SWOT Analysis

Jay Crook, Hieu Duong, Hải Lê, Christopher Muse

Jay Crook

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 RoadsterTop speed of 45 mph. Price was $240.

http://www.carstyling.ru/de/car/1907_ford_model_t/images/17337/

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 Deposite@Mobile, the first

mobile deposit for the iPhone 2009 – Membership open for all who ever

served and their familieshttps://www.usaa.com/inet/pages/about_usaa_corporate_overview_history

9800 Fredericksburg Road

Photo from Google Earth

Jay Crook

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

http://money.msn.com/auto-insurance/best-auto-insurance-companies.aspx

http://money.msn.com/auto-insurance/best-auto-insurance-companies.aspx

http://money.msn.com/auto-insurance/best-auto-insurance-companies.aspx

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

Hieu Duong

"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

Hải Lê

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

https://www.usaa.com/inet/pages/about_usaa_corporate_overview_financial_strength

USAA Insurance Group/Selected Statistics

(Dollars in millions) 2006 2007 2008 2009 2010

Total revenue 9,459.40 9,677.40 9,691.4010,338.2011,178.90

Net income 1,547.40 1,114.80 804.1 616.8 850

Combined ratio (%) 88.6 96.7 100 95.4 96.9

Return on revenue (%) 19.5 12.7 7.2 10.4 8.9

Total assets 20,231.7021,963.3023,160.9024,755.4027,077.10

Statutory surplus 11,699.9012,904.5013,479.5014,545.7015,922.70

USAA Insurance Group/Competitive Position

(Dollars in millions) 2006 2007 2008 2009 2010

Auto liability 3,204.30 3,237.30 3,380.00 3,700.10 3,997.80

Auto physical damage2,777.102,736.702,872.60 3,059.50 3,284.90

Homeowners mult.p.2,271.802,302.20 2,349.40 2,680.90 2,791.50

Inland marine 115.8 127.9 139.2 148.1 159.3

Allied lines 101.7 92.8 104.1 135.7 156.1

Fire 89 95.2 104.3 120 136.5

Other premiums 172.6 116.8 133.8 148.5 153.3

Total net premiums8,732.20 8,708.90 9,083.50 9,992.8010,679.40

Total change net prem. 6.9 -0.3 4.3 10 6.9

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 94,262 104,352

Assets owned & managed 137,288 147,858162,169

Total liabilities 62,888 75,551 84,312

Net worth 17,017 18,711 20,040

http://www.usaareporttomembers.com/financial_strength.html

USAA is called a "first" in the mobile banking market

Mobile wallet Mobile app for used car buying

Christopher Muse

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 http://www.epinions.com/reviews/finc-Insurance-All-USAA_Group_-

_Auto http://usaa.pissedconsumer.com/usaa-bold-faced-liars-201205243

20511.html

Hieu Duong

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

Jay Crook

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 historyTotal cost for US was $35 billion in damagesKilled more than 700 people

Included:Devastating winter blizzard in the Midwest Over 300 tornadoes on April 27 in the SoutheastLevel five tornado in Joplin, Missouri Hurricane Irene on the East CoastMassive drought across the South

http://www.globalpost.com/dispatch/news/regions/asia-pacific/japan/111229/worst-natural-disasters-2011

Christopher Muse

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