United Services Auto Association
Founded in 1922 by a group of officers in the U.S. Army, the United Services Automobile Association provided auto coverage for the members of the group who were considered high risk by most agencies. Over time, the group expanded to cover other military members, as well as select federal employees, such as Foreign Service and federal investigative agencies and their families. The coverage has expanded similarly, now including many types of health and property coverage.
The company underwent even further expansion in the year 2000 when Hartford Financial Services offered them with a limited partnership. The company then began to offer coverage for small business owners of military families. Personal vehicle coverage has remained the primary business of the United Services Automobile Association, accounting for more than 95% of policies written in recent years.
A majority of USAA’s mail is via U.S. Mail solicitation. More than 80% of USAA’s customers are located in only four states namely: California, Florida, Texas, and Virginia. In spite of their focus on high risk clients, the United Services Automobile Association has established its name successfully and has largely maintained customer acquisition through direct contact methods.
USAA boasts of a high-retention rate of customers through low costs and targeted markets and has maintained a superior financial responsibility rating. Absolutely anyone who has served in the U.S. military, even Coast Guard, Reserve troops, families of military personnel and anyone who has held a USAA policy, is eligible for USAA insurance.
In addition to auto insurance, the company today is offering financial services including banking services where they claim to pay some of the highest rates available for various types of savings accounts. Military employees and their families can apply for loans, retirement annuities, and other traditional banking services.