]

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 banking services in the 1980s.

In 1996, eligibility was extended to enlisted personnel.[10]

Lines of business

Property, casualty, and life insurance

USAA insured home in New York after a fire

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[11] (also known as a "war clause").


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.[12]

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,[13] mobile devices with Google's Android operating system,[14] and Microsoft's Windows Phone.[15] 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.[16]

Major banking competitors include Bank of America-Military Bank, Pentagon Federal Credit Union,[17] and the Navy Federal Credit Union.

Investing and financial planning

USAA provides a limited 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 somewhat limited free financial advice to members, as well as services which require agreement to pay a given fixed rate for such servicesfinancial 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 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,[18] FedEx, and ADT Security Services.[19]

For its own investment purposes, USAA operates a real estate company[20] 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 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.[21][22] 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;[23] however, the site does not contain a comprehensive statement of eligibility. USAA has, in the past, published a list[24] 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.[25]

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.[21] In November 2009, USAA expanded eligibility requirements to offer coverage to anyone who has ever served honorably in the US Military.[22]

Auto and property insurance and some banking services require that the customer meet membership eligibility criteria. USAA investment products[26] as well as deposit-only banking services[27] are available to non-members.[28]

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.[29]

Legal structure

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.[30] 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.

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.[31] In 2010 the distribution amounted to 6% of the member's Subscriber's Account balance.

USAA members sometimes receive policy dividends instead of distributions of profits, since they are not members of the insurance exchange.

Miscellaneous information

USAA's Colorado Springs location

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.[32]

Besides its headquarters in San Antonio, USAA has a second major office in Phoenix, AZ, and other smaller operations in Colorado Springs, CO; Norfolk, VA; Tampa, FL; Highland Falls, NY; London, England and Frankfurt, Germany.[33]


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.[34] He was succeeded as CEO by retired Air Force General Robert Herres.[35] It was under Herres that USAA expanded its services to enlisted members of the military and developed Internet based financial services.[36] Following General Herres as CEO was Robert G. Davis, a former Army officer[37] 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.[38] 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'."[39]

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 state regulators as well as federal entities like the SEC, FTC, and FDIC. In addition, its records are audited by Ernst & Young as well as the major financial rating agencies, who rate both USAA and many of its subsidiaries. Relevant ratings include:

Service ratings

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,[42] 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[43][44][45] home insurance,[46] mortgages,[47] and home equity loans.[48]

In its March 5, 2007 issue, BusinessWeek[49] ranked USAA first in its list[50] of "Customer Service Champs", a list of 25 national businesses that included the Four Seasons Hotels, Lexus and Starbucks. USAA repeated as first on BusinessWeek's list in its' March 3, 2008, issue.[51]

A 2007 Forrester Research report referenced in the San Antonio Express-News on June 27, 2007,[52] 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[53] and 2009.[54]

In its May 2009 issue, Consumer Reports named USAA's brokerage division as the top rated discount brokerage service in the United States.[55]

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.[56] Overall, USAA is rated among the best home insurance companies in terms of policy offerings, customer service, pricing and premiums, billing and payment options, and claims services, according to, who compiled data from both AM Best and JD Powers.[57]


USAA employs more than 23,400 personnel at its offices throughout the country.[2] In 2010, USAA was ranked 45th on Fortune Magazine's list of the "100 Best Companies to Work For".[58][59] In 2011, USAA moved up 28 spots to 17th on Fortune's list.[60] USAA has also been recognized for many years as one of the 50 best corporations for career advancement for Latinas in the US.[61][62] It has been recognized as a "Military Spouse-Friendly Employer"[63] and has also been recognized by GI Jobs as one of America's best employers for veterans and reservists.[64]

USAA was ranked 17th on the Computerworld's "100 Best Places to Work in IT" in 2006,[65] 39th in 2007,[66] 20th in 2008,[67] 9th in 2009,[68] and 1st in 2010,[69] 2011,[70] and 2012.[71][72]


  1. ^ "USAA Opens New Financial Center". USAA.
  2. ^ a b c d e f g " USAA 2011 Report to Members."
  3. ^ USAA Fact Sheets
  4. ^ Texas Department of Insurance
  5. ^ "Fortune 500 2010: Fortune 500 Companies 101-200". CNN.
  6. ^ Serving You Through Life (San Antonio, Texas): pp. 9. 2011.
  7. ^ Spechler, Jay W. (1996). Reasonable Accommodation: Profitable Compliance With the Americans With Disabilities Act. ISBN 1-884015-94-8., p. 229.
  8. ^ [1][dead link]
  9. ^ 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
  10. ^ USAA fact sheet[dead link] retrieved April 16, 2008
  11. ^
  12. ^ FDIC Bank information search results for USAA, retrieved November 2, 2011
  13. ^ USAA Bank Will Let Customers Deposit Checks by iPhone, New York Times, August 9, 2009 retrieved August 25, 2009
  14. ^ USAA's Android App
  15. ^ USAA's Deposit@Mobile
  16. ^ American
  17. ^ Choosing the right ATM in Germany a high-stakes decision, Stars and Stripes, March 23, 2005 retrieved September 24, 2008
  18. ^ FTD Becomes Floral Provider for USAA, Reuters, Wed 2 Sept 2009, Retrieved 13 Sept 2009
  19. ^ USAA / Welcome to USAA
  20. ^
  21. ^ a b "USAA expanding its membership base, Army Times, Retrieved August 10, 2008"
  22. ^ a b "USAA page on expanded eligility Retrieved November 5, 2009"
  23. ^
  24. ^ Eligibility
  25. ^
  26. ^ USAA Investment Eligibility Guidelines
  27. ^ USAA Banking Eligibility Guidelines
  28. ^ BusinessWire Press Release
  29. ^ Insurance
  30. ^ [2][dead link]
  31. ^ USAA Subscriber Savings Account Brochure, January, 2008
  32. ^ About USAA
  33. ^ List of USAA locations
  34. ^ "Former USAA CEO McDermott dies at 86". San Antonio Business Journal, August 28, 2006, retrieved September 18, 2008
  35. ^ "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
  36. ^ Hendricks, David; "Herres took action to strengthen USAA", San Antonio Express-News, July 25, 2008[dead link], retrieved September 18, 2008
  37. ^ USAA CEO Robert G. Davis Named Chairman-Elect, Collision Repair Industry Insight, December 14, 2000, retrieved December 25, 2008
  38. ^ 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
  39. ^ Poling, Travis E.; "USAA's Robles has 'military heart, business mind'", San Antonio Express-News, June 22, 2008[dead link], retrieved December 25, 2008
  40. ^ USAA earns solid credit ratings from A.M. Best, San Antonio Business Journal, Dec 23, 2008, retrieved December 25, 2008
  41. ^ S&P cuts ratings of 5 insurers, Aug 8, 2011, retrieved August 8, 2011
  42. ^ "USAA Receives Chairman's Award", San Antonio Business Journal, Retrieved on 15 September 2008
  43. ^ JD Power 2008 National Auto Insurance Study
  44. ^ JD Power 2007 Collision Repair Satisfaction Study,
  45. ^ JD Power 2008 Insurance New Buyer Study
  46. ^ JD Power 2007 National Homeowners Insurance Study
  47. ^ JD Power 2008 Primary Mortgage Servicer Study
  48. ^ JD Power 2007 Home Equity Line/Loan Servicer Study
  49. ^ Business Week
  50. ^ Business Week
  51. ^ Business Week
  52. ^ San Antonio Express-News[dead link]
  53. ^ 2008 Forrester Research Press Release
  54. ^ USAA Ranks First in Customer Loyalty, San Antonio Express News, May 28, 2009[dead link], Retrieved June 7, 2009
  55. ^ Low-cost brokers score high in service, Consumer Reports, May 2009, Retrieved December 7, 2009
  56. ^ Holahan, Catherine (2009-06-10). "10 companies that treat you right". MSN Money. Retrieved 2009-06-10.
  57. ^
  58. ^ "100 Best Companies to Work For" – #45 USAA
  59. ^ USAA Press Release regarding Fortune "100 Best Companies to Work For".
  60. '^ USAA Named to Fortunes "100 Best Companies to Work For".
  61. ^ Latina Style 2008 Press Release
  62. ^ USAA press release regarding Latina Style rankings
  63. ^ article about Military Spouse rankings 2007
  64. ^ GI Jobs "2007 List of Best Employers"
  65. ^ 2006 Computerworld rankings
  66. ^ Computerworld 2007 rankings
  67. ^ Computerworld 2008 rankings
  68. ^ Computerworld 2009 rankings
  69. ^ No. 1 Place To Work in IT: USAA – Computerworld 2010
  70. ^ No. 1 Place To Work in IT: USAA – Computerworld 2011
  71. ^ No. 1 Place To Work in IT: USAA – Computerworld 2012
  72. ^ USAA Scores a three-peat

External links