It is no secret that United Services Automobile Association (USAA) is a large financial services company that many Servicemembers, veterans, and their families depend on for their money matters. USAA provides its 6.7 million members with banking, investment, insurance, financial planning, and other financial products. USAA continues to perform well during America’s current financial turmoil because of its financial strength, profitability, minimal debt, increasing net worth and assets, and high capitalization. I continue to get questions from readers and my Soldiers about how USAA is doing during these crazy times. Below is a list of the company’s highlights to ease your worried minds…
Insurance. Standard & Poor’s, the world’s foremost source of financial ratings, affirmed its Insurer Financial Strength Ratings of AAA for USAA’s Property & Casualty Companies and Life Insurance Companies. Standard & Poor’s provides credit ratings, indices, investment research, risk evaluation and data to the public about financial instruments. USAA’s AAA rating is the highest of 21 possible ratings and indicates that the company’s insurance business is extremely strong.
Unlike a lot of insurance sales people out there, USAA’s employees are paid only on salary, not on a commission basis. Because of this, their focus is on providing only the products and services that the company’s members need and not selling you expensive products that are unnecessary.
Banking. Bankrate.com evaluates the financial condition of banks around the country and assigns a 1-to-5 star rating with five stars representing its highest rating of sound banks. Bankrate.com looks at several key banking categories when it ranks banks. According to Bankrate.com, USAA rates a Star Composite Rating of 4 (grand total rating), an Earnings Rating of 4, an Asset Quality Rating of 5, a Capital Rating of 4, and a Liquidity Rating 5. The bank’s capitalization stands as a protection against loss for banking customers, creditors, shareholders, and the Federal Deposit Insurance Corporation (FDIC). USAA’s net worth has continued to grow this year and is well above its peers, and the bank’s capital exceeds federal requirements.
USAA has steadily increased its net worth which has more than doubled since 2000. According to Bankrate.com USAA reported $31.5 billion in total assets as of June 30, 2008. Their mortgage loans and deposits held by the institution, at that date, amounted to $13.2 billion and $27.3 billion, respectively. The company’s net worth, the difference between total thrift assets and liabilities, was determined to have been $2.78 billion, which was 8.83% of total assets.
You can view Bankrate.com’s entire Safe and Sound Report on USAA at their website. Remember that the data in the report is through June 30th, 2008, the last day of available data.
A Different Kind of Company. USAA is a member-owned association that is a crossbreed between a for-profit and non-profit organization. The financial giant exists only to serve its members, not to meet earnings-per-share targets, and profits from the company are redistributed back to its policy holders. USAA is a Fortune 500 company, one of the largest in America. It is also a private company that is not publicly traded on a stock exchange. This is a unique feature that allows the company to focus on its customers and their needs rather than pandering to stock analysts and institutional investors and obsessively focusing on meeting Wall Street expectations to the detriment of the company’s customers and stakeholders.
Disclaimer: I am a proud member of USAA and have been a customer for years. I wholeheartedly recommend the company and their services to members of the military and their families.
If you enjoyed this posting, you might also like these:
1. USAA Reassures Investors and Banking Customers of Safety, Strength, and Liquidity
2. People Who View Investing as a Gamble Will Never Get Ahead
3. How Long Will It Take the Stock Market To Rebound?