Debra S. Turner

USAA. USAA (United Services Automobile Association) is a worldwide insurance and diversified financial services nonprofit institution headquartered in San Antonio. The company began as the United States Army Automobile Insurance Association in 1922, when a group of twenty-five Army officers met at San Antonio's Gunter Hotel to discuss how to obtain automobile insurance despite the risk involved in the frequent moves necessitated by their military careers. The enterprise began as a member-owned organization, or "reciprocal-type interinsurance exchange" without capital stock, in which the members insured each other. Maj. William H. Garrison of the United States Army Signal Corps, who commanded an aviation repair depot that moved from Dallas to San Antonio's Kelly Field, served as first president. In 1924 the name was changed to United Services Automobile Association, when officers of the Navy and Marine Corps were allowed to join. USAA received its first Texas state license in 1925. Robert F. McDermott, a former World War II fighter pilot who held a master's degree in business administration from Harvard University, joined the firm as its chief executive officer on his retirement as a United States Air Force brigadier general in 1968. McDermott is credited with decentralizing operations and achieving functional integration, introducing automation, reducing employees, developing employee training, enhancing a corporate culture that stresses "service," and making the firm an industry leader through the use of information technology. He was long active in San Antonio community affairs, serving as Chamber of Commerce chairman, founder of the San Antonio Economic Development Foundation, cofounder and chairman of United San Antonio, founder of a mentor program for the city's schools, and founder of the Texas Research and Technology Foundation, targeted at making San Antonio a biotechnology center. He was a founder of the San Antonio World Affairs Council, a member of the board of directors of the Texas Department of Commerce, chairman of the Federal Reserve Bank of Dallas branch in San Antonio, and a member of the nation's Strategic Economic Policy Commission. Among USAA's principal subsidiaries is the USAA Life Insurance Company, begun in 1963, and USAA Annuity and Life, incorporated as a wholly owned subsidiary of USAA Life Insurance Company in 1979 to market annuities and assume or reinsure the annuity business of USAA Life. In 1992 this firm merged with USAA Life Insurance Company to form a larger, stronger organization. During Operation Desert Storm in 1991 USAA was one of only a few insurance companies that did not invoke a war clause to withhold insurance benefits from those who died in combat.

In the 1990s the company's goal, according to its mission statement, was to provide products and services to satisfy the financial security, asset management, and quality-of-life needs of USAA members and their families. The parent company, with assets of over $30 billion and seventy-five subsidiaries and affiliates, including the thirty-seventh largest life insurance company in the United States industry, offered credit cards, banking services, mutual fund and real estate investments, a travel agency, and retirement community to its 2.5 million membership, made up primarily of present and former military officers and their dependents. USAA had become the nation's fifth-largest insurer of private automobiles and fourth-largest homeowners insurer and was San Antonio's second largest corporate employer. The firm also ranked as the world's fourth-largest mail order company in terms of sales volume. The company did little or no national advertising and conducted business largely by telephone or mail rather than through independent insurance agents. With over 14,000 mostly female employees worldwide (9,200 in San Antonio), the company operated under a no-layoff policy, which it maintained even in the Great Depression, and offered a four-day, thirty-eight hour workweek. Company headquarters, completed in 1976 and located on 286 acres in northwest San Antonio, was one of the largest single-occupancy buildings in the country, rivaling the Sears Tower and the Pentagon. The corporation was noted for its quasi-military esprit de corps, leadership in integrating minorities into its work force, and the special features of its headquarters, including a library, small supermarket, counseling service, three artificial lakes, softball diamond, tennis courts, jogging trails, health club, health clinic, and seventy-five classrooms with 211 full-time instructors for training and job simulations.

Edward C. Dunn, USAA: Life Story of a Business Cooperative (New York: McGraw-Hill, 1970). Thomas Teal, "Service Comes First: An Interview with USAA's Robert F. McDermott," Harvard Business Review 69 (September-October 1991).

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The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this article.

Handbook of Texas Online, Debra S. Turner, "USAA," accessed December 05, 2019,

Uploaded on June 15, 2010. Published by the Texas State Historical Association.
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