This article was written by Phineas Upham
The United States Automobile Association was started in 1922 by a group of Army officers as a method to self-insure. It is a Fortune 500 company that offers diversified financial services that include banking and investing advice, in addition to providing insurance for military members that have been honorably discharged.
After three army officers found themselves in a high-risk insurance pool, they decided to try alternate methods to insure themselves. They formed a small company to do just that, and USAA has since expanded its services to include banking and insurance for members of the armed forces and their families.
It conducts almost all of its business through direct marketing, and retains no agents. It uses employees to close deals, and does most of its business either through the telephone or online.
The company name changed after its services were opened to include members from foreign military forces as well. The company has offices established in Frankfurt, Germany and London, England. In the 1960s, USAAs services expanded further to include home insurance, and then again to offer life insurance.
The company isn’t like most other companies on the 500 list. It caters almost exclusively to members of the armed forces, but serves the immediate families of those members as well. This includes National Guard and Reserve units in addition to primary branches of the armed forces. Although many of USAAs financial products are geared toward military members, investment and deposit-only banking services are available to non-members.
USAA currently employs more than 23,000 people in offices throughout the Continental United States.
About the Author: Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Phineas Upham was working at Morgan Stanley in the Media & Technology group. You may contact Phineas on his LinedIn page.