February 24, 2004

By: Jaime Hadie
Website: http://www.1st-in-pets.com

Veterinary Pet Services, announces 123.4 percent increase in 2002 net income

Veterinary Pet Services, Inc. , the parent company of Veterinary Pet Insurance and its subsidiary, DVM Insurance Agency, announced net income for the year ending December 31, 2002 of $2.3 million or $0.49 per diluted share, an increase of 123.4 percent compared to $1.0 million or $0.22 per diluted share for 2001. Gross premiums produced in 2002 grew to $64.2 million, an increase of 42.8 percent compared to 2001 gross premiums of $45.0 million.

VPSI's 2002 annual revenues increased by 36.6 percent to $37.5 million, compared to $27.4 million in 2001. The increase in annual revenues was largely due to higher gross pet insurance premiums produced. The company wrote approximately 125,800 new pet insurance policies in 2002 compared to 88,100 new policies in 2001-an increase of 42.8 percent. The number of policies renewed also increased in 2002. Approximately 155,500 existing policies renewed in 2002 compared to 112,800 renewal policies sold in 2001, for an increase of 37.9 percent. The average policy renewal rate for 2002 was 77.4 percent.20

VPSI's combined ratio (loss ratio plus expense ratio) improved to 105.3 percent in 2002 compared to 109.8 percent in 2001, a decrease of 450 basis points. The combined ratio improvement is due to a 140 basis point improvement in the company's loss ratio (total of all claims and claim settlement costs incurred), from 64.0 percent in 2001 to 62.6 percent in 2002. The expense ratio (total of all net commissions and general and administrative expenses) improved by 310 basis points in 2002, from 45.8 percent in 2001 to 42.7 percent in 2002.

The results were reported in the company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 15, 2003.

"I am very pleased with the growth of the company over the past year. The results indicate that more people understand the importance of health insurance for their pets. As veterinary care becomes more sophisticated, more people will need to rely on third party payment to help cover the costs," said Dr. Jack L. Stephens, founder and chief executive officer of Veterinary Pet Insurance.20

"Pets have become an increasingly important part of American families. A Veterinary Pet Insurance policy ensures pet owners will be able to provide the care that four-legged family member needs in case of illness or emergency," added Stephens.

VPSI announced on April 22, 2003 it had sold an additional $15 million of common stock. The company's largest shareholder, Scottsdale Insurance Company, a subsidiary Nationwide Mutual Insurance Company, purchased $9 million in common stock on April 14, 2003. The Iams Company, a subsidiary of The Proctor & Gamble Company (NYSE: PG), purchased $6 million in common stock on April 15, 2003. Of the total $15 million of common stock sold, $11 million has been contributed to strengthen VPI's statutory capital and surplus, as well as to support current and future growth plans.

Policies are available in all 50 states and the District of Columbia. Policies are underwritten by Veterinary Pet Insurance Company in California and in all other states by National Casualty Company, an A+15 rated company, in Madison, Wisconsin, and a Nationwide subsidiary. For more information, see pet training aids.

About The Author:

Jaime Hadie is a successful author and regular contributor to http://www.1st-in-pets.com.  Pamper your pet and get up to date information on pet health, food, accessories, behavior, gifts and toys.