COMPANY PROFILE -USAA
Business Sector :Banking and Financial Services
Operating Geography :USA, North America
About USAA :
United Services Automobile Association, known as USAA, is a diversified financial firm dealing in banking, investing, and insurance particularly for those people and their families who are currently a part of the United States Military and for those who have served in the past. It is a mutual company. The company headquarters are located in San Antonio, Texas. It is the country’s fourth largest home insurance company and fifth largest auto insurance company. It has offices located in 21 places across the country. On the global platform, it has offices located in London, UK and Frankfurt, Germany.
The company operates through its subsidiaries, the USAA Life Insurance Company, the USAA Investment Management Company and the USAA Federal Savings Bank.
USAA was founded in 1922 by a group of 25 military officials for getting mutual self-insurance as they were unable to buy insurance because of the nature of their job. Insurance companies rated them as a very high risk group. The company operates primarily through direct marketing; contacting customers via the internet or through phone calls. The company currently has around 12.8 million members. The company employs approximately 34000 employees as per early 2020 records. In 2018, the company ranked for the first time within the top 100 on the Fortune 500 list. It ranked #101 in 2019.
The company is known for their everlasting commitment to their customers and is always recognized for their outstanding services, financial strength and employee care. This is reflected through the mission statement of the company which reads, “To facilitate the financial security of its members, associates and their families by providing a full range of highly competitive financial products and services.”
USAA Revenue :
US$ 35.6 billion – FY ending Dec 2019 (y-o-y growth 13.3%)
US$ 31.4 billion – FY ending Dec 2018
Competitive Analysis of USAA
The SWOT analysis of USAA is presented below:
Strengths | Weaknesses |
1. Firm grip on niche market
2. First in customer service
3. Strong brand name and credit ratings
4. Technology innovations boosting performance
| 1. International growth restrictions
2. Disruptive and irregular financial planning
3. Minimal online presence and usage of social media marketing
|
Opportunities | Threats |
1. Expansion through key partnerships and alliances
2. Expanding membership audience via additional offerings
| 1. Cyber security concerns
2. Government policies and regulations hurting business
3. Economic fluctuations and plummeting interest rates
|
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Detailed SWOT Analysis of USAA
Strength
1. Firm grip on niche market: USAA serves only the military families of United States which gives them a very big advantage. The Company restricts its products and services to the target group only. When it comes to brand awareness, the $155 billion insurance has beaten all its competitors. According to Raddon research, 83% customers of USAA gets additional financial benefits. It was founded in the year 1922 by a group military personnel to insure each other’s cars. It has expanded into home and life insurance and mutual funds. As mentioned above the company only serves military families which gives the company a tremendous focus and lends it a great competitive advantage. Members who are the part of this company use a wide array of services such as including credit cards, checking accounts and saving accounts.
2. Technology innovations boosting performance: USAA offers many services including a mix of insurance, financial management, mortgage, and auto loan and banking services, all through virtual networks such as mobile devices and web. Most of the centers of the company are nearer to the military bases which are regulated through remote access technology and videos in order to expand the business at minimum cost. Now USAA is employing advanced technologies to facilitate one to one video, web bandwidth agility, data analytics, contextual web marketing and voice automated response. The online banking sites looks more like an app and the company is attempting to make the mobile phones and tablets to be the banking channels in their own way. 93% of USAA's total member base was digitally active in 2018. USAA members launched the organization’s virtual agent, EVA, 34M times in 2018. On a monthly basis, 2.2M members exclusively used mobile, a 27% increase over 2017. In 2018, USAA Labs had 7,600+ employee submissions and implemented 1,172+ new ideas for the benefit of members and employees. 87% of employees participated in employee innovation in 2018. USAA helped stall 13M+ cyber-attacks and prevented $11.1 million in fraud loss daily.
The remaining section of "Strength" is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
This section is available only in the 'Complete Report' on purchase.
Threat
This section is available only in the 'Complete Report' on purchase.
The PESTLE/PESTEL analysis of USAA is presented below:
Political | Economical |
1. Changes in regulations and government policies
2. Impacts of 2017 Tax Cuts and Jobs Act (“the Act”)
| 1. Performance of stocks, bonds and other investments
2. Inflation rate influencing pricing power
|
Social | Technological |
1. Marketing products based on demographic interests and suitability | 1. Digitization to improve customer communication
2. Use of disruptive technologies like BlockChain, AI and IoT, big data analytics
3. Embracing technological advancements
|
Legal | Environmental |
1. Lawsuits and litigations
2. Highly regulated by state and central laws
| 1. Climatic catastrophes hurting insurance revenues
2. Contributing to sustainability and conservation
|
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Detailed Pestle Analysis of USAA
Political
This section is available only in the 'Complete Report' on purchase.
Economic
1. Performance of stocks, bonds and other investments: Domestic equities fell sharply during the fourth quarter, leaving major indices with losses for calendar year 2018. The downward trend for stocks began in October on concerns that the U.S. Federal Reserve (the Fed) would exceed expectations with respect to the pace of interest rate increases in 2019. In addition, uncertainty surrounding U.S. trade policy, the U.S. government shutdown, and a softer outlook for 2019 economic growth and corporate earnings weighed on investor sentiment into year end. While the Fed raised the benchmark overnight lending rate by a quarter point in mid-December to the 2.25% to 2.5% range, the central bank signaled that, if anything, its rate hike plans for the coming year would most likely be scaled back. On the trade front, despite initial positive reports coming from the G-20 summit, investors questioned whether additional progress on trade would be made before the March 1 deadline. Lastly, as investors moved into more defensive sectors during the past three months, value stocks outpaced growth stocks. Against this backdrop, the USAA Growth & Income Fund posted disappointing quarterly performance. To worsen this, the novel corona virus pandemic spread in 2020 has sent global economies bleeding and USAA has no exception shielding from its devastating impact.
The remaining section of “Economic” is available only in the 'Complete Report' on purchase.
Social
This section is available only in the 'Complete Report' on purchase.
Technological
This section is available only in the 'Complete Report' on purchase.
Legal
This section is available only in the 'Complete Report' on purchase.
Environmental
1. Climatic catastrophes hurting insurance revenues: During the past five years, floods have wreaked havoc in every single state in the U.S.A — those marked low-risk were also not spared. As storms, floods and wildfires are getting worse, and USAA, which has an employee strength of 19,000 people at its North Side region and other local offices, has been battling to figure out a way to rise to this challenge. As per data shared by Insurance Information Institute, amongst the 10 costliest wildfires in U.S. history, as measured by insured losses, the top five occurred in 2017 and 2018. The most draconian was the devastating Camp Fire in Northern California in November 2018. Natural calamities scarred USAA’s results in 2018. Earnings dipped from $2.4 billion the fiscal before, even as revenue hit a record $34.2 billion, affecting USAA’s property and casualty business.
The insurer paid more than $2 billion in claims in 2018 for the Camp Fire and other wildfires, two hurricanes and other catastrophes. It was USAA’s third straight year in which claims stemming from natural disasters surpassed $2 billion. USAA, like all other major insurance players are mulling hiring more climate experts, changing their catastrophe models and pushing up premiums in higher-risk communities.
The remaining section of “Environmental” is available only in the 'Complete Report' on purchase.
On purchase the USAA SWOT & PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 4 hours might be caused.
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
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References used in USAA SWOT & PESTLE Analysis Report
1. USAA annual report 2019 - https://content.usaa.com/mcontent/static_assets/Media/mf_arpt_37732.pdf
2. USAA returning $800 million in dividends - https://communities.usaa.com/t5/Market-Commentary/Inflation-Report-Looming-Rise-in-Labor-Appear-Positive-for-Bull/ba-p/167515
3. USAA2018 Investment Outlook - https://communities.usaa.com/t5/Market-Commentary/2018-Investment-Outlook/ba-p/155345
4. USAA company website - https://www.usaa.com/
The detailed complete set of references are available on request in the 'Complete report' on purchase.
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