Not my father's (or Grandfather's) USAA

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.

Please sign-in to reply


USAA truly cares. I now expect to have to explain for an SCI renewal why I was reported after 40 years for getting one bad check paid to me. I have got 7 calls from 'the CEO's office' in the past week. The CEO's office has 200 people. I did not feel the love. My takeaway was they don't care if they fire me, or I fire them. Now, my TSI/SCI/FS gets f'd because USAA reported me as a bad actor to the government, because after 40 years, USAA in terms of underwriting, is not very good.


I say this in the context that all my 06 family and friends, the fancy guys, the Seals, Delta....they are not USAA. Yes, I will get another call from 'the CEO's office'.

I wondered about contact. Most times, a representitive posts something, in response to these types of posts. I thought that you would get a call. I am not surprised of a negative attack. That type of thing seems to be running rampant in our society and Government. But, man does not live by bread alone.

Well said. The problem is that they don't seem to be listening to the members. I quit USAA after 51 years.


This is what USAA always meant to me. These young men all could have gone to an Ivy. They are all young LT Apache drivers making $60k at great personal sacrifice. They are also likely to be rewarded later in life for their character and want USAA to be there for them when Karma happens in their careers. And they all inherited the USAA values, even if USAA did not. Skip to 49 minutes.



These kids in the band are all 01 and O2 Apache Pilots. All but one, West Point Grads. It's risky business. The ones with shiny Mustangs and Cow loans are literally living paycheck to paycheck as 23 year old Officers, as they owe USAA almost $1000 a month. An association of officers looking out for the next generation of citizen servants would have advised them at 20 to buy a used and sensible car, heck, would have used their network to find and finance it, and would have properly assumed that USAA would have advised them on what a 22-year-old Batchelor will pay in insurance for a high-performance car. The cow loan, without advice and mentorship, is no service to soldiers. 


USAA can say 'consenting adults' all they want, but USAA more than any corporation in America is supposed to have these KIDS backs, while they have ours. A product manager gets a bonus for writing high margin paper. But an SVP should be involved in this 'line of business' and do right by these kids. 




I totally concur.  It's been disappointing to watch USAA over the past four decades devolve from a very conservative, customer-oriented company to a large, clumsy, arrogant company.  Not only has the service tanked, the reputation has plummeted as well.  You mention your clearances, etc. -- which point to your understanding of the importance of our military leaders being solvent, able to manage their own financial affairs, and being able to withstand bribes and graft.  The officers who created USAA (and many since) were subject to loss of clearances, military discipline, and even dismissal if their financial affairs were NOT in order.  It has been heartbreaking to see USAA ['our family'] fined for potential criminal and/or civil offenses (for example, see: -- not what any senior officer would have "gotten away with" in past years.  I'm sure Wayne Peacock ( is a smart, flashy guy.  But I'm not sure why he thinks poor customer service, second-rate online services [critical to serving a young dispersed military/veteran/retiree population], and illegalities (that have cost 100s of millions of dollars) are becoming of a company founded on a solid core of duty, honor, service, and discipline.


But, I doubt USAA cares -- which is the problem.  Perhaps some of us need to reconvene at the Gunter Hotel and reorganize...

You are correct, no one at the top cares. And if they can ignore jagw's numbers, they never will. I had a good run and they did me well for over 25 years. My only regret is the family and all the young NCOs I encouraged to join. I can only hope they are paying attention.



I think this is just your classic case of getting fat and happy. And harvesting the good will of prior generations. As you noted. The perfect case study that shows how their values have tanked, is the 'Cow Loan'. Every Service Academy kid gets his 'free' $40k 'interest free' loan the first day of junior year. He goes and buys a Camaro. Its good paper for USAA....they dock his 2LT pay $500 a month for his 5-year obligation. But they don't tell that Cow, that a 21-year-old with a Camaro is going to also be paying $3k for his insurance.  


Every SGT at Bragg with a bunch of 18-year-old E1's is going to warn them away from debt, fancy cars, 'free money'. But USAA has turned it into a profit center. 

These boys, and this particular song, is what I was raised to believe in. And 'back then' and still today, they are my hero's. They all could be well on their way to Partnerships at Goldman Sachs. They choose to protect the weak.


The young LT's, USAA architects to put in financial chains with the fancy car loans. The 04-06 friends I have moved on and are at Navy Fed or Geico and have written USAA off. Thats not a good business model.