Tuesday, December 29, 2015

USAA: Serving the Needs of the Men and Women of the US Military

The United Services Automobile Association (USAA) was originally known as the United States Army Automobile Association upon its inception in 1922 by US Army officers who established it as a mutual insurance company. Its current name was adopted in 1924 when the commissioned officers of the other branches of the US military became eligible for membership.

From its 286-acre headquarters in San Antonio, Texas, the USAA has become a group of companies engaged in diversified financial services offering a wide range of banking, insurance, and investments to individuals and their immediate families who are in active service or who have served in the United States military. By the end of 2014, the Fortune 500 company had 10.7 million members and counting.

The USAA is also considered an innovator in the industry. For example, it is a pioneer in the direct marketing model wherein most of its transactions are conducted by employees, not agents, using telephone and Internet technology. It first conducted the bulk of its business via mail in the 1960s, which transitioned into phone-based services in the late 1960s, followed by a toll-free number in 1978, and finally the Internet-based sales and services via its website in 1999.

The organization has several lines of business including:

• Casualty, life, and property insurance including homeowner, renters, and automobile insurance as well as personal property and umbrella insurance, among others. Emphasis must be made that while its life insurance policies are mostly standard in the business, these are different than most because these exclude the war exclusion clause.

• Banking services are provided by financial centers as well as the USAA Federal Savings Bank, which was established in December 1983 and which held more than $43.8 billion in deposits from over 6.3 million accounts (as of June 2011). The USAA Federal Savings Bank is the only facility offering full-service banking services while the financial centers provide related services, such as assistance and advice in obtaining USAA’s services including online opening of accounts.

Other services are investments and financial planning, mail-order catalog service, and real estate services.

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