SWOT Analysis Jay Crook Hieu Duong Hi L

SWOT Analysis Jay Crook, Hieu Duong, Hải Lê, Christopher Muse

Company Information Jay Crook

Name, Rank & Serial Number · · · 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

Car Insurance in 1922? 1922 Ford Model T Roadster Top speed of 45 mph. Price was $240. http: //www. carstyling. ru/de/car/1907_ford_model_t/images/17337/

USAA Company History · · · · 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

USAA Company History (cont. ) · · · 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 i. Phone 2009 – Membership open for all who ever served and their families https: //www. usaa. com/inet/pages/about_usaa_corporate_overview_history

USAA in San Antonio 9800 Fredericksburg Road Photo from Google Earth

Industry Analysis Jay Crook

Industry Analysis: Competitors Insurance: • • • • GEICO Corporation Met. Life, Inc. State Farm Mutual Allstate Nationwide 21 st Century AAA American Family Farmers Liberty Mutual Progressive The Hartford Travelers Banking: • • • Chase Ally Online Bank ING Bank Charles Schwab Bank Citi Bank of America PNC Bank Capital One Huntington Bank Sun. Trust 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

Customer Satisfaction – Auto Insurance http: //money. msn. com/auto-insurance/best-auto-insurance-companies. aspx

Customer Satisfaction – Home Insurance http: //money. msn. com/auto-insurance/best-auto-insurance-companies. aspx

Customer Satisfaction – Life Insurance http: //money. msn. com/auto-insurance/best-auto-insurance-companies. aspx

Industry Analysis: New Entrants 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)

Industry Analysis: Substitutes 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)

Industry Analysis: Bargaining Power 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

Mission Statement Hieu Duong

USAA Mission Statement: "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

USAA Credo Services for the Services

SWOT - Strength Hải Lê

Management and Corporate Strategy · · · 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” § Q 2 2012, USAA employed about 23, 700 people

Competitive Position · 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

Strong Financial Position https: //www. usaa. com/inet/pages/about_usaa_corporate_overview_financial_strength

Strong Financial Position USAA Insurance Group/Selected Statistics (Dollars in millions) 2006 2007 2008 2009 2010 Total revenue 9, 459. 40 9, 677. 40 9, 691. 40 10, 338. 20 11, 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 21, 963. 30 23, 160. 90 24, 755. 40 27, 077. 10 Total assets 20, 231. 70 Statutory surplus 11, 699. 90 12, 904. 50 13, 479. 50 14, 545. 70 15, 922. 70

Strong Financial Position USAA Insurance Group/Competitive Position (Dollars in millions) 2006 2007 2008 2009 2010 3, 204. 30 3, 237. 30 3, 380. 00 3, 700. 10 3, 997. 80 Auto physical damage 2, 777. 10 2, 736. 70 2, 872. 60 3, 059. 50 3, 284. 90 Homeowners mult. p. 2, 271. 80 2, 302. 20 2, 349. 40 2, 680. 90 2, 791. 50 Auto liability Inland marine 115. 8 127. 9 139. 2 148. 1 159. 3 Allied lines 101. 7 92. 8 104. 1 135. 7 156. 1 89 95. 2 104. 3 120 136. 5 172. 6 116. 8 133. 8 148. 5 153. 3 8, 732. 20 8, 708. 90 9, 083. 50 -0. 3 4. 3 Fire Other premiums Total net premiums Total change net prem. 6. 9 9, 992. 80 10, 679. 40 10 6. 9

Strong Financial Position 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 79, 905 94, 262 104, 352 Assets owned & managed 137, 288 147, 858 162, 169 Total liabilities 62, 888 75, 551 84, 312 17, 017 18, 711 20, 040 Assets owned Net worth http: //www. usaareporttomembers. com/financial_strength. html

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

SWOT - Weakness Christopher Muse

SWOT - Weakness · 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-20120524320511. html

SWOT - Opportunity Hieu Duong

SWOT - Opportunity 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 ·

SWOT - Threat Jay Crook

Industry Analysis: Competitors

SWOT - Threat 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. ·

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

Recommendations Christopher Muse

Recommendations 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. ·

Any Questions? Jay Crook, Hieu Duong, Hải Lê, Christopher Muse