Canadian Underwriter

Pethealth results show revenue growth despite loss

March 10, 2003   by Canadian Underwriter

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Oakville, Ontario-based pet insurer Pethealth Inc. (TSX Venture Exchange Tier 1: PTZ) posted record financial results for the year ending December 31, 2002. The company brought in total revenue of $3.66 million, a 146% increase over revenue of $1.49 million in 2001. However, the company posted a net loss for last year of $4.99 million, or $0.02 per share, versus a loss of $6.98 million, or $0.04 per share in 2001.
Gross written premiums (GWP) for the year were $9.43 million, a 179% increase over 2001, when GWP was $3.39 million.
New policy sales for 2002 were over 97,000, a 429% increase over 2001, when the company sold over 18,000 new policies. And total active policies at yearend were just under 70,000, versus 22,0000 at 2001 yearend.
For the last quarter of the year, revenue was up 152% to $1.21 million versus $482,000 in the last quarter of 2001. And year-on-year comparisons in GWP show $3.13 million for Q4 2002 versus $1.22 million in Q4 2001.
The company’s trouble is in acquisition cost per policy, which stood at $110 in Canada and US$115 in the U.S. The company estimates that its break-even point is US$70 per policy.
As of yearend 2002, the company had total assets of $7.46 million, including $5.05 million in cash.
“2002 marked a year in which the Company rolled out its pet insurance program throughout the United States, which included the establishment of the largest insurance program for adopted dogs and cats in North America,” notes president and CEO Mark Warren. He notes that several marketing and distribution plans were put in place to increase sales and lower acquisition costs during the year. “Increasingly we are being seen as the leaders in terms of product development and customer service as witnessed by the execution of recently announced partnerships with Progeny Marketing Innovations, MemberWorks, AGIA and Union Plus which, together with existing partners, are expected to make significant contributions in 2003.”

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