You may have seen commercials on television about USAA. They're a very unique type of insurance company that is best known for providing members of the military and their families with home and auto insurance. If you're in a military family then the odds are that either you or some member of your own family are insured under one or more of their plans. This is a provider that stands apart from most of the others and not everyone is aware of their origins or philosophies. We decided to take a closer look at this remarkable insurance company and we found out some very interesting facts about them. Here are 20 things about USAA that we thought you'd like to know.
1. USAA was founded by a group of Army officers
At the time that the company was established, it was difficult for men and women in the armed forces to secure auto and home insurance coverage. Their occupations put them in a category that was considered to be high risk. This made many insurers hesitant to insure them because of their high mobility as well as other occupational risk factors. A group of 25 Army officers decided to get together and develop a type of insurance by which they could insure one another through a group effort. What started out small many years ago has not grown into a national phenomenon, offering service men, women and their families excellent options for home and auto insurance that doesn't discriminate against them because of their military affiliations. In fact, it rewards them for it.
2. USAA is almost a century old
The group was formed in 1922. This makes it 96 years old and it's almost reached the century mark. USAA started out small and it has made some impressive progress throughout its evolution as a business. What started out as a good idea among a few dozen men in the 1920s has grown into a top-notch organization that is helping to improve the lives of military men, women and their families with protection and peace of mind that they're covered in case of an emergency or an accident.
3. They're a Fortune 500 Company
USAA has experienced such tremendous growth and success that they have been recognized as a Fortune 500 company. The company offers diversified financial services for their customers. They've expanded the line of services that they offer clients since the beginning as a mutual home and auto insurer. They now offer banking, investment and other types of financial services. USAA made the 2018 Fortune 500 list of the top 100 of the largest providers in the United States in the category of corporations assessed by their total revenue.
4. You must have some affiliation with the military for eligibility
Although the insurance began as plans that were designated solely for Army officers, it has expanded its eligibility criteria to include all members of the armed forces of the United States and their families. Both active an on-active military members qualify along with retired, those who have served and are now have civilian status, their children and grandchildren.
5. They changed their name
USAA started at as an acronym for the United States Army Automobile Association. It initially only offered a mutual type of automobile insurance for members when it all started in 1922. By 1924, the name of the company was changed to United Services Automobile Association. This was to reflect the changes that were made in eligibility criteria. USAA also opened the plan up to commissioned officers throughout all branches of the United States military services.
6. USAA has locations in other countries
The United States has military personnel stationed all over the world. In order to better serve its members, it has opened a few branches outside of the U.S. USAA has offices opened in London England and Frankfurt Germany as well as throughout the United States.
7. USAA financial services are based in San Antonio, Texas
The headquarters for USAA is based in Texas where the bank is located that offers banking, other financial and insurance services. There are 22,000 employees who serve a total of 8 million USAA members. Enrollment in the companies various plans has grown by leaps and bounds and with the size of the company on the increase, what better place for a big company than the state of Texas, which itself is known for going big on most things that they do.
8. They operate on a reciprocal basis for insurance
The reciprocity platform by which USAA operates is a simple principle. When it was first formed, the Army officers agreed that they would form a pool and insure one another's vehicles. What this means is that premiums go into a large pool and the money that is collected from each policyholder is used to cover claims that are made.
9. USAA is known as "America's good bank"
The company has earned this title by remaining independent of federal assistance. In essence, it's the members who are keeping it going through their premium payments. When the financial crisis hit, the federal government made funds available to help struggling companies keep a solid footing. USAA didn't accept one cent of federal bailout money. They did it on their own and owe their current success to the leadership within the company and the millions of members who join forces to keep this valuable resource on firm financial ground when many others around them are failing. This is just one of the reasons why USAA is considered to be America's "good bank."
10. They received national recognition
USAA was named to a coveted Fortune magazine list. They made it to the 20 bests companies to work for in America list. It's not easy to reach this level of recognition. A few of the reasons for their inclusion as one of the best companies to work for is that they maintain consistently high marks for providing top notch customer service and the members they serve provide this feedback, so it's coming from a very reliable source. USAA maintains a family environment and many employees of the company have shared that working there is an enjoyable and rewarding experience.
11. When other companies were collapsing, USAA was growing
It's no secret that when other comparable companies were barely hanging on, and many of them going under, USAA held firm. It's one thing to survive and that in itself is commendable in a national financial crisis, but USAA did something even more remarkable. They actually grew during some of the darkest financial times in recent history. In 2008, their value was assessed at $14.6 billion. By 2011, their value had actually grown to $19.3 billion. When other banks were tightening their purse strings and giving out far fewer loans, USAA was still lending money at their usual rates.
12. USAA offers banking incentives that many competitors don't
Perhaps USAA's financial services have more to offer military personnel that most other banks. It's likely that their success is in part, due to the fact that they offer a free checking account. They also offer electronic banking services and they will reimburse the ATM fees charged by other banks up to $15. They also offer lending services to their members that average 43 percent lower rates than the current national average. It's clear that USAA offers military members and their dependents a lot of advantages than they would have with other financial institutions. With a high number of military personnel in the United States, there are a lot of people who are prime for using their services. USAA services a large niche within the population.
13. The headquarters has an interesting past
The main headquarters for USAA wasn't a fancy official office building. It was formerly a horse farm. The company purchased the farm and converted it into the headquarters. They needed the space and at 286 acres, there's plenty of room for expansion. They may end up needing every inch of the acreage at the rate that the business is growing.
14. They're pioneers in direct marketing
USAA started out their business by advertising their auto and home insurance to military personnel by the old standard form of snail mail. They maintained this platform for marketing from the 1920s through the 1960s and it was an effective way of reaching the masses in its day. In fact, it was one of the only ways because it was well before the time when every household had a television and not everyone had radios either. The internet hadn't been thought of yet either. In the 1960s, they transitioned their marketing approach to include telephone based sales and this became the standard way of conducting business. It was a big deal when they established a toll-free telephone number in 1978. This allowed military families a way to call without incurring phone charges and it was considered to be major progress in marketing and business activities. Customers were certainly pleased with the change. It was a real treat when they launched their website in 1999.
15. USAA's financial services are the most recent addition
USAA is becoming very popular with military personnel not only because of the auto and home policies they offer. The banking and financial services are also a big drawing card. They haven't been offering financial services for that long though. Until the 1970s, USAA was limited to home and auto but during the era of the '70s they started offering investment management options. It wasn't until the 1980s that they began offering banking services.
16. Civilians were allowed in for a brief period
There was a period of time between September of 2009 and the Fall of 2013 that USAA did allow civilians to apply for restricted membership. They were allowed to use the investment services and many of the bank deposit services. The property and auto insurance products, however, were not made available to anyone outside of the military or their dependents.
17. One thing sets USAA apart from the rest
While USAA is not entirely unique in the way that they operate, they do provide one exceptional benefit that is hard to find for a reasonable rate anywhere else. There is no clause that cites a war exclusion in their policies.
18. USAA has a unique structure
One of the most interesting things about USAA is the way that the company is structured. They are not a corporation, although they are a Fortune 500 company. This is one attribute that makes them different from all the rest. They qualify for inclusion because they are a group who insures one another. USAA has no stockholders to pay as most corporations do, instead, the profits are distributed to its members. There was a total of $1.3 billion distributed in 2010.
19. USAA has a mission to serve the members of the military
It's written in their mission statement. This is the one constant that has remained since the company was first formed in 1922. Although much about USAA has undergone an evolution, such as the types and ranges of products and services that they provide, they have stayed true to their mission to serve milliary members and they now embrace their families and extended families as well. USAA is military personnel-centric and recent statistics show that 95% of military personnel have some type of policy through them. They serve officers, enlisted personnel, active duty, National Guard and Reserve, ROTC, OCS/OTS and all who have received an honorable discharge having served previously. Their children are also eligible for coverage and there are no age limits in force.
20. Some former service members are no longer eligible
If there is a question about eligibility, USAA offers a useful tool for determining this on their website. For a period of time in the past, there were some other classifications of professionals who were granted eligibility. These included some FBI and Secret Service special agents along with NCIS, OSI, CI and CID agents, US Foreign Service Officers and some officers from several different agencies not listed here. Over time, USAA has honed in its focus upon military members and as a result, some people who were previously eligible in the past may no longer be. They offer the website assistance for a fast and easy determination of eligibility.
Written by Dana Hanson
Read more posts by Dana Hanson