THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, November 3, 1995 TAG: 9511030544
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 79 lines
In a few years, thousands of enlisted military personnel in Hampton Roads may be able to buy the same insurance that officers have had access to for decades.
United Services Automobile Association, a mutual insurance company established to serve officers only, has tentative plans to extend its auto, homeowners and renters insurance to enlisted personnel starting next year, a spokesman said.
There are about 100,000 enlisted men and women in Hampton Roads, given the Navy's huge presence and the area's several large Army, Air Force and Coast Guard bases.
The company will gradually phase in the extended coverage over a number of years starting late next year, said John Walmsley, USAA spokesman. It may start by only offering its products to enlisted personnel above a certain rank, such as chief petty officer in the Navy, he said.
USAA employs nearly 800 people at its Mid-Atlantic Regional Headquarters in Norfolk. That figure could swell as the center begins catering to the insurance needs of thousands more potential customers. The facility near the Norfolk International Airport was built with room to grow.
Walmsley declined to speculate on the potential for employment growth in Norfolk, except to say that no ``substantial'' expansion is planned.
Known for its very competitive rates, USAA boasts 2.8 million members. Besides officers, the San Antonio, Texas-based firm also insures retired officers and families of both active-duty and retired officers.
By extending eligibility to the nearly 1.3 million active-duty enlisted, USAA will be able to counter any pressure ongoing military downsizing has had on its membership.
USAA's current plan calls for offering its services to only active-duty enlisted personnel and not retired enlisteds or dependents that have grown and left the home, Walmsley said. Members' spouses and dependents can be insured through the member's policy.
USAA has continuously expanded its customer base since it was founded in 1922 to handle the auto insurance needs of Army officers. Before World War II, it added officers from other military services, retired officers, reserve and National Guard officers on active duty, widows and widowers of officers and military academy students.
In 1951, it accepted reserve and National Guard officers. In the early 1970s, retired reservists, ROTC cadets in their junior and senior years at college and former dependents and grown children of members were also extended eligibility.
USAA insures about 1 percent of the military's enlisted personnel as grown dependents of former members, Walmsley said.
USAA is expanding its customer base at a good time. As automakers build safer cars, casualty rates are expected to decline, analysts say.
Competition is at its peak, however, with insurers advertising as never before. Pricing is getting cutthroat as companies try to lure customers away from competitors.
USAA enjoys greater efficiency than many insurers because it has no extensive network of sales offices. Nearly all its transactions are processed by phone and mail by USAA service centers around the nation. The center in Norfolk serves members throughout the Mid-Atlantic region.
The expansion won't have any effect on the rates paid by existing members.
``If someone were to assume that enlisted drivers were a greater risk that would be inaccurate,'' Walmsley said.
Policies will be underwritten based on each individual's risk. USAA, with its strict underwriting standards, won't insure particularly risky drivers, Walmsley said.
USAA also sells life and health insurance and banking and investment services that are open to all buyers, but marketed only to members. ILLUSTRATION: [Color Photo]
MOTOYA NAKAMURA
The Virginian-Pilot
United Services Automobile Association, which opened its Norfolk
office in 1990, boasts 2.8 million members.
by CNB