USAA to Reduce Auto Insurance Rates by Average of 7 Percent; Fee for Extended Billing Option Eliminated

SAN ANTONIO--June 8, 2004--In 2004, USAA has already reduced, or has plans to reduce, automobile insurance rates by an average of 7 percent in almost all states. As a result, USAA auto policyholders will save more than $900 million in annual premiums over the next five years. USAA has approximately 3.6 million auto policyholders in the United States, and is the country's seventh-largest auto insurer.

"USAA's mission is to provide the best products at the best possible price for our members," said Henry Viccellio Jr., president of USAA Property and Casualty Insurance Group. "By improving operational efficiencies and establishing a range of insurance rates based on the individual risk, we're able to pass on savings to members."

USAA's move to lower rates bucks an industry trend. According to an Insurance Information Institute (III) forecast issued in March 2004, auto insurance rates are expected to increase an average of 3.5 percent in 2004. III expects most consumers to see an increase of $29 per vehicle, with a total average cost for auto insurance nationwide estimated at $871 for 2004. III estimates are based on U.S. Bureau of Labor CPI data, National Association of Insurance Commissioners data, company filings and trend projections.

USAA provides auto insurance in all 50 states. It has already reduced auto insurance rates, or has plans in place to lower rates this year, in the following 44 states:

Alabama         Alaska            Arizona         Arkansas
Colorado        Connecticut       Delaware        District of Columbia
Florida         Georgia           Illinois        Indiana
Iowa            Kansas            Kentucky        Louisiana
Maine           Maryland          Minnesota       Mississippi
Missouri        Montana           Nebraska        New Hampshire
New Mexico      Nevada            New York        North Carolina
North Dakota    Ohio              Oklahoma        Oregon
Rhode Island    South Carolina    South Dakota    Tennessee
Texas           Utah              Vermont         Virginia
Washington      West Virginia     Wisconsin       Wyoming

USAA also is eliminating its extended billing fee for members who opt to pay auto insurance premiums on a monthly basis in an effort to pass additional savings to members. This fee elimination, which will occur automatically without any required action from members, will save policyholders nearly $42 million annually.

USAA rate reductions will vary by location and coverage and may not be available in all locations. Average rate reductions assume no change in insured individuals, vehicles, coverages or benefits. Rates will not change for existing insured individuals until their policies renew. For more information, go to www.usaa.com.

USAA is a highly competitive financial services company known for its financial strength and outstanding service to its members. USAA owns or manages assets of $73 billion, and provides insurance, banking and investment products to more than 5 million members of the U.S. military and their families. Founded in 1922, USAA has 21,000 employees in its San Antonio headquarters and regional offices, and is widely recognized as one of the best places to work in America.

Automobile insurance products are provided by United Services Automobile Association, USAA Casualty Insurance Company, USAA General Indemnity Company and USAA County Mutual Insurance Company. Applicants for USAA automobile insurance must meet group membership eligibility requirements before purchasing for the first time. All applications for automobile insurance are subject to underwriting.