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Jay Crook, Hieu Duong, Hải Lê, Christopher Muse.

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Presentation on theme: "Jay Crook, Hieu Duong, Hải Lê, Christopher Muse."— Presentation transcript:

1 Jay Crook, Hieu Duong, Hải Lê, Christopher Muse


3 Jay Crook

4  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

5 1922 Ford Model T Roadster Top speed of 45 mph. Price was $240.

6  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

7  1995 – Enlisted servicemen allowed to become members  1999 – Members can bank online at  2003 – 96% of active duty officers are members, 44% of enlisted personnel are members  2008 – Car buying service  2009 – USAA Deposite@Mobile, the first mobile deposit for the iPhone  2009 – Membership open for all who ever served and their families

8 9800 Fredericksburg Road Photo from Google Earth

9 Jay Crook

10 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




14  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)

15 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)

16 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

17 Hieu Duong

18 "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."


20 Hải Lê

21  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

22  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


24 USAA Insurance Group/Selected Statistics (Dollars in millions)20062007200820092010 Total revenue9,459.409,677.409,691.4010,338.2011,178.90 Net income1,547.401,114.80804.1616.8850 Combined ratio (%)88.696.710095.496.9 Return on revenue (%)19.512. Total assets20,231.7021,963.3023,160.9024,755.4027,077.10 Statutory surplus11,699.9012,904.5013,479.5014,545.7015,922.70

25 USAA Insurance Group/Competitive Position (Dollars in millions)20062007200820092010 Auto liability3,204.303,237.303,380.003,700.103,997.80 Auto physical damage2,777.102,736.702,872.603,059.503,284.90 Homeowners mult.p.2,271.802,302.202,349.402,680.902,791.50 Inland marine115.8127.9139.2148.1159.3 Allied lines101.792.8104.1135.7156.1 Fire8995.2104.3120136.5 Other premiums172.6116.8133.8148.5153.3 Total net premiums8,732.208,708.909,083.509,992.8010,679.40 Total change net prem.6.9-0.34.3106.9

26 USAA Consolidated Financial Highlights (Dollars in millions) 2009 2010 2011 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

27  USAA is called a "first" in the mobile banking market  Mobile wallet  Mobile app for used car buying

28 Christopher Muse

29  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  

30 Hieu Duong

31  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

32 Jay Crook


34  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.

35 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

36 Christopher Muse

37  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.



40 Jay Crook, Hieu Duong, Hải Lê, Christopher Muse

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