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Why Is USAA A Typical Insurance Company?

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Case Analysis: USAA

Question: Is USAA a typical insurance company? List all reasons supporting your answer.

When USAA started in 1922, they were a property and casualty insurance company however, with time they expanded their services to their members and became a financial institution.

Their objective when starting the company was to provide auto insurance to military officers. In 1988, they owned 32 wholly-owned subsidiaries. Their main scope remained property and casualty insurance with automobile liability and damage insurance constituting over three-quarters of the company’s P&C business[1]. They also kept the membership limited to military officers and their dependents.

USAA is considered a financial institution for …show more content…

Due to the “centralized management of systems development” from the San Antonio office, the data systems support the “single USAA customer image,” and information is treated confidentially as the chief source of the organization[4]. USAA has decided to develop its IT infrastructure to better answer the demands of its members. By the 1980’s the company’s many divisions had started developing their own systems. McDermott saw the need to create an Information Services Division to integrate all the company’s systems and member information. His new vision of USAA is that the company is so integrated that members lose something of value when they go to a competitor”[5].

Question: Which factors contributed to USAA being a leader in the use of IT in its industry?

The USAA gradually emerged as a leader in the use of IT in the insurance industry because of the vision provided by its leaders, who deployed and upgraded appropriate IT systems for meeting the specific requirements of its members. McDermott upon his arrival decided the company wasn’t functioning to its potential with the high staff turnover as well as the paperwork which was impeding the employees to have the good information when needed.

The company’s growth was closely linked to its information system infrastructure. The company took the initiative to buy the “multicar policy processing system” in 1969 that enabled the company to offer discounts, reduce the number of

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