That year was the first time in the insurer’s 102 years that it failed to bring in a profit
The USAA insurance company has announced that it brought in a net income of $1.2 billion in 2023, following a rough 2022, in which it posted a net loss of $1.3 billion.
The figures were released this month
Even though the insurance company faced similar challenges that caused it to post a loss in 2022, it still managed to turn a profit. The 2022 losses were the first time in the long 102-year history of the insurer that it failed to be profitable. Among the struggles faced by the San Antonio-based insurer included high interest rates, inflation, and severe weather events that occurred in “above average” numbers.
Last year, it made the “difficult decision” to increase its homeowners’ and auto rates, said USAA CEO and President Wayne Peacock. He added that the raised rates were “necessary to ensure the association remains financially strong.”
The insurance company pointed to a number of other reasons it had to raise its rates
Among those reasons were the ongoing global conflicts occurring in the Middle East and Ukraine, as well as threats of government shutdowns, said the insurer’s 2023 annual report.
“We know these factors put a strain on household budgets and continued to drive up the cost to fix and replace cars and homes,” said Peacock in the report. On top of that, the insurance company also made efforts to reduce their operating expenses.
In 2022, the company brought in $28 billion in premiums. Last year, that figure rose to $32.2 billion. That said, it also returned “almost $1.9 billion to member customers through distributions, dividends and bank rebates and rewards.”
Returning to a profit
In 2023, the insurer reported a net income of 1.2 billion following the $1.3 billion net loss it saw the year before. In 2021, it had reported a net profit of $3.3 billion.
Last year’s revenue rose to $42.5 billion, which was an increase of 17 percent when compared to the $36.3 billion from 2022. According to the annual report, investment returns were also strong last year, having risen by 67 percent in 2023 when compared to 2022. This helped to bolster revenue further.
