‘Because of the common cause’

Retired U.S. Army Maj. Gen. Josue “Joe” Robles has spent nearly 20 years proving that tradition and innovation are not mutually exclusive terms.

As president and CEO of 90-year-old USAA, The American Legion’s preferred provider of financial services, Robles has helped successfully steer the company through one of the most turbulent times in U.S. economic history. As other major banks and insurance providers have staggered through the global recession, USAA has increased its member base, pioneered technological breakthroughs, and positioned itself as a model for customer service in a 21st century society that has grown ever more comfortable doing personal business over the phone and online.

Since January 2011, when the formal relationship began, tens of thousands of American Legion members have called the special toll-free phone number at 1-877-699-2654 or visited www.usaa.com/legion to purchase and receive USAA insurance and financial products and services.

As part of the relationship, USAA contributes to American Legion programs when Legion members or qualified dependents use the toll-free number or website to buy specific USAA products and services.
Robles, a decorated combat veteran and former commanding general of the U.S. Army’s 1st Infantry Division, says the preferred-provider relationship is off to a successful start because USAA and The American Legion share more than a business arrangement – they share common values, traditions, and confidence in a future guided by those who have worn the uniform and their families.

A Paid-Up-For-Life member of The American Legion, Robles recently spoke with The American Legion Magazine.

What were USAA’s expectations heading into its relationship with The American Legion, and how well have they been fulfilled?

From my perspective, results have exceeded expectations. When we signed the deal with The American Legion, we were joining a group of veterans, and people who advocate for veterans, that was unsurpassed. Among all the 200-plus groups who the Department of Defense says constitute the affinity groups of the veterans market, the Legion is the gold standard when it comes to advocating for and caring about veterans.

Oh, and by the way, the Legion was organized about the same time as USAA. The Legion was established in 1919, and we started doing business in 1922. We’ve been in business since then, as has the Legion. We really appreciated an affinity that shared our advocacy and love for veterans’ points of view. We have not deviated from our course, nor has the Legion.

Since USAA expanded eligibility beyond officers and former officers, and opened its doors to veterans who honorably served, how has USAA’s philosophy been affected?

I believe we are better for it. The change illustrated that there were a whole lot of people out there who were every bit as important for us to serve way back when who we just didn’t have the capacity to serve at the time. As a team, we made the decision to staff up and become an important force in the lives of veterans and their families. The first group we looked at was The American Legion. They look like us. They act like us. They share our same DNA. What a group to be aligned with!

So the big challenge was to build capacity to serve more members?

Yes. One of the things our members demanded of me, as CEO, was not to degrade our service or the quality of our products, or the competitiveness of our products. They didn’t want us to bring in a whole bunch of people too fast and degrade our service or operating capabilities. I promised them that we would stay focused on quality, we would stay focused on member satisfaction, and as more veterans who had honorably served became members, we would maintain that same high level of excellence.

As Legionnaires are joining USAA in greater numbers, what are they looking for?

I honestly think they are looking to us for, and should be looking to us for, financial advice about their future. How to prepare for and live in retirement. That is probably one of the biggest needs among many Americans today. We have a huge population of people like me – baby boomers – who are marching off to retirement at a pace of about 10,000 a day for the next 19 years. That’s the current prognosis. So when you have 10,000 people a day going into retirement who probably haven’t thought about or planned for retirement, and who most likely haven’t sought professional advice, their savings may be inadequate. They may not know how to preserve their savings and live within their means. They may not know how to get the income-producing assets they will most likely need in retirement. Presently, they want cash because they have bills to pay and groceries to buy.

I think the one of the best things we offer today, along with our many competitively priced products and services, is the ability to speak with individuals, assess their needs and provide them an opportunity to plan a financial future with a professional adviser.

How important is it for Legionnaires to help their children join USAA?

Very. Once a member, always a member. Once you establish membership by purchasing a USAA auto or property insurance policy, your children become eligible for membership. This is especially important now, when we have a lot of World War II and Korean War veterans who served and are becoming members of USAA through our affinity program with The American Legion. Their children may want to become members, and some are becoming members. It is working out exactly the way we thought and hoped it would.

USAA’s 2011 annual report was titled “Moments of Truth.” Why was that, and can you say what the 2012 annual report’s theme will be?

We used that title because we had our worst catastrophe-filled year in the history of USAA. We spent $1.4 billion last year settling claims for our members. That is not a small and insignificant number. There were a lot of hailstorms. There were fires in the West and the Southwest. There were floods in the spring. There were tornadoes. We saw nearly everything. The only thing we didn’t experience was a major hurricane.

Because 2011 was such an overwhelming year for our members, it was our moment of truth to be able to take care of them in one of their greatest moments of need. I like to say around our headquarters that when we have a catastrophe, a big fire, hailstorm or a hurricane, it’s our Super Bowl. It’s our Super Bowl because we get the chance to show our members how much we really care about them, and that we are going to do everything humanly possible to help them get back on track.

We try to settle member claims as quickly as possible. In fact, I was giving a presentation to our board, and I showed them a video of a member family outside of Dallas-Fort Worth, where the house was leveled. Within 72 hours, USAA adjusters arrived on site, assessed the damage, wrote them a check and put it into their hands. Within six weeks, that family was moving into a brand-new house to start a new life and leaving behind the pile of rubble. That’s a moment of truth. That’s our moment of truth! In many cases, we can settle a claim as fast as any, and faster than most, of our competitors.

What I would call the “new normal” is also a moment of truth. The world we knew before the terrible downturn that the global economy is changing. So we’ve got to continually be preparing for the future and helping our members do the same. It’s a different future than we thought it would be just a few years ago. To quote my favorite sports commentator, Yogi Berra, “The future ain’t what it used to be.”

We’ve got to think about the millennial generation. They have a different set of needs and wants than our generation does. They are all very technology literate. They like to do things on Facebook and Twitter. They also share our ambition and desire to do well. I know because I have one in my household.

USAA is planning for that generational and technological change, as well as whatever may happen from a global perspective.

How has USAA insulated itself from the troubles other banks and big insurance companies have experienced in recent years?

People ask me all the time, “What’s the secret sauce for USAA? Why are you so successful when everybody else is struggling in many respects?”

It’s a simple, three-part formula.

One part is the customer, or what we call members, who are honorable people who don’t try to rip us off, who pay their bills on time and who, when they have a problem, are willing to admit they have a problem.

The second part is our approximately 23,500 employees, who are focused on USAA’s mission, which is to be the provider of choice for the military community and facilitate their financial security. To take care of those families. I never have to raise my voice. I just say to them, “We’ve got to help our members ... in everything we do.” And our employees go off and take care of business.

And the third part is our incredible financial strength due to our efficiency and prudent financial management.

Are Legionnaires getting used to banking and doing insurance business over the phone and online?

Thirty-five years ago, people were saying, “You can’t sell insurance over the phone. You can’t do banking over the phone. You can’t do investments over the phone.”

And we said, “Oh yes we can.” If we are smart enough to use simple and easy-to-understand technology and business processes, and we have the goodwill of our members, we will be very successful.

We have proven what happens when you treat your customers right, have the membership’s interest at heart and tell them what to expect. And with this big technological boom, I think we have a gigantic head start. Some of our competitors are just now catching up, but we are pioneers.

For example, being able to deposit a check just by taking a picture of it on a smartphone and zipping it right into USAA Bank. People told me when I was a CFO, “That ain’t gonna work. No one is ever going to do that.” Well, we get deposits in the billions of dollars now on mobile. Not hundreds. Not thousands of dollars. Not even millions. Billions of dollars.

How do you see the relationship between USAA and The American Legion evolving?

Very positive. We are going to work really hard at continuing to build our relationship. We don’t assume anything. We don’t sign a contract and then just forget about it. Right now, about 50,000 members of The American Legion have joined USAA through the special toll free number (1-877-699-2654) and our Legion-dedicated website (www.usaa.com/legion). We have issued about 35,000 co-branded credit cards. We hope these numbers continue to grow. We are going to work hard, and we know The American Legion and its membership will continue to honor that hard work.

For us, this has been a wonderful relationship because of our common cause – veterans and their families – and because it makes good business sense for all.