USAA was founded because naive underwriters thought Military Officers were 'high risk' and no one would insure them. It turned out, they are about the lowest risk people on the planet. And it turns out, their kids are also incredibly low risk. This is a self-selected community of people who are the most risk averse people on the planet. Because soldiers know better than anyone, getting killed, or getting those around you hurt, happens. But your entire ethos is centered around minimizing unnecessary risk. But, as was beaten into me by my West Point Dad, and into my West Point Sons, 'that which is foreseeable is not an accident'.
The underwriting profile was such, that USAA had far lower losses than their competition. So, they made a lot of money. They put half into technology, and half into over-the-top customer service, and personal relationships. They were World Class at both for 30 years.
Now the company, to me, is run by Peter Principal lightweight bureaucrats.
I am posting this letter I am now sending out to other insurance companies, to bid on a 4 generation, both husband and wife, 80-year relationships with USAA, in the hope that that an EVP forwards this to the board. The Company that was founded as an Association of Officers, looking out for each other, when no one else would, has become just another badly managed Fortune 500.
Dear XXX
Thank you for speaking with me today. By way of background, my grandfather, father, brother and son were or are Army Officers. My oldest son is an Apache Pilot and an AH64 Platoon Commander, and is a West Point grad like my father. My wife’s grandfather and father were Navy Officers, both Admirals, both Navy grads, and her brother was also an Officer. As such, my family has had a partnership with USAA over 4 generations and 80 years.
At the same time, many of us have done very well in business, and have complex financial situations. Whether we have outgrown USAA, or whether USAA just doesn’t understand our needs, the relationship has become unsatisfying to me. As an existing XXXX customer through the USAA Agency, I want to explore potentially moving my entire relationship.
Between myself, and Trusts I have created for my children, we have assets that are approaching $100 million. We have zero debt, and absolutely pristine personal and financial histories. At the same time, my business success is well known, and much of my net worth shows up in SEC filings as a byproduct of sitting on public boards and founding a $1 billion venture capital investment partnership. I have a big fat $ sign on my head, so my insurance needs fundamentally boil down to the Umbrella.
From an underwriting standpoint, I hold the highest government security clearances, have never been involved in any litigation, and have never had an at fault claim under any insurance policy.
