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USAA

From Wikipedia, the free encyclopedia
United Services Automobile Association
FormerlyUnited States Army Automobile Association (1922–1924)
Company typePrivate (Reciprocal inter-insurance exchange)
IndustryFinancial services
FoundedJune 20, 1922; 102 years ago (1922-06-20)
HeadquartersSan Antonio, Texas
United States
Number of locations
5 financial centers
Area served
Worldwide
Key people
Products
RevenueIncrease US$42.49 billion (2023)
Increase US$1.217 billion (2023)
Total assetsIncrease US$211.6 billion (2023)
Total equityIncrease US$29.15 billion (2023)
MembersIncrease 13.5 million (2023)
Number of employees
c. 37,000 (2023)
Capital ratio16.4% (Tier 1, Q2 2024)
Rating
Websiteusaa.com
Footnotes / references
[1][2][3]

The United Services Automobile Association (USAA) is an American financial services company providing insurance and banking products exclusively to members of the military, veterans and their families.[4] It was founded in 1922 in San Antonio, Texas, 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.[5][6]

USAA is headquartered in northwest San Antonio, occupying a 286-acre (116 ha) former horse farm.[7][8] USAA Federal Savings Bank, which provides banking services, is headquartered on a 575-acre (233 ha) campus in Phoenix, Arizona as of April 2024.[9]

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. 96 in the 2020 Fortune 500 list of the largest United States corporations by total revenue[10] and appeared on Fortune's 2021 Blue Ribbon list of companies, placing No. 355 on the Fortune Global 500, No. 94 on the Fortune 500, No. 55 on the 100 Best Companies to Work For and World’s Most Admired Companies.[11] At the end of 2020, it had more than 13 million members.[12]

History

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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 25 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. Despite initial success, by the late 1920s, a dispute between competing factions for control of the company threatened its long-term viability. The issue was resolved when feuding members agreed to hire a leader from outside, resulting in the 1928 appointment of Major General Ernest Hinds as general manager and secretary-treasurer. Hinds provided stability and remained in the position until his death in 1941.[13]

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 June 1999 via its website.[14]

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.[15]

In 2015, USAA employed more than 32,000 people at its offices throughout the world.[16]

On July 26, 2019, the Charles Schwab Corporation announced it would acquire USAA's investment management and brokerage accounts for $1.8 billion.[17] The deal with Charles Schwab closed on May 26, 2020.[18]

Lines of business

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Property, casualty, and life insurance

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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 unique in the industry, are different from most offerings since they do not include a war-exclusion clause.[19]

Banking

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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 and mobile devices with Google's Android operating system.[20]

Major banking competitors include Bank of America-Military Bank, Pentagon Federal Credit Union and Navy Federal Credit Union.[21]

Investing and financial planning

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USAA members are referred to its strategic partners, Charles Schwab Corporation and Victory Capital, for other investment services such as brokerage and trading, mutual funds and ETFs.[22][23][24]

Target market

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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.[25][26]

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. For a short time, USAA also offered enrollment for federal law enforcement.[25] In November 2009, USAA expanded eligibility requirements to offer coverage to anyone who has ever served honorably in the US Military. As of 2022, USAA has also extended membership to those who have a general discharge from the military.[26]

Leadership

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Led by USAA Chairman of the Board Vice Admiral James M. Zortman (Ret.),[27] USAA's board of directors named Wayne Peacock CEO-elect in January 2020 to succeed former CEO Stuart Parker. Peacock became CEO in February 2020 and is the first USAA CEO who is not a veteran of the armed forces.[27]

USAA former CEOs include retired Air Force brigadier general Robert F. McDermott.[when?] 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.[28] He was succeeded[when?] as CEO by retired Air Force General Robert T. Herres.[29] It was under Herres that USAA expanded its services to enlisted members of the military and developed Internet based financial services.[30] Following General Herres as CEO was Robert G. Davis,[when?] 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.[31]

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.[32] 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'."[33]

Locations

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USAA's Colorado Springs location
USAA's Charlotte, North Carolina South End location

Besides its headquarters in San Antonio, USAA has a second major office in Phoenix. USAA also has offices in Chesapeake, Virginia; Colorado Springs, Colorado; Plano, Texas; and Tampa, Florida. Internationally, USAA has offices in London and Frankfurt.[34][35][36] The company has numerous office buildings in the Phoenix area. Their largest office buildings are on a 400-acre multi-use north Phoenix campus built in 2017, these buildings contain 4,500 workers. In May 2019 USAA opened another Phoenix office located at 25700 N Norterra Pkwy in north Phoenix that will eventually house 1,100 employees primarily software developers.[37][38]

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 (8,400 m2) of space in a new building in South End called The Square. Company employees started moving in at the end of 2021. In June 2022, USAA purchased The Square from developer Beacon Partners for $97 million. Currently the company has 500 employees in the building and they occupy 2 out of the 6 floors they originally agreed to lease of the 10 story building.[39][40]

Bank secrecy violations

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On March 17, 2022, The Financial Crimes Enforcement Network (FinCEN) announced a $140 million "civil money penalty" against USAA Federal Savings Bank for violations of the Bank Secrecy Act.[41]

See also

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References

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  1. ^ "Annual Report to Members 2023" (PDF). USAA. Retrieved September 26, 2024.
  2. ^ "Pillar 3 Regulatory Capital Disclosures" (PDF). USAA. Retrieved September 26, 2024.
  3. ^ "USAA Company Profile" (PDF). Fidelity Investments. Retrieved September 26, 2024.
  4. ^ "USAA Car Insurance Review for 2023".
  5. ^ "Corporate Overview". USAA. Archived from the original on 2018-07-14. Retrieved July 22, 2017.
  6. ^ Spechler, Jay W. (1996). Reasonable Accommodation: Profitable Compliance With the Americans With Disabilities Act. Delray Beach, Fla: St. Lucie Press. p. 229. ISBN 978-1884015946.
  7. ^ Jefferson, Greg. "Speaker-to-be has deep Republican roots". San Antonio Express-News. Archived from the original on July 1, 2010.
  8. ^ 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. Archived from the original on 2011-06-15. Retrieved 2008-02-08.
  9. ^ Danner, Patrick; Iszler, Madison (September 26, 2024). "USAA Federal Savings Bank has quietly moved its headquarters from San Antonio to Phoenix". San Antonio Express-News. Hearst Communications. Retrieved September 26, 2024.
  10. ^ "Fortune 500 Companies 2021". Fortune. Retrieved 12 July 2022.
  11. ^ "Fortune's Blue Ribbon Companies 2021". Fortune. Retrieved 12 July 2022.
  12. ^ "2020 Annual Report to Members" (PDF). USAA. Retrieved 2022-03-06.
  13. ^ "USAA History". Funding Universe.com. Retrieved July 1, 2021.
  14. ^ "Board of Governors of The Federal Reserve System "Cash, Check or Cell Phone?"". www.federalreserve.gov. 23 February 2010. Retrieved 12 July 2022.
  15. ^ "USAA Membership: USAA Now Open To Non-Military Folk!". Budgets Are Sexy!. 2017-12-06. Archived from the original on 2014-09-12. Retrieved 2020-09-10.
  16. ^ "USAA 2015 Report to Members". USAA. Archived from the original on 2016-04-20. Retrieved 2016-05-03.
  17. ^ Cullen, Terri (2019-07-26). "Charles Schwab to buy USAA assets in $1.8 billion deal". CNBC. Retrieved 2019-11-25.
  18. ^ Santana, Steven (2020-05-26). "Schwab completes purchase of USAA Investment Management". San Antonio Business Journal. Retrieved 2020-09-03.
  19. ^ "War Exclusion Clause Definition". Investopedia. Archived from the original on 2015-10-02. Retrieved 2015-10-01.
  20. ^ "USAA Bank Will Let Customers Deposit Checks by iPhone". The New York Times. 2009-08-09. Archived from the original on 2017-10-05. Retrieved 2009-08-25.
  21. ^ Boyd, Terry (2005-05-23). "Choosing the right ATM in Germany a high-stakes decision". Stars and Stripes. Retrieved 2020-09-10.
  22. ^ "Products: Investments". USAA. Retrieved 2020-09-10.
  23. ^ "Victory Capital Completes Acquisition of USAA® Asset Management Company" (Press release). USAA. 2019-07-01. Retrieved 2020-06-12 – via GlobeNewswire.
  24. ^ Southall, Brooke (2019-07-16). "Victory Capital squeezes costs out of USAA mutual funds following acquisition, but Schwab may walk off with brokerage, wealth manager in purported $2B deal". RIABiz. Retrieved 2020-09-10.
  25. ^ a b "USAA expands Military customer base". Phoenix Business Journal. 2009-11-05. Retrieved 2020-09-10.
  26. ^ a b ""Page on Expanded Eligility". USAA. Archived from the original on 2012-04-18. Retrieved 2009-11-05.
  27. ^ a b "Board of Directors". USAA. Retrieved 2020-09-10.
  28. ^ "Former USAA CEO McDermott dies at 86". San Antonio Business Journal. 2006-08-28. Archived from the original on 2006-09-04. Retrieved 2020-09-10.
  29. ^ "Former USAA CEO Bob Herres passes away". San Antonio Business Journal. 2008-07-25. Retrieved 2020-09-10.
  30. ^ Hendricks, David (2008-07-25). "Herres took action to strengthen USAA". San Antonio Express-News. [dead link]
  31. ^ "USAA CEO Robert G. Davis Named Chairman-Elect". Collision Repair Industry Insight. 2000-12-14. Archived from the original on 2002-01-06. Retrieved 2008-12-25.
  32. ^ Poling, Travis E.; Greg Jefferson (2007-12-16). "For better or worse, Davis shook USAA up". San Antonio Express-News. [dead link]
  33. ^ Poling, Travis E. (2008-06-22). "USAA's Robles has 'military heart, business mind'". San Antonio Express-News. Archived from the original on 2010-11-20. Retrieved 2008-12-25.
  34. ^ "Corporate Offices". USAA. Archived from the original on 2017-08-27. Retrieved 2017-03-15.
  35. ^ "USAA to expand Plano IT operations, create 680 jobs". Dallas Business Journal. Archived from the original on 2015-01-06. Retrieved 2016-04-02.
  36. ^ Youn, Soo (2019-01-03). "USAA, a traditional safeguard for military families, is under fire for denying loans to Coast Guard clients during the government shutdown". ABC News. Retrieved 2019-01-07.
  37. ^ Vanel, Corina (6 May 2019). "USAA opens new Phoenix office, plans to hire hundreds of IT developers". Phoenix Business Journal. Retrieved 19 October 2022.
  38. ^ Sunnucks, Mike (24 October 2017). "USAA, Sunbelt start construction on 400-acre development". Phoenix Business Journal. Retrieved 19 October 2022.
  39. ^ Fahey, Ashley (27 May 2021). "USAA confirms Charlotte office, will lease six floors at South End building". Charlotte Business Journal. Retrieved 28 May 2021.
  40. ^ Thomas, Jennifer (3 June 2022). "USAA buys The Square at South End from Charlotte developer Beacon Partners for nearly $97M". Charlotte Business Journal. Retrieved 19 October 2022.
  41. ^ "FinCEN Announces $140 Million Civil Money Penalty against USAA Federal Savings Bank for Violations of the Bank Secrecy Act". Retrieved 2023-05-06.
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