Goodby Florida

[lets-retire]

How much do you really want to know?  I can give you an explanation of how insurers make money and how that boils down to your specifics, but it might take a while.

It was more of a rhetorical question. The point was with a smaller group of customer's they easily stay in business, yet charge a lot less than many of the other national companies. If you look at the location of military bases many are in areas with high disaster probability. It would seem logical that many of their customer's are also living in the higher disaster areas.

 

[brewer12345]

It was more of a rhetorical question.  The point was with a smaller group of customer's they easily stay in business, yet charge a lot less than many of the other national companies.  If you look at the location of military bases many are in areas with high disaster probability.  It would seem logical that many of their customer's are also living in the higher disaster areas. 

Heh, actually USAA is a pretty monster big company. Not quite up there with Allstate and State Farm, but pretty damn big. And I suspect that most of their customers are stateside, and maybe even a majority are not active military.

 

[lets-retire]

Heh, actually USAA is a pretty monster big company.  Not quite up there with Allstate and State Farm, but pretty damn big.  And I suspect that most of their customers are stateside, and maybe even a majority are not active military.

You are correct. The point is was attempting, but obviously failing, to make with the military base comment was, that since there has to be some kind of relationship to the military to be eligible for USAA, it stands a good chance that many customers live near bases. There are the few who obtain USAA insurance then move away from the bases. Since you either must be in the military, be a military retiree, or the family member (with restricitons) to one of those two groups to be eligible your not going to see a lot of USAA customers in podunk Oregon, but you will see more of the other national companies. The big national companies are complaining that they can't make money because of the hurricanes, but USAA seems to have few problems, and they don't have a large presence in the cash cow of pudunk Oregon (I know they have volcanoes and earthquakes, this was just an illustration). Is USAA exempt from certain state insurance regulation because of the way they are organized?

 

[brewer12345]

No, they don't get a free pass on regulation because of their structure. And you may find that their rates will be going up in the next few years as catastrophe reinsurance pricing continues to trickle down to homeowners policies. Since USAA likely already has its reinsurance in place, they may be able to wait until next year to pound out the rate increases.

In auto, selection is the game. I bet a lot of the selection is already done for USAA just by virtue of who is allowed to join, plus they have additional data by which to segment their customers and price appropriately. Plus the fact that they are not in this business for the purpose of making a profit (being owned by its members) means that they have room to price aggressively if they choose to do so.

 

[lets-retire]

Plus the fact that they are not in this business for the purpose of making a profit (being owned by its members) means that they have room to price aggressively if they choose to do so.

Forgot about that part.

 

[Nords]

... since there has to be some kind of relationship to the military to be eligible for USAA, it stands a good chance that many customers live near bases.  There are the few who obtain USAA insurance then move away from the bases.  Since you either must be in the military, be a military retiree, or the family member (with restricitons) to one of those two groups to be eligible your not going to see a lot of USAA customers in podunk Oregon, but you will see more of the other national companies.

Logical but not the reality.

There are far more veterans than active-duty military. (It's the same type of pyramid problem as Social Security.) Most of USAA's members joined when younger but then left the service (or retired) and descended en masse on Podunk to raise their families & retire. The older USAA members have far more insurance products, too, so their revenue is a bigger part of USAA's income and USAA's service is oriented toward us ol' pharts.

USAA has been trying to change their focus (since their biggest customers are dying off at a fierce rate) but they're not there yet. Our kid will be a USAA member for life even if she never enters the military, but she probably won't be paying them any premiums for another decade.

You have your "company towns" like San Diego, Tidewater area, DC, Hawaii, and San Antonio, but most veterans/retirees are spread across the population (and the world). One of the problems with TRICARE base clinics/pharmacies and other military-retiree programs is that a big percentage of military retirees live too far away from bases (especially since BRAC) to conveniently use the benefits.

USAA has been getting severely hammered by hurricane claims in the southeast. (Pascagoula, Pensacola, New Orleans, & Mayport are big Navy towns, and the "Redneck Riviera" is a huge retiree area.) The difference is USAA's huge reserves, smart reinsurance, and ability to jack up premiums (or not refund excess premiums). They're also cancelling policies and starting to turn into claims pit bulls, although the veterans are pushing back.

 

[2soon2tell]

Nords,

I also served in Uncle Sams canoe club but only for three years during the VN years.
I have been a USAA member since 1969 and consider them to be an excellent company with low rates and good service. I've only had one questionabe experience with them and that was regarding paying for a rental car after my car was totaled.

2soon

 

[deserat]

Ahhh - USAA - not very happy with them as they had some questionable procedures when I moved to/from Germany and got married.....as for profit - oh yes they do make a profit - I get their financial report every year and see that they do *VERY* well. Also just got their proxy and looked at what they pay their board members - very nice as well. Sure wish I could be a board member and make an extra 6 figures a year for teleconference.....

They are claims pit bulls and will kick members of the family off the insurance plan in a heartbeat.

Deserat