USAA announces layoffs

USAA announces layoffs | Insurance Business America

Insurance News

USAA announces layoffs

Cut jobs necessary to meet changing business needs, spokesperson says

Insurance News

By
Kenneth Araullo

Furthering the continuing trope of industry layoffs, USAA has announced the elimination of 220 positions as part of adjustments to align with evolving business demands, a company spokesperson confirmed.

Roger Wildermuth, spokesperson for USAA, declined to specify which roles are affected by the cuts. However, he noted that the company is actively hiring and has filled approximately 2,900 positions so far in 2024.

Wildermuth emphasized that the changes were necessary to maintain the health of the business and to ensure that the company continues to deliver competitive pricing to its members.

As part of the reductions, USAA said that it will provide support to the affected employees to assist them in finding new employment opportunities, both within and outside the company.

The layoffs at USAA follow a broader industry trend, with several insurers having also reduced their workforce due to underwhelming underwriting results, escalating claims costs, especially impacting personal lines insurers.

According to AM Best, industry dynamics such as advancing technology, consolidation, realignment strategies, investor concerns, and distribution shifts have all played roles in the layoffs. Last year, GEICO and Farmers Insurance also announced significant layoffs, shedding 6% and nearly 11% of their respective workforces.

Despite these challenges, AM Best noted that USAA is still a leading insurer in the United States, ranking among the top five writers of homeowners multiperil and private passenger auto insurance.

In 2022, USAA reported a significant financial shift, swinging to a $1.28 billion net loss from a net income of $3.37 billion the previous year, which was described as one of the most challenging operational periods in decades by USAA’s president and CEO Wayne Peacock and CFO Jeff Wallace.

Currently, USAA holds a Best’s financial strength rating of A++ (Superior), reflecting its strong financial stability.

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