NU Online News Service, April 8, 1:14 p.m. EDT
USAA in its annual report said net income declined by 77 percent or $1.443 billion last year, but the insurer noted it had an increase in net worth by 1.4 percent, to $14.6 billion from $14.4 billon in 2007.
The San Antonio, Texas-based personal lines insurer for military personnel said net income declined from $1.86 billion in 2007 to $423 million. USAA said it paid out $857 million in dividends, distributions, bank rebates and rewards.
It also noted that it has remained one of only two property-casualty insurers to retain the highest possible financial strength ratings from A.M. Best, Moody's and Standard & Poor's.
The company said it grew owned assets to $68.3 billion from $67.2 billion in 2007, increased membership by 385,000 to 6.8 million members, and had cut non-essential expenses while increasing employee productivity by 11 percent.
"In a very difficult year, USAA grew market share, maintained and enhanced our financial strength and net worth, and for the third year in a row," said USAA President and CEO Joe Robles.
"Our association is strong and growing, built on lifelong relationships with our members, conservative financial management and a culture of service," he said. "It's a business approach that's designed to endure the current challenges and to achieve even greater success when economic conditions improve."
USAA primarily reaches customers through large call center operations and online capabilities, including a new mobile Web platform that the firm said has seen 5.5 million logins in 2008.
USAA said it handled a record number of catastrophe claims in 2008 and reduced the time to resolve them through streamlined claims, call center and self-service processes.
The company said these and other customer service initiatives resulted in USAA maintaining an overall 94 percent customer satisfaction rating and 96 percent customer retention for the year.
USAA said in 2008 it launched an "aggressive cross-training program to deliver better service with fewer transferred calls and flexibility to meet evolving needs, such as ramping up in the event of a natural disaster."
The company said a focused military recruiting program resulted in hiring 472 employees with military experience, representing 21 percent of all new hires in 2008.
"In 2008, USAA served as a haven for its 6.8 million members, many under economic pressure, who expressed their confidence in USAA as their trusted financial partner–not just their insurer," said Mr. Robles. "We are better positioned than most in our industry to weather the current economic downturn while continuing to deliver the highest quality service and solid financial performance that our members expect."
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