Presentation on theme: "Jay Crook, Hieu Duong, Hải Lê, Christopher Muse."— Presentation transcript:
Jay Crook, Hieu Duong, Hải Lê, Christopher Muse
Began in San Antonio in 1922 when 25 Army officers decided to insure each other’s vehicles Founding values: service, loyalty, honesty & integrity 9,100,000 members Financial products for the US military and their families (active or retired) Some products available to public Not publicly traded https://www.usaa.com/inet/pages/about_usaa_corporate_overview_main
1922 Ford Model T Roadster Top speed of 45 mph. Price was $240.
1922 – 25 Army officers in San Antonio decided to insure each other’s vehicles 1936 – 60% of all US military officers are members 1961 – “Once a member, always a member.” Military officers can remain members after leaving the service. 1962 – USAA begins homeowner insurance 1963 – Life insurance 1970 – Mutual fund services 1983 – Federal Savings bank https://www.usaa.com/inet/pages/about_usaa_corporate_overview_history
1995 – Enlisted servicemen allowed to become members 1999 – Members can bank online at usaa.com 2003 – 96% of active duty officers are members, 44% of enlisted personnel are members 2008 – Car buying service 2009 – USAA the first mobile deposit for the iPhone 2009 – Membership open for all who ever served and their families https://www.usaa.com/inet/pages/about_usaa_corporate_overview_history
9800 Fredericksburg Road Photo from Google Earth
Insurance: GEICO Corporation MetLife, Inc. State Farm Mutual Allstate Nationwide 21st Century AAA American Family Farmers Liberty Mutual Progressive The Hartford Travelers Banking: Chase Ally Online Bank ING Bank Charles Schwab Bank Citi Bank Bank of America PNC Bank Capital One Huntington Bank SunTrust US Bank Wells Fargo Investment: Edward Jones Fidelity Investments Charles Schwab Franklin Templeton J.D. Power Wells Fargo Merrill Lynch Chase Investment LPL Financial UBS
The average entrepreneur can't start a large insurance company (low) Other financial services companies entering the market (banks or investment companies) Gramm-Leach-Bliley Act of 1999 removed barriers in the market among banking, securities and insurance companies (medium)
What can you do with your money? (Medium) Banking - putting it in a safe place, saving Investment - allow it to grow Insurance - protect against risks Do nothing - no plan (many uninsured motorists, young without life insurance, young without renters’ insurance)
Bargaining power of suppliers - (low) Suppliers of capital Underwriters changing companies Bargaining power of customers - (high) Insurance is very competitive and companies like to tout themselves as the best in quality and lowest in price Corporate clients have greater leverage power
"To facilitate the financial security of its members, associates and their families through provision of a full range of highly competitive financial products and services; in so doing, USAA seeks to be the provider of choice for the military community." https://www.usaa.com/inet/pages/about_usaa_corporate_overview_main
Experienced and disciplined management team Strategic position within the military Operational effectiveness of financial products Very strong and conservative financial management Great culture for employees Computerworld magazine named USAA No. 1 for third straight year in “100 Best Places to Work in IT” Q2 2012, USAA employed about 23,700 people
Industry-leading persistency, especially in military niche market Customer base now tops 9 million Loyal customers Four diverse financial areas of customer service A mutual reciprocal organization where the members own the company Profits are returned to members as annual dividends Everyone shares the risks and returns
USAA Insurance Group/Selected Statistics (Dollars in millions) Total revenue9, , , , , Net income1, , Combined ratio (%) Return on revenue (%) Total assets20, , , , , Statutory surplus11, , , , ,922.70
USAA Insurance Group/Competitive Position (Dollars in millions) Auto liability3, , , , , Auto physical damage2, , , , , Homeowners mult.p.2, , , , , Inland marine Allied lines Fire Other premiums Total net premiums8, , , , , Total change net prem
USAA Consolidated Financial Highlights (Dollars in millions) Revenues $17,558 $17,946 $19,036 Expenses 14,538 15,309 16,908 Net income 3,020 2,637 2,128 Assets owned 79,905 94,262104,352 Assets owned & managed137,288147,858162,169 Total liabilities 62,888 75,551 84,312 Net worth 17,017 18,711 20,040
USAA is called a "first" in the mobile banking market Mobile wallet Mobile app for used car buying
Limited market: Military, ex-military and military families (finite market niche) Charter of company prevents expanding beyond military in auto/home insurance Lawsuit: Trade dispute with Mitek about remote deposit technology regarding who owns what part of the technology Some disgruntled members posting angry messages to online consumer sites
Because of economic uncertainty, many people are looking for a sustainable financial budget Improve marketing campaigns to publicize USAA products that are open to the public Continue to expand mobile service as technology advances Recovering economy could increase investments and loans from members
Competitors (especially since Gramm-Leach-Bliley Act of 1999) Continued recession Government interference & regulations Government cutting military Military only focus May be viewed as monopoly and a national security risk Dependence on technology (hackers, internet access) Natural disasters: hurricanes, floods, fires, earthquakes, tornados, etc.
One of the worst years in US history Total cost for US was $35 billion in damages Killed more than 700 people Included: Devastating winter blizzard in the Midwest Over 300 tornadoes on April 27 in the Southeast Level five tornado in Joplin, Missouri Hurricane Irene on the East Coast Massive drought across the South
USAA is taking a conservative approach to company growth which is working very well. Do not change. Increase market presence by opening satellite locations in areas with high military populations. Identify partnership arrangements with military affiliated organizations that can funnel potential members to USAA. Improve marketing campaigns to publicize USAA products that are open to the public.
Jay Crook, Hieu Duong, Hải Lê, Christopher Muse