USAA (United Services Automobile Association) has provided its members with insurance and other financial services for more than 100 years. A group of U.S. Army officers formed the company in 1922 because they couldn't get auto insurance due to the belief that military members were a higher-risk group. It has been serving military members and their families ever since.
The company has expanded beyond auto insurance to provide other financial services to its members, including banking services and investments, such as mutual funds, retirement plans, and savings plans, like 529 plans. However, its commitment to providing quality financial products and services to members of the military (retired and active duty) and their families hasn't changed over the years. Its membership focus stems from USAA being a member-owned company.
Today, USAA serves more than 14 million members. You might be one of them and wonder how to invest in the company. Here's a look at everything you need to know about investing in USAA.
529 Plan
Is USAA publicly traded?
USAA is not a publicly traded company. It's a private company owned by its members. USAA has been a private company since its founding in 1922.
When will USAA IPO?
USAA didn't have an IPO on the calendar in late 2025. The private financial services company might never go public. It has been a private company since its founding in 1922. By remaining private, it can focus on serving its members instead of maximizing its profitability for outside shareholders.
Is USAA profitable?
The member-owned USAA reports its financial results to its members each year. It makes that information publicly available on its website.
USAA returned to profitability in 2023. Since the COVID-19 pandemic, several external factors have affected the company's profitability, including historic catastrophes, elevated interest rates, surging inflation, and banking sector turmoil. However, actions by the company's management restored its profitability in 2023.
The company reported $3.9 billion in net income for 2024 and total comprehensive income of $4.02 billion. Both represented significant improvements from 2023. USAA's strong year enabled it to return $2.2 billion to members, including paying policyholders $1.4 billion in dividends and distributions.
USAA's improving profitability and strong balance sheet ($221 billion in net assets across investments, premiums, and free cash) will enable it to remain a member-owned company. Its sound financial foundation will also allow the company to continue growing its business to provide members with more services in the future.
Alternatives to USAA stock
USAA isn't a publicly traded company, so you can't buy shares in your brokerage account. However, USAA members don't need to buy stock in the company to become an owner. They're already part owners because it's a member-owned company.
Although it doesn't issue shares to each member, they benefit from being part owners. One benefit of being a member-owner is that it entitles auto policyholders to receive yearly dividends. Members can have their auto dividends paid in cash or receive a credit on their auto insurance premiums. In 2024, USAA returned $2.2 billion to its members through distributions, dividends, bank rebates, and rewards.
Not everyone is eligible to become a USAA member (it's only open to U.S. military members and veterans and their spouses and children) and part-owner of the member-owned financial services company. However, you can invest in many other insurance stocks, whether you're a policyholder or not. Here are three top insurance stocks to consider buying if you're ineligible to become a member-owner of USAA:
Progressive
Progressive (PGR -2.37%) is the second-largest auto insurer in the country. It also offers home, motorcycle, boat, and other insurance products. In 2024, the company wrote $74.4 billion in net insurance premiums and made more than $8.5 billion in income. Progressive returns some of its profits to shareholders via a quarterly dividend.
Lemonade
Lemonade (NASDAQ:LMND) is a technology-focused insurance company that uses artificial intelligence (AI) to help lower costs and speed up the insurance process. The company offers renters, homeowners, car, pet, and life insurance to customers in the U.S., Germany, the Netherlands, France, and the U.K.
The company ended 2024 with more than 2.87 million members. Lemonade doesn't return money to shareholders via dividends. However, it enables policyholders to select a charity to receive some of the company's profits each year.
MetLife
MetLife (MET +1.20%) is one of the world's leading financial services companies. It provides insurance, annuities, employee benefits, and asset management services to clients in more than 40 global markets. In 2024, MetLife made more than $70.9 billion in total revenue. The company returns some of that money to shareholders through quarterly dividend payments.
How to buy stocks similar to USAA
People who want to invest in one of these publicly traded insurance companies can purchase shares in any brokerage account. Here's a step-by-step guide on how to invest in stocks.
- Open your brokerage account: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Shareholder
Once you complete the order page, click to submit your trade and become a shareholder in one of USAA's competitors. If it ever goes public, investors will follow a similar process when buying an IPO stock like USAA. If shares become available, fill in your brokerage account's order page with the insurance company's selected stock ticker and submit your trade.
The bottom line on USAA
USAA has provided its members with insurance and other financial products and services for more than 100 years. The member-owned company has a member focus. While not everyone is eligible to become a USAA member, anyone can invest in the insurance industry through a publicly traded insurance company or insurance-focused ETF.
Even though the sector has faced some stiff headwinds since the COVID-19 pandemic, which has affected its profitability, like USAA, many insurance companies are returning to profitability. The sector could make investors more money in the future through growing dividends and stock price appreciation.
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