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Vsurance, Inc (OTCBB: VSUR)
Untitled Document
Vsurance, Inc. (VSUR) provides an array of pet insurance products and numerous web-based companion animal resource sites for pet owners. All of the Company's sales, marketing and insurance claims
processing are Internet-based. VSUR offers a unique online reference library of pet health resources, a pet ID and lost and found service, and a variety of insurance policies for pets.
Through its information sites, the Company also markets pet-related merchandise as an online affiliate of a leading pet products retailer, lost and found registration services (Pet ID tags), global positioning technologies for locating lost pets and liability, life, and health insurance policies for dogs, cats, horses and other pets. Further, the Company has a re-insurance arm, allowing it to be more flexible and innovative in its pet insurance product offerings.
A unique business model for marketing pet insurance via the Internet
VSUR's business model will position the Company as a leading provider of pet health insurance and related pet health information services to pet owners, veterinarians, animal healthcare professionals, and pet service providers through its public online portals. By drawing traffic to its Internet sites, the Company is able to cost-effectively market pet insurance products (they are the only company to offer life, liability and health insurance), as well as other pet-related products to site visitors. The Company generates revenues from:
- the sale of pet insurance plans; and
- the sale of advertising and sponsorship (vet pharmacy and care) products
Strong management team
VSUR's CEO, W. Russell Smith, developed the concept of insuring household pets (dogs and cats) and has been active in the pet insurance business for the last 12 years. From June, 1995 through April, 2000, Mr. Smith served as the President of Pets Health Insurance Agency, Inc. Since April, 2000, Mr. Smith has served as the President of Pets Marketing Insurance.com Moreover, Mr. Smith founded a significant pet related reinsurance company, which under his leadership became an important player within the pet insurance market with over 30,000 written policies per year.
Mr. Smith's experience includes policy enrollment, insurance administration, insurance claims management and database information systems.
Few competitors in a large, untapped pet insurance market
Only nine insurance providers compete in the US pet insurance market, consequently leaving this market largely untapped. Only about 2% of pet owners insured their animals in 2006. Of the nine insurance providers, VSUR has the best online exposure. This is an advantage that positions VSUR with comparatively low policy acquisition costs. One of the main challenges faced by pet insurance companies is the significant costs associated with marketing their services, resulting in high policy acquisition expenses.
Beneficial Resource Center Network addresses information needs of multiple audiences
The network of online portals that comprise VSUR's Beneficial Resource Center Network provide a wealth of information that enables animal owners to proactively manage their pet's health. The information and content address the needs of pet owners, veterinarians, pet service agents and insurance agents by providing them with comprehensive information on pet diseases, symptoms, treatment options, access to clinical reference sources, pet insurance plans, and communication with peers and avid pet lovers.
Growing traffic on VSUR's online portals
The Company commenced operations last year on a modest scale due to the fact that its public portals were still under development and testing. Since that time, online traffic on its sites has grown significantly. During the first six months of 2007, the number of visitors to the Company's VetpetMD portal exceeded all of the traffic in 2006, while traffic on other VSUR sites grew at double-digit rates on a quarter-over-quarter basis.
From this initial traffic, the Company attracted 1,036 policyholders. In addition, VSUR's network of associations, employer groups, and insurance brokerage partnerships continues to significantly grow, expanding its customer base and revenue potential.
Acquisition of Animal ID adds to revenue potential
The Company's recently acquired Animal-ID business provides livestock producers, feedlot owners, and others with an easy-to-use inventory control, tracking and management tool. Using RFID and GPS technology, Animal-ID can identify specific animals - cows, horses, and pigs - in the US, and track their movement over a lifetime.
Advertising will reach 55 million households
In May, 2007, the Company entered into an agreement to air television ads in selected markets that will reach approximately 55 million households. This advertising campaign follows on the heels of a feature story in the April 22, 2007, edition of Parade Magazine titled 'Should You Get Pet Insurance?" which discussed pet insurance programs and the costs of vet care. Parade Magazine reaches 32 million homes and has 74 million readers.
The Company is currently launching a National advertising campaign, in conjunction with Ashe Advertising, beginning early October, 2007. This National campaign consists of print, billboard, television, radio, and multiple online initiatives. The Company expects to increase its consumer and financial awareness dramatically over the coming months.
Rising veterinary care costs increase demand for pet insurance
The rising cost of veterinary care is causing more pet owners to consider the purchase of pet health insurance plans for their animals. According to the American Pet Products Manufacturers Association, the family dog makes an average of 2.7 visits to the vet each year and the family cat makes 1.8 visits. On average, dog owners spend $261 annually on veterinary care while cat owners spend $157. The percentage of households with veterinary expenditures of $1,000 or more has doubled in recent years. Rising costs for vet care are increasing demand for pet health insurance and rapidly creating a receptive audience for VSUR's products and services.
Pet market opportunity
According to APPMA, pet ownership in the US reached record levels in 2007, with 63% of all US households (approximately 71 million households) owning a pet. The US has the largest pet population in the world, yet only about 2% of US pet owners insure their animals. In contrast, 19% of pet owners in the United Kingdom and more than 48% of pet owners in Sweden insure their pets.
APPMA forecasts pet insurance industry revenues will rise from $80 million in 2002 to $500 million in 2010. Pet insurance 2006 premiums exceeded GBP300 million in the UK and $100 million in the US.
Americans now spend $41 billion a year on their pets. That's double the amount spent on pets a decade ago, with annual expenditures expected to reach $52 billion over the next two years, according to Packaged Facts. Approximately 50% of future spending will represent vet care and medical supplies. Veterinary Care remains the single largest pet expenditure, reaching $18 billion last year.
According to APPMA, people are treating their pets like family members. That means hotels instead of kennels, braces to fix crooked teeth, and designer label pet clothing. Pet owners are becoming increasingly demanding consumers who won't tolerate shoddy products or services, fueling robust growth for the entire pet care industry.

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