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. They also kept the membership limited to military officers and their dependents.
USAA is considered a financial institution for military personnel. They offer their members not only insurance products but also financial services (such as loans, credit cards, investment advice). Just as a financial institution the downturn in the Texas economy affected the value of some of its investments, particularly real estate. The company’s vision is to offer its members by the year 2000 insurance products, asset management (financial services products) and quality of life (e.g., a retirement community and travel services).
Therefore, USAA is not a typical insurance company, but the insurance branch of the company is still their main priority.
Question: Describe the role that IT plays within USAA.
The success of the USAA from a $200 million company in the 1960s to $11 billion empire in 1988 can be attributed to the implementation of “paperless environment” through integration of IT systems for faster processing of insurance policies and claims under a centralized automated system.
McDermott, upon his establishment as chairman and CEO of USAA in 1969 undertook to implement his vision of a “paperless environment”. His first step was to purchase a multicar policy processing system. This system was a success for the company and they were able to follow with...
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