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SWOT Analysis

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

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SWOT Analysis

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

  2. Company Information Jay Crook

  3. 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

  4. 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/

  5. 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

  6. 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 iPhone • 2009 – Membership open for all who ever served and their families https://www.usaa.com/inet/pages/about_usaa_corporate_overview_history

  7. USAA in San Antonio Photo from Google Earth 9800 Fredericksburg Road

  8. Industry Analysis Jay Crook

  9. Industry Analysis: Competitors

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

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

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

  13. 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)

  14. 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)

  15. 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

  16. Mission Statement Hieu Duong

  17. 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

  18. USAA Credo Services for the Services

  19. SWOT - Strength Hải Lê

  20. 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” • Q2 2012, USAA employed about 23,700 people

  21. 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

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

  23. 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 Total assets 20,231.70 21,963.30 23,160.90 24,755.40 27,077.10 Statutory surplus 11,699.90 12,904.50 13,479.50 14,545.70 15,922.70

  24. Strong Financial Position USAA Insurance Group/Competitive Position (Dollars in millions) 2006 2007 2008 2009 2010 Auto liability 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 Inland marine 115.8 127.9 139.2 148.1 159.3 Allied lines 101.7 92.8 104.1 135.7 156.1 Fire 89 95.2 104.3 120 136.5 Other premiums 172.6 116.8 133.8 148.5 153.3 Total net premiums 8,732.20 8,708.90 9,083.50 9,992.80 10,679.40 Total change net prem. 6.9 -0.3 4.3 10 6.9

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

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

  27. SWOT - Weakness Christopher Muse

  28. 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

  29. SWOT - Opportunity Hieu Duong

  30. 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

  31. SWOT - Threat Jay Crook

  32. Industry Analysis: Competitors

  33. 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.

  34. 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

  35. Recommendations Christopher Muse

  36. 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.

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

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