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. (Industry Strategies: Company Profile).Eighty years ago, the United Services Automobile Association Automobile Association may refer to:
A company or a location that offers a multitude of services to a client or a customer. The idea is to provide convenient and efficient service and also to create the opportunity for the company to sell more products to clients and customers. " for more than 4.8 million members. Despite years of changing times, wars and a fluctuation Fluctuation A price or interest rate change. in the U.S. military, USAA's relationship with the military stands firm. Its decision to forgo the traditional agent model of selling products and services and its commitment not to become a publicly owned Publicly owned can refer to:
Paralleling the military's call for honesty, integrity, loyalty and service, USAA USAA United Services Automobile Association USAA Urban Superintendents Association of America USAA United States Achievement Academy USAA United States Arbitration Act of 1925 USAA United States Axemen's Association USAA United States Air-Table-Hockey Association has implemented these core values into each of its products, services and daily operations, said Robert G. Davis, president, chairman and chief executive officer. "These values are evident in everything we do, and where many companies today are receiving bad publicity about straying stray intr.v. strayed, stray·ing, strays 1. a. To move away from a group, deviate from the correct course, or go beyond established limits. b. To become lost. 2. from their core values, our values have been inherent to USAA for 80 years and have been emphasized in our military training," he said. From the Beginning The United States Army United States Army Major branch of the U.S. military forces, charged with preserving peace and security and defending the nation. The first regular U.S. fighting force, the Continental Army, was organized by the Continental Congress on June 14, 1775, to supplement local Automobile Insurance Association was established in 1922 by a small gathering of Army officers who decided that the best way to obtain automobile insurance, despite the risk involved in their frequent moves, was to form a member-owned company in which members self-insured each other. In 1923, membership opened up to U.S. Navy and Marine Corps officers and warrant officers, and the company changed its name in 1924 to the United Services Automobile Association to reflect its growing market. Eligibility requirements have evolved to include all other military branches, in addition to members' families and ex-spouses. This evolution into new markets and the creation of various companies--focusing on nearly every aspect of insurance and financial services--have turned USAA into a convenience store of products and services for millions of customers. A Unique Package In addition to strong adherence to its core values, USAA believes its structure positions it strongly against its competitors. "It's the combination of being uniquely structured as an interinsurance reciprocal exchange, being a direct writer and having top-notch employees that allows us to deliver services in an efficient and effective manner, which produces good financial results," said Josue Robles Robles is a common surname in the Spanish language meaning oaks, and may refer to:
As a direct writer, USAA believes the decision to forgo an agency force gives it a financial leg up over its competition. Rather than relying on agents to sell and market products and services, USAA conducts most of its business by mail, telephone and the Internet, making it at one time the largest direct mail company in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Customer service has always been a key component of its operations, with nearly 1,200 representatives on hand round-the-clock to assist customers calling, writing or logging into the company Over the past several years, USAA has received numerous accolades in recognition of this service, including the recent Chairman's Award from J.D. Power and Associates for its performance in customer satisfaction within the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and insurance industries. High-level customer satisfaction is also evidenced by its nearly 97% customer retention rate. With less than a 4% customer defection each year, USAA stands apart from many of its competitors' 10% to more than 20% annual loss in their book of business. "USAA treats customer defection as a huge issue," said Fred Reich-held, a Bain fellow for the global business consultants Bain and Co. and author of Loyalty Rules! How Today's Leaders Build Lasting Relationships. In his book, Reich-held features USAA as one of the leading companies to build superior quality service with customers. He says the company is unique in that it surveys members who leave the company to understand their reason for defection. "They don't put on a hard sale, but rather listen to see what's wrong and what they can do to remedy the situation." The company's decision not to go public also sets it apart from competitors. "Becoming a publicly owned company could potentially be one of the things that would hurt us as a company because we would have to shift our emphasis from our members to Wall Street," said Davis. Instead, he believes USAA is able to engage in more strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. by not having to concentrate on earnings per share. He also fears the company would be too small to defend itself against hostile takeovers Hostile Takeover A takeover attempt that is strongly resisted by the target firm. Notes: Hostile takeovers are usually bad news, as the employee moral of the target firm can quickly turn to animosity against the acquiring firm. . "When companies go public, management's attention is diverted di·vert v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. to those kinds of efforts rather than running the business." USAA's management team believes the company's current structure will enable it to be a 21st century competitor. "At one time we were probably exclusive in the way we structured our business model, such as being a direct writer without agents, which has given us an advantage and allowed us to operate at a fairly low OER OER Office of Extramural Research (US NIH) OER Open Educational Resources OER Officer Evaluation Report OER Optimized Edge Routing OER Office of Energy Research OER Owners' Equivalent Rent OER Operating Expense Ratio [operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. ratio]," said Gen. Henry Viccellio Jr., president of the USAA Property and Casualty Group. Over the past 20 years, however, a number of competitors have designed business models similar to USAA, which puts the company in a more competitive environment. "However, this is a business challenge that I think the company will both meet and exceed," he said. Analysts following the company also believe USAA's unique approach to reaching its niche market A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. gives it an advantage over its competition. "USAA fits the ideal full financial-services picture," said Stephanie Guethlein McElroy, an A.M. Best Co. life/health analyst. "Its noncommissioned insurance sales approach and the fact that its representatives place customers' best interests first, suggesting only those products and services they need, sets them apart in the industry." Richard Attanasio, an A.M. Best Co. property/casualty analyst, added that the company's strong capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and unique business model, in addition to the many touch-points it has with its customers, are the winning combination that makes USAA a top-rated company. Financial Outlook Although the company was rocked by a few minor financial challenges over the past several years, USAA's 2002 financial results have been fairly aggressive thus far, said Robles. While it was hit hard by this year's drop in the stock market, which resulted in not meeting its goals for investment income since the beginning of the year, USAA continues to have strong operational results, he added. USAA's $15 billion in investment portfolios is spread across several areas--generally about 20% in stock-market investments, 10% in real estate and 70% in bonds. In 2001, the company felt some of the pressures caused by the economic recession, particularly in its limited revenue growth. However, this was offset by aggressive expense management, Robles said. Also, USAA suffered less than $20 million in losses from the events of Sept. 11, 2001. The majority of its claims came from clean-up reimbursements of New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. members' apartments and several cars that were destroyed in New York City and Washington, D.C. About 200 USAA members died during the attacks, and many had life insurance policies with the company. USAA anticipates that this year's results will surpass those in 2001, including last year's pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. of $737 million and $604 million in net income. "If we aren't struck by any major catastrophes--weather or market-related--we should have a good year," said Robles. A big piece of USAA's financials is driven by what happens during the June through November hurricane season Hurricane season refers to a period in a year when hurricanes usually form. For more information see: Tropical cyclone#Times of formation. For a lists of past seasons, see:
The company also is enjoying growth of its owned and managed assets. USAA currently owns about $36 billion in assets and manages another $29 billion, most of which are in unaffiliated mutual funds. "One thing we are proud of is that we're not having huge disintermediations," said Robles. "We aren't having people yank Yank steamship stoker vainly tries to climb the social ladder, then fails in attempt to avenge himself on society. [Am. Drama: O’Neill The Hairy Ape in Sobel, 339] See : Failure (jargon) yank money out of the company and move it somewhere else. They trust us and our products and know we will steer them in the right direction." Robles also expects to see steady growth in revenue, income and net worth in the next several years. "I am pretty optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future--not saying it won't be hard--but we're certainly going to stay on our flight plan in terms of our financial security." USAA expects continued membership growth over the next several years also will contribute to this financial stability. Growth of the company's information technology, which at one time cut into bottom-line dollars, is also expected to prove profitable this year. The USAA Information Technology Co., which operates as a separate for-profit entity under the USAA umbrella, expects its IT spending will be less than in 1997, said Stephen E. Yates, president of the IT company. "While costs have gone up, we have turned back the spending clock five to six years as the company has grown its revenue by more than one-fourth its size." Business volumes also have increased by roughly 33% during that time, and members' increased interest in using the usaa.com Web site as a point of contact with the company will likely result in added growth. Yates anticipates expansion of wireless devices and online services, including the opportunity for members to move monies between accounts at the click of the mouse. Serving a Niche USAA says accessibility to affordable insurance and diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services are two ways in which the company expresses its appreciation of the military. "USAA is and continues to be committed to the military and its families," said Davis. USAA stands firm in its dedication to its military niche, with no plans to expand membership to outside markets. Management believes a move into the "civilian" market would be detrimental det·ri·men·tal adj. Causing damage or harm; injurious. det  ri·men to the company structure and not in the best
interest of its members. "We were established by a small group of
Army officers for a very specific purpose, and even though we are much
larger today and diversified in what we offer members, that commitment
to the military community is still a big part of our culture and
business commitment," Viccellio said.Over the years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time company has extended its membership eligibility requirements. During the early 1970s, USAA members expressed an interest in coverage for family members, including children and grandchildren GRANDCHILDREN, domestic relations. The children of one's children. Sometimes these may claim bequests given in a will to children, though in general they can make no such claim. 6 Co. 16. . Since that time, ex-dependents have become a growing book of business, and currently more than 1.7 million family members are part of the USAA Property and Casualty Group. "These members assimilate as·sim·i·late v. 1. To consume and incorporate nutrients into the body after digestion. 2. To transform food into living tissue by the process of anabolism. a sense of responsibility, accountability and dependability dependability - software reliability that makes a military family something special, and that pays off for us in a business sense," said Viccellio. Another eligibility change in 1997, however, generated some controversy. Gen. Robert T. Herres Robert T. Herres (born January 12, 1932) 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. , who served as chief executive officer from 1993 to 2000 and chairman from 1993 to his retirement this year, proposed that membership be extended to enlisted en·list·ed adj. Of, relating to, or being a member of a military rank below a commissioned officer or warrant officer. enlisted Adjective personnel. While some members and staff resisted breaking USAA's tradition of serving officers only, the majority believed it was the right move for the changing times. "Those of us in the military and in combat know that the military community is comprised of both officers and enlisted personnel, so we were delighted with this decision," said Davis. Today, one in three active-duty enlisted personnel is a USAA member. The company is also paying close attention to military population. Despite a fluctuation in the number of individuals joining the U.S. military over the years, USAA has never questioned serving only its niche market. The number of military personnel since the Cold War has remained stable, and many believe this trend will continue for the next several years. Currently, 335,000 officers and 1.9 million enlisted personnel make up the U.S. military market. The U.S. government recruits 21,000 new officers and 260,000 enlisted personnel each year. In addition, about 84,000 USAA members' children reach independence and need coverage, said Viccellio. "If world events result again in a reduced military, then that's the military we're here to serve. If world events turn sour and danger appears on the horizon, then we're here to serve a larger military," he added. "We'll take it as it comes, making sure we are positioned to meet their needs, whether we are at peace or at war." Accommodating Members USAA has made a strong commitment to serve members stationed in the United States and overseas. "We continually look for ways to take the burden off members because they are protecting us and we don't want them to worry about ATM fees or other expenses when they are moving or are across international borders," said Karen B. Presley, senior vice president of marketing. The company has recently developed several services to accommodate deployed members. For example, USAA credit card holders deployed overseas are offered a lower interest rate of 6%, while interest rates are removed for individuals involved in combat or placed in harm's way harm's way n. A risky position; danger: a place for the children that is out of harm's way; ships that sail into harm's way. as designated by the U.S. Department of Defense. Continued coverage during members' deployment is another service offering. The company created USAA Limited to ensure that its more than 90,000 customers stationed in Europe don't suffer a lapse (language) LAPSE - A single assignment language for the Manchester dataflow machine. ["A Single Assignment Language for Data Flow Computing", J.R.W. Glauert, M.Sc Diss, Victoria U Manchester, 1978]. in coverage during their overseas assignment. USAA also has an alliance with an Asian carrier to assist members stationed in the Far East. "We are licensed to write insurance through local agents in South Korea, and we write them on a direct relationship basis in a number of other Far East countries," said Viccellio. To case the burden of moving expenses, USAA recently implemented a permanent change-of-station program reducing credit card interest rates to 6% for 90 days for military members on the move. Creating a Military Environment Military awareness is an important part of the company's culture and its staff. About 10% of USAA's employees have military backgrounds, which help create a deeper appreciation and understanding of USAA members and their families. Davis, the son of a career naval officer NAVAL OFFICER. The name of an officer of the United States, whose duties are prescribed by various acts of congress. 2. Naval officers are appointed for the term of four years, but are removable from office at pleasure. Act of May 15, 1820, Sec. 1, 3 Story, L. and the most highly decorated dec·o·rate tr.v. dec·o·rat·ed, dec·o·rat·ing, dec·o·rates 1. To furnish, provide, or adorn with something ornamental; embellish. 2. combat veteran to lead the company, believes his exposure to military life has helped him better understand the parallel between the core values of the military and the company. USAA is working to instill in·still v. To pour in drop by drop. in stil·la tion n. military values into its entire employee
base. All employees go through an orientation process to introduce them
to facets of the U.S. military, including ranks, service branches and
history. Employees also learn about members and their military
experiences through a member spotlight video featured at the
company's monthly management meetings.The celebration of military holidays, including special Memorial Day and Veterans Day observances, has become an important part of the company's culture. In addition, the headquarters building displays military posters and memorabilia mem·o·ra·bil·i·a pl.n. 1. Objects valued for their connection with historical events, culture, or entertainment: posters, publicity photographs, and other movie memorabilia. 2. , such as an original 1943 Norman Rockwell Noun 1. Norman Rockwell - United States illustrator whose works present a sentimental idealized view of everyday life (1894-1978) Rockwell drawing of U.S. soldiers from 1776 to 1943, vintage flags from the Revolutionary War era and an enormous replica Earlier document exchange software from Farallon Communications, Inc. that converted a Windows or Mac document into a proprietary viewing format. The viewer could be distributed separately or embedded within the document itself, turning it into a single-document viewer. of the Statue of Liberty's hand holding the torch. "We try to create a good environment and appreciation for what the military really does Warren Trotter, better known as Really Doe, is an American rapper from Chicago, Illinois. He is affiliated with Kanye West and his G.O.O.D. Music family and label. Discography Songs
Trust Is Key For military members engaged in combat, trust is key. USAA recognizes that trust and has made it No. 1 strategy for connecting with customers. "We try to understand individuals' needs and offer appropriate solutions rather than trying to sell them products and services that aren't in their best interest," said Davis. It's not uncommon for a USAA representative to inform a member that he or she has too much insurance or offer alternative products that can save added dollars. "As long as we continue that bond with them, that's the difference between us and most other companies," he said. Trust is also tied into the company motto--"We know what it means to serve." When consultants were searching for the ideal motto, they found from surveying members and competitors that USAA owned both the service and trust equations, Presley said. "The fact that members can come to us and we won't sell them something they don't need is proof of this trust. "Our mission is very clear and we don't plan on changing that," Presley said. "It directs us to be the provider of choice for the military community and it clearly defines our objectives so we don't violate members' trust in the service, integrity and ethics ethics, in philosophy, the study and evaluation of human conduct in the light of moral principles. Moral principles may be viewed either as the standard of conduct that individuals have constructed for themselves or as the body of obligations and duties that a that we hold true." USAA Top Products Private-passenger auto liability still commands the largest percentage of total net premiums written. Private Passenger Auto Liability 39.6% Auto Physical 34.7% Homeowners 20.8% All Other 4.9% Source: A.M. Best Co. Note: Table made from pie chart Major USAA P/C Direct Premium Writings By State--2001 ($ Thousands) Texas $862,175 California 701,512 Florida 601,684 Virginia 411,053 Georgia 245,837 Source: A.M. Best State/Line Products. RELATED ARTICLE: USAA at a Glance United Services Automobile Association (USAA) Headquarters: San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. Chairman, President and Chief Executive Officer: Robert G. Davis Established: 1922 by a group of 25 Army officers who had difficulty obtaining reliable automobile insurance coverage because they were considered transient A malfunction that occurs at random intervals and lasts for a short duration such as a spike or surge in a power line or a memory cell that intermittently fails. See spike and power surge. transient - 1. and bad risks. The company, then named the United States Army Automobile Insurance Association, became a member-owned association in which members insured each other. Maj. William H. Garrison, U.S. Army Signal corps, was the company's founder and first president of the board. Number of members: 4.8 million (includes 95% active-duty military officers and one in three active-duty enlisted personnel) Number of employees: More than 22,000 Major office locations: Phoenix; Norfolk, Va.; Colorado Springs Colorado Springs, city (1990 pop. 281,140), seat of El Paso co., central Colo., on Monument and Fountain creeks, at the foot of Pikes Peak; inc. 1886. It is a year-round resort and a booming military, technological, and commercial city. , Cob See chip on board. .; Tampa, Fla.; Sacramento, Calif.; London and Frankfurt, Germany. Ranking: Eleventh largest property/casualty insurer in the United States based on 2001 net premiums written. Group members: USAA Casualty Insurance Co., USAA General Indemnity Co., USAA Limited, USAA Texas Lloyd's Co., United Services Auto Association, USAA County Mutual Insurance Co. Financials: In 2001, USAA's owned and managed assets were S63.7 billion; net worth increased by nearly $350 million, or 5%; pretax income was S737 million; total revenue was $9 billion. Major products: Property/casualty (private passenger automobile, dwelling fire, homeowners, boat owners, comprehensive personal liability, household goods and personal effects personal effects n. an expression often found in wills ("I leave my personal effects to my niece, Susannah") personal effects (things) include clothes, cosmetics, and items of adornment. , personal articles floater Floater A bond or other type of debt whose coupon rate changes with market conditions (short-term interest rates). Also known as "floating-rate debt". Notes: For example, a floater bond may have the coupon rate set at "T-bill rate plus 0.5%". and personal umbrella policies Umbrella policy Insurance for exports of an exporter whose issuer handles all administrative requirements. ); life/health; annuities; no-load mutual funds No-load mutual fund An open-end investment company whose shares are sold without a sales charge. There can be other distribution charges, however, such as Article 12B-1 fees. A true no-load fund has neither a sales charge nor a distribution fee. ; discount brokerage A discount brokerage is a business that charges clients significantly lower fees than traditional brokerages, typically offering comparatively fewer services and/or advice. ; credit cards; banking and alliance services. Company motto: "We know what it means to serve." Web site: www.usaa.com On Alert "Nothing can stop us now" is a fitting motto for the USAA Information Technology Co.'s recent move to make the company fully operational in the event of a natural disaster or major catastrophe. The IT company is now in the process of turning an existing testing facility into a back-up computer center located approximately 200 miles from USAA's San Antonio headquarters. While the company's IT functions weren't directly impacted by the events of Sept. 11, the disaster signaled the need for implementing a back-up facility to keep USAA operational in the event of downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. caused by a major catastrophe. The creation of an off-site back-up facility became a key IT strategy this year. USAA initially planned to rent a back-up computer center in Philadelphia. The long distance from its headquarters, however, and the possibility that travel could shut down in the event of a national disaster or major catastrophe prompted the company to turn to a closer locale (programming) locale - A geopolitical place or area, especially in the context of configuring an operating system or application program with its character sets, date and time formats, currency formats etc. Locales are significant for internationalisation and localisation. . "Since options in Philadelphia are on a first-come, first-serve basis and a risk-sharing pool, we decided we couldn't take that kind of risk. So we made a major investment to move into full capacity in our Texas center," said Stephen E. Yates, president of the IT company. Because the testing center operates on water and power systems separate from those in San Antonio, USAA felt the facility was the solution to its needs. In May, the company completed a test of the center. Representatives from each line of business were on hand to man operations, and both production and routine traffic were moved to the site. The company is continuing to build the center to a much more robust level, and it recently fully tested its bank capabilities, Yates said. "In addition, we're halfway through testing the life and property and casualty companies and plan on having the rest of the business tested before the end of the year." The back-up center is designed to recover IT operations within two to 36 hours during a downtime, depending on the type of application, Yates said. "The creation of the center is focused on the company's dedication to its members and their need for continued high-quality customer service during an event." USAA assists sept. 11 survivor efforts Just as the U.S. military works to protect the nation, USAA was there when the country needed it on Sept. 11. The only "civilian" company invited to help with survivor assistance at the Pentagon immediately following the attacks, USAA assembled and deployed several survivor assistance teams to Washington, D.C. These teams were responsible for aiding survivors with immediate insurance and financial concerns. The company received accolades from both the U.S. Navy and the Department of Defense for its efforts. USAA also deployed several survivor assistance teams to New York City to assess damage and assist members at or near the World Trade Center. "As soon as the teams identified themselves as being with USAA, they were immediately allowed into the area to assess damages," said Robert G. Davis, president, chief executive officer and chairman. Back in its San Antonio headquarters and its seven other worldwide locations, the company moved into high gear to ensure that operations remained fully functional and that members continued to be served in a timely and efficient manner. "A period of crisis allows you to see just how good you really are," said Davis. When USAA's efforts were put to the test, he believes the company came through with flying colors Noun 1. flying colors - complete success; "they passed inspection with flying colors" flying colours success - an attainment that is successful; "his success in the marathon was unexpected"; "his new play was a great success" . USAA's strong connection with members was important to the work. Denise Beeson, a USAA policy service representative, played a vital role in sharing good news with family members on Sept. 11. With phone service down throughout much of the greater New York City area immediately following the events, a USAA member and employee of the World Trade Center turned to the company for help. After the member contacted the company's toll-free number, Beeson connected her with family members to let them know she was alive. "If I do one good thing in my whole life, and perhaps this was the good deed deed, in law, written document that is signed and delivered by which one person conveys land or other realty (see property) to another. A deed may assure the extent of the conveying party's ownership or, if the party is uncertain of the precise extent, he issues a , it was worthwhile," Beeson said in a company videotape videotape Magnetic tape used to record visual images and sound, or the recording itself. There are two types of videotape recorders, the transverse (or quad) and the helical. that recounted the phone call. The strong military experience of more than 10% of USAA employees and the company's understanding of how the military operates were evident in its actions immediately following Sept. 11. One of its initial efforts was to set up an operations center The facility or location on an installation, base, or facility used by the commander to command, control, and coordinate all crisis activities. See also base defense operations center; command center. , which was transitioned within an hour. At no time during the events did the company experience any downtime in service, Davis said. "We went into a 'combat' mode very quickly, and I was able to communicate with employees and members across the country through a variety of media, including our Web site." The company also made every effort to assist members affected by the events as quickly as possible. Claims were processed immediately, and checks for damages were sent out within hours of being processed. In addition, USAA made sure its various companies remained frilly frill n. 1. A ruffled, gathered, or pleated border or projection, such as a fabric edge used to trim clothing or a curled paper strip for decorating the end of the bone of a piece of meat. 2. functional. For example, the USAA Information Technology Co. ran remote test operations of its computer systems, and was able to run operations fully for more than 48 hours without any human connections to the systems. The company also implemented two off-site locations where IT functions could be performed, both within easy driving distance from its headquarters. "We would expect this kind of continuation of service because many employees came from the Department of Defense and the military, and they have all been trained to remain fully operational in times of crisis," said Davis. The focus remained on continuing to serve its 4.8 million members and assist them throughout the ordeal ordeal, ancient legal custom whereby an accused person was required to perform a test, the outcome of which decided the person's guilt or innocence. By an ordeal, appeal was made to divine authority to decide the guilt or innocence of one accused of a crime or to , he added. Marketing strategies were also revised immediately following Sept. 11. The company ceased all direct mail marketing to members for about three months out of "respect for the situation," said Karen B. Presley, senior vice president of marketing. Only messages about deployment and the availability of life insurance coverages were sent to members during that time. USAA believes it was the only company to increase life insurance limits for military personnel immediately following Sept. 11, in addition to continuing its commitment not to implement a war clause into life insurance policies. USAA's deployment guide, developed prior to Sept. 11,. was one of the most sought-after publications immediately following the events. The guide, which includes checklists, a simple power of attorney, information about online worldwide products and services, and other valuable information for those being deployed overseas, was mailed to hundreds of thousands of members and bulk shipped to installations from which members typically deploy. The company also set up a deployment center on its Web site. The online center allowed members to receive much of the same information found in the printed guide, including a downloadable checklist to help them and their families prepare for deployment. USAA also set up a toll-free telephone line, manned by staff highly trained in deployment situations. Historical Highlights This year marks USAA's 80th anniversary Events of the eight-decade history mark the company's development into the leading insurer and financial services provider of the U.S. military Several historical highlights include: * The company was founded in 1922 by 25 Army officers who self-insured themselves for automobile coverage. * USAA's first home office was located in a World War I barracks bar·rack 1 tr.v. bar·racked, bar·rack·ing, bar·racks To house (soldiers, for example) in quarters. n. 1. A building or group of buildings used to house military personnel. at Kelly Field in San Antonio. * The company changed its name from the United States Army Automobile Insurance Association to the United Services Automobile Association in 1924. * In 1925, USAA received its first Texas state license. * In 1952, its first overseas office was established in Frankfurt, Germany. Ten years later, the London office opened its doors, and both continue to serve thousands of members stationed overseas. * In 1956, the first U.S. branch office opened in New York City, with approximately 15 members and about 50 calls coming into the office each day * In 1957, the company installed its first IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) computers. Today computers handle more than 23 million online transactions per day, and store an equivalent of 1.6 billion pages on more than 300,000 tapes. If unraveled, the tapes would stretch around the Earth 2.5 times. * In 1960, homeowners insurance was offered. * The USAA Life Insurance Co. was formed in 1963. Five years later, USAA Casualty Insurance Co. opened its doors. * In 1969, the company purchased 286 acres of land to build its current headquarters in San Antonio. Today, this is one of the largest single-occupancy buildings in the United States, rivaling the Sears Tower Sears Tower, Chicago, the world's third tallest building. Until the opening of the 1,483-ft (452-m) Petronas Towers (1997) in Kuala Lumpur, Malaysia, it was the world's tallest building. Constructed from 1970 to 1974 for Sears, Roebuck & Co. and the Pentagon. * In 1978, USAA began relying on toll-free numbers to connect with members. * The USAA Federal Savings Bank Noun 1. federal savings bank - a federally chartered savings bank FSB savings bank - a thrift institution in the northeastern United States; since deregulation in the 1980s they offer services competitive with many commercial banks began in 1985. * In 1997, USAA began including enlisted military personnel as members. * In 1999, the company Web site, www.usaa.com, was launched, currently handling more than 100 million online transactions per year. * In 2001, members owned more than 16 million total products. * In May 2001, USAA was named the best financial services provider in America by American Banker American Banker is a daily newspaper covering the financial services industry. Founded in 1835 and based in New York, American Banker's 70 reporters and editors in six cities monitor developments and breaking news affecting banks. survey respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. . It was ranked 224th on Fortune magazine's annual list of "America's 500 Largest Companies," and was included in its list of "America's Most Admired Companies A yearly publication by Fortune Magazine, America's Most Admired Companies consists of corporations that are highly esteemed by the likes of Business Executives, Directors, and Analysts. A survey is taken of close to 3300 professionals who give their opinions on the companies. ." * Also in 2001, USAA was named to Working Mother magazine's list of the "100 Best Companies for Working Mothers," Computerworld magazine's top 10 of "100 Best Places to Work in Information Technology," and Latina Style magazine's "The 50 Best Companies for Latinas to Work for in the United States." * In 2002, USAA was ranked 215th on Fortune magazine's annual list of 'America's 500 Largest Companies." * In 2002, at its 80th anniversary celebration, J.D. Power and Associates awarded USAA its Chairman's Award, in recognition of its excellent performance in customer satisfaction within the financial services and insurance industries. Meet the Members Most USAA members point to high-quality customer service, timely payment of claims, diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. of products and services, and dedication to the military and its families as the driving forces behind maintaining the company's satisfied and loyal customer base. Laura Peet, a USAA policyholder Policyholder An individual who owns an insurance policy. in New York City, said her coverage with USAA has been "top-notch" and interaction with the company's customer-service representatives has been nothing less than satisfying. An automobile policyholder since age 16, Peet also has renters coverage and a newly purchased homeowners policy with USAA. "The company is all about customer service. With experiences I've had with other insurers, I sometimes felt as if I was getting water out of a stone, but with USAA I always feel like they're on my side and help me through whatever situation I'm in." She believes the diversification of products and services that creates a "one-stop shop" is also contributing to her high-level satisfaction with the company. Another New York City policyholder, Phil Nourie, said affordable rates and positive interactions with the company's customer-service department have made him a loyal customer. "[USAA's] quality products are incredibly affordable, and while you usually step away from things that seem too good to be true, they actually are with this company." He also believes USAA's commitment to its military members is a reflection of its patriotism Patriotism See also Chauvinism, Loyalty. America, Captain comic-strip character known as the “protector of the American way.” [Comics: Horn, 155–156] American elm traditional symbol of American patriotism. and appreciation for the millions of individuals who serve and protect the country. "It's a very good benefit for people who give their time to our country, and a lot of people don't do that and don't get any type of benefit from this service. It's nice to see that there's a company out there that upholds their promises." Randall Kirsch kirsch n. A colorless brandy made from the fermented juice of cherries. [French, short for German Kirschwasser; see kirschwasser. of Atlanta said his experience in filing a claim with USAA was anything but unpleasant. After someone broke into his car and stole his stereo system and about 30 compact discs, USAA went above and beyond the call of duty, he said. Rather than just reimbursing him for the items, the company asked him to fax it a list of the stolen CDs and the stereo's user manual, and within days it sent him replacement CDs and a stereo upgrade because his system had been discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: . Little Marketing, Big Payoff When asked why they joined USAA, 90% of the members say it's because someone told them about the company. Word of mouth, in fact, is USAA's No. 1 marketing strategy. With a customer retention rate of nearly 97%, the military-niche insurer and financial-services provider relies on its members to spread positive messages about USAA to other military members and their families. "Since the military is converged at installations and military bases across the world, this approach continues to serve us well," said Karen B. Presley, senior vice president of marketing. Word of mouth and a concentrated reliance on the mail, telephone and the Internet to reach potential members are the company's key marketing strategies. While most insurers turn to agents to attract customers, USAA has forgone this approach. Instead, a worldwide membership base and the direct-writer model allow the company to pass savings that would otherwise be spent on agents on to members through lower rates, Presley said. "And the best way to do this is by going direct," she said. Advertising comprises only a small portion of the company's marketing strategy USAA currently advertises products and services in a few military publications, such as Stars and Stripes Stars and Stripes nickname for the U.S. flag. [Am. Hist.: Brewer Dictionary, 8567] See : America and the Army, Navy and Air Force Times publications, and has no advertising exposure in television and radio due to the lack of military media outlets. USAA has recently begun extending its advertising reach to several military Web sites. All marketing strategies are based on USAA's core values--loyalty, honesty, integrity and service--and its 80-year dedication to its nearly 4.8 million members, Presley said. "Our overall intent from a marketing strategy standpoint is to join members' conversations. Whatever is going on in their minds, such as their concerns, worries and joys, we want to help take them to the next logical solution to remove the burdens facing them," Presley said. This sequence, or "connect-the-dots" approach as Presley calls it, is also faring well for the company's Web site. While little advertising is found on the usaa.com site, members are able to enjoy the convenience of services, such as obtaining information on how to buy, finance and insure a car, at the click of a mouse. "While we don't have big media campaigns, we try to customize and tailor messages for members in a given segment during a particular life event they may be experiencing," said Presley. Cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. also is driving a new marketing push. Last year, the company made what it calls a smart decision to remove all in-house printing of direct-mail materials. "Now that we're into highly targeted, segmented mail, spending money internally to keep up with available capabilities didn't make sense," Presley said. In addition, difficulty in obtaining proprietary software from printing companies made in-house printing an even greater challenge. "In order to stay competitive and keep up to speed with segmenting, we started to do complete outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of these tasks, which involved selling in-house equipment and redeploying employees as much as possible," she added. Until that point, the company outsourced nearly 85% of its marketing print projects. The company plans to continue with its current marketing strategies and is optimistic that word of mouth by millions of satisfied members will continue to drive its success. "Our motives are to cater to members--not to market to them. And as long as we continue to behave in that manner, this [approach] remains our biggest strength," said Presley. Years of Eligibility Expansion Times have changed, but the USAA's focus on its niche market with the U.S. military remains the same. Eligibility requirements have expanded throughout the company's 80-year history, opening up eligibility to new military branches and family members along the way. 1922: USAA created for active-duty Army officers 1923: Active-duty Navy and Marine officers were extended eligibility 1924: Retired officers 1928: Reserve and National Guard officers on extended active duty 1931: Cadets and midshipmen at service academies 1935: Unremarried widows and widowers of officers 1948: Air Force officers and full-time USAA employees 1951: Reserve and National Guard officers, if retaining commission 1961: Adoption of slogan A slogan is a memorable motto or phrase used in a political, commercial, religious and other context as a repetitive expression of an idea or purpose. Slogans vary from the written and the visual to the chanted and the vulgar. , "once a member, always eligible" 1970: Retired reservist re·serv·ist n. A member of a military reserve. reservist Noun a member of a nation's military reserve Noun 1. officers drawing retirement pay 1971: Advanced ROTC cadets 1973: Former dependents of members and Reserve and National Guard ready-reserve, inactive in·ac·tive adj. 1. Not active or tending to be active. 2. a. Not functioning or operating; out of use: inactive machinery. b. and standby standby Medtalk adjective Referring to the immediate availability of a certain specialist–anesthesiologist, surgeon, who can be deployed in a medical emergency. Cf Concurrent. officers 1997: Enlisted personnel (USAA Casualty Insurance Co.) |
|
||||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion