Military insurer USAA is awarding its 34,000 eligible employees annual performance bonuses that are several percentage points lower than previous years.
USAA employees will receive 14.8 percent of their annual salary in a payout Feb. 7, the financial services giant said Monday. About 19,000 employees are based in San Antonio.
“Our employees make USAA special,” stated USAA CEO Stuart Parker. “This bonus reflects our deep commitment to serving members every day and for the long term.”
A challenging business environment in 2018 contributed to the lower figure, USAA officials stated, including catastrophe-related claims that surpassed $2 billion for the third year in a row, a more competitive marketplace, and growing regulatory requirements.
The performance bonus announcement is an annual tradition at the financial services company. In 2018, employees were awarded bonuses equal to 16.2 percent of their base salaries plus a one-time payment of $1,000. But the bonus has dropped slightly nearly every year since a high of 18.8 percent in 2009.
Earlier this month, USAA broke with its custom of offering no-interest loans to customers affected by a partial government shutdown. Responding to a backlash over that news, USAA announced it would donate $15 million to Coast Guard Mutual Assistance.
In November, USAA announced it had sold the company’s mutual fund and exchange-traded fund businesses to Ohio-based investment firm, Victory Capital Holdings. The acquisition was valued at $850 million and is expected to be complete during the second quarter this year.
Also in 2018, USAA eliminated 265 jobs in its banking division, with more than 100 of those positions located in San Antonio and recently relocated about 300 more of its tech workers downtown.
USAA officials said in September the company planned to double its charitable giving to nonprofits, targeting 60 percent of its philanthropy to military causes nationally, and to families in need, education, safety, and natural disaster recovery on a local level.
As of 2017, the company’s net worth was almost $31 billion. USAA is the eighth-largest property and casualty insurer in the U.S. in terms of direct premiums written ($20 billion), according to the National Association of Insurance Commissioners in 2017.
USAA’s latest financial results will be released during the second quarter, according to a spokesman, but early results show the company’s membership grew in 2018 by more than 400,000 members to 12.8 million, and returned nearly $1.8 million to members in the form of distributions, dividends, and bank rebates and rewards.
However, major hurricanes, wildfires, and severe storms in 2018 hit insurers hard and resulted in $2 billion in claims for USAA. The total cost of natural disasters globally came to $155 billion last year, according to the Zurich-based reinsurance company Swiss Re. In the United States, hurricanes Michael and Florence, the California wildfires, and Hawaii’s volcano eruption were some of the world’s most expensive disasters of 2018.
In addition to a performance bonus at the start of every year, USAA employees also are eligible for a bonus equal to one pay period that comes in their first paycheck in December just before the holidays.
The company’s growth plans for 2019 include new buildings in Tampa, Florida, and Plano, cities where USAA currently operates regional offices.
