Case Analysis – United Services Automobile Association

Topics: Automobile, Strategic management, Subsidiary Pages: 3 (594 words) Published: October 3, 2008
Case Analysis – United Services Automobile Association

Background

The United Services Automobile Association (“USAA”) was established in “1922 by 25 Army Officers to provide auto insurance to military officers” because such individuals incurred difficulty obtaining such insurance due their risk assessment. By 1988, the USAA expanded into other areas that comprised 32 wholly-owned subsidiaries. Eventually, the services were extended to all military officers and their dependants. In 1987, USAA membership comprised approximately 1.7 million people, with 98% of all uninformed commissioned officers eventually joining USAA.

Issues

1.Homogeneous business culture – 84% female, predominantly Caucasian, and high turnover of 44% with mostly clerical staff and limited management. 2.Decentralized operations (company expanded in 32 subsidiaries), inefficient (took days to locate files even with a special nightshift of 30 employees solely dedicated to locate filed), hostility between IS and other areas such as P&C (IS’s limited resources to the P&C, in that P&C though IS was calling all the shots about what IS would do and not do), mail delivery slow. 3.Hiring Expansion.

4.System standards for various product lines that strategically merge across business units.

Solutions – Merge IS into business operations

1.Employ IT to improve services (1969, purchased multicar policy processing system that reduced the number of individual policies, a new all-lines billing system was installed that replaced three separate customer billing systems, then in 1976, the Automobile Issue and Maintenance System automated most of the processing for the vehicles insurance business, and in 1979, an Automatic Claims Environment streamedlined the work of claims adjusters). 2.Create a paperless environment to eliminate wasted time and personnel hours, offer better customer service, and allow access to data company wide. 3.Reorganize IS with P&C regional V.P. that created a...
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