How PMIS’ Unplanned Plant Tour Identified–Then Eliminated–
Gaps in Manufacturing Liability with a Better Policy and Lower Premiums
Manufacturer: Ray Products Co. Inc, Ontario, California
Leadership: Brian Ray, President
Description: We are a custom plastic thermoformer. The company is 69 years old, and I’ve been here 20 years. It’s a third-generation business that my grandfather, Allen Ray, started in 1949 in Alhambra. Then my dad, Bruce Ray, bought the company in 1975, and ran it for over 20 years in Almonte. The company then moved to Ontario where we’ve been for 26 years. I’ve been with the company for 20 years.
Q: What’s one of the biggest challenges of running a family business?
It’s tough to run any business; then throw on top of that a manufacturing business; and throw on top of that running a manufacturing plant in California; and then throw on top of that the generational pressure! It’s rough sometimes!
When I worked for my father, before he passed away, we did such different things. He was the accounting/numbers/data person, and–don’t get me wrong–I love data, but I’m definitely not a CPA. I’m more of the sales/marketing/strategy guy. We did different things, and when family members have complementary skills, it works, and that dynamic worked great.
I’ve seen dysfunction in other companies where maybe the father or a son or siblings all do similar things. I don’t think that works because everybody will want to do it better than you, versus trying to do it right.
Q: After 69 years in business, you likely nailed down a lot of your processes. What attracted you to changing insurance providers to PMIS?
I was introduced to them by a friend of mine who runs a plastic machining company. I had been talking to him about the challenges I was having with our commercial liability and worker’s comp, so he suggested that I reach out to PMIS.
‘I gotta write checks anyway, I might as well
write them to somebody I like!’
Insurance, in my opinion, is always just one of those things you have to do. Most policies are all very similar in my mind. So, for me, it’s really about finding a group you can get along with. Basically, my mentality is, ‘I gotta write checks anyway, I might as well write them to somebody I like!’
But when PMIS came out, their approach was different. They work with a lot of manufacturing companies and have a manufacturing background. I could see they had an appreciation for the kind of business I run. We went through what they do, how they do it, what makes them a little different, and I was like ‘Okay, I get it.’
I don’t usually give plant tours to vendors initially because we may not end up not working together. But I thought our meeting was going well, and I was interested in what they had to say, so gave them a plant tour.
On the tour, Michael and Jonathan talked about raw materials and tooling and how long material is here before it’s converted, and once it’s converted, how long it’s stored before it ships—all factors that affect your liability policy.
Then we started talking about values, and as we were walking through all of that, they already had copies of my current policies and they were able to make some pretty significant suggestions about insuring certain things that maybe weren’t insured correctly. They were able to eliminate some gaps and exposures in our policies—just by touring the plant and talking!
They also gave me feedback on Ray Product’s plant layout and cleanliness–something they said they don’t see very often. That was funny to me because nobody knew they were coming. It’s just important to me to always run a very clean and organized plant. Michael and Jonathan have been to enough plants to form an opinion, so their opinion of my plant meant a lot to me. Not just to make me feel good about myself, but because I knew they were writing policies for other manufacturers’ plants, which required them to visit their plants and ask manufacturing-specific questions. So their opinion of my plant carried a lot of weight.
Q: How long did it take to get an insurance proposal?
They followed up right away and sent me a questionnaire–pre-populated with what they saw when they took my plant tour! I thought that was interesting because the questionnaire was very detailed and specific to manufacturing. It asked questions that I know about my business, but I didn’t think were important to anybody else.
Then they came back with a proposal, we both tossed questions back and forth, and then we wrote the policy. I thought it was a great process. It was easy, the insurance was less expensive, with better coverage. They identified areas where I had gaps, so I got some coverage I didn’t have before and we actually eliminated some coverage that was redundant. They wrote me a better policy, at a better price, and explained it in a manner that was great for a guy who’s running a plastics company and is not an expert on insurance.
Insurance is a big expense for our business. But it’s also a big opportunity to understand what we can do to reduce the cost. What can we do to improve the coverage? Make sure we’re covered correctly?
Q: Were there other surprises (good or bad) after you’d been working with PMIS for awhile?
Yes! I always kept my insurance in different ‘baskets.’ Workers comp and liability ‘over here,’ and health insurance ‘over there.’ I did that because I’d had bad experiences where everything was together, and then the relationship started to sour. When that happens, you have to move everything. So I just decided in my wisdom to keep everything separate.
Typically, key insurers and brokers come to you 3 days before everything is due to be signed and paid for. That’s not fair to me! PMIS came to me early for the renewal.
But I started to have challenges with my health insurance. PMIS was doing good on the workers comp and liability side, so when year 2 renewal came around for those policies, I saw how they did a nice job—meaning, they came to me with plenty of time.
Typically, key insurers and brokers come to you 3 days before everything is due to be signed and paid for. That’s not fair to me! How can I review and ask questions if I’m told, ‘Here’s your proposal Brian, sorry it took so long, but we need a check by Friday.”
I don’t do business that way with our customers, and I don’t appreciate when people that are servicing our business do that. What I liked about PMIS was that they came to me early on the renewal. I mean really early–like at 6 months we were having conversations. But then, I’m always emailing questions about the policy. They’ll just check in with me, make sure everything is the same, but, regardless, at 6 months before the renewal, they sent me an email saying, ‘Hey, let’s go through coverage that you currently have; let’s tell you some of the things that have changed; here’s what the industry is up to.’ All good stuff!
After that renewal in year 2, I initiated the conversation about PMIS’ health insurance. And they said, ‘We do a lot of health insurance underwriting, and we have a group that’s set up specifically for that,’ and that’s when I was introduced to Jeff Miller.
Q: What changed your mind about having all your insurance “in one basket?”
First thing I said to Jeff was ‘I don’t know, I don’t think is going to work. I don’t want to put all my insurance eggs in one basket. Yeah, PMIS is doing great job, but I would hate to do this and have it not go great, then all of sudden, PMIS might lose everything because of a falling out. Why disrupt what’s already going great?”
Ray Products pays increasingly more each year to provide health insurance to our employees and their families but the coverage we get continues to get worse, and the choices we offer aren’t as good as they used to be. I knew we could do better.
He was patient with me, because sometimes it takes me a long time to make big decisions. He suggested we go through the process of analyzing my healthcare and look at a PMIS proposal. Jeff said, ‘If it makes sense, then we can further the conversation. And if it doesn’t make sense, then we know we tried.’ I thought that was a good approach. No harm, no foul to having a discussion.
Ray Products pays increasingly more each year to provide health insurance to our employees and their families but the coverage we get continues to get worse, and the choices we offer aren’t as good as they used to be.
We’d been stuck in this renewal of health insurance being all about trying to find the lowest cost: What’s the best cost scenario and the best coverage for our employees, and, ‘oh look, it’s Aetna; we’re renewing with Aetna.”
I would just present to the employees ‘Aetna offers 3 plans, pick what you want.’ And our broker would come in and give a presentation and explain how the company would pay 75% for you and your family and you pay 25%–so pick wisely. That was kind of how it went down.
I knew we could do better! Jeff peeled back a lot and came back with different programs that I wasn’t aware of–plans I hadn’t heard of before. One was a California Choice plan, like a cafeteria plan, where I could present all the plans to my employees, and they can pick and choose. Do they want to go with Aetna, or do they want Blue Cross or Kaiser? In the past if I wanted to offer Kaiser, it was kind of all in, and I had to offer Kaiser to the whole company. California Choice allowed the employees to be exposed to many different insurers and many different plans and then they could pick based on co-pay, doctor visits, or their proximity to healthcare facilities.
This was unique!
Now it came with some issues, and when I challenged my old broker about why he never presented this plan to me, he told me it required a lot of paperwork and it was a cumbersome and tedious process. Okay, I get it, I understand that sometimes contracts are more difficult than others and good things aren’t always easy. But after a ton of analysis, we moved our healthcare to PMIS and the California Choice Plan.
Q: What do your employees think about this new healthcare plan?
So here I am, I’m like, ‘Hey, Ray Product employees, not only are we changing brokers, we’re going to change the plan we’re offering this year, and here’s why!’
Initially, it was scary because of the amount of information they had to absorb. But we had allowed enough time for Jeff to speak to the employees, present the information, and then come back again to take more questions. Anyone with specific concerns could call or email PMIS. We set hard dates internally for our documentation to have time to be reviewed in case we had to go back and make changes to make an early submittal for California Choice.
Jeff and his team came in, and they did the kick-off meeting, presenting fantastic information to every employee: How unlike in prior years where they only had choices within one carrier’s plans, this year they get to look at 8 or 9 different carriers and 2 to 4 plans within each one of those carriers!
Yes, it was a huge, huge undertaking. But it was also a huge opportunity to tell my employees how healthcare has become very complicated and costly, yet here’s a plan they can get more value from. The more they know about what things cost and what choices they have, I think the smarter and better they’ll get at managing their healthcare.
Q: What was the impact of having a new broker and a new healthcare program?
Fast forward to November of 2017: We met all the deadlines, everybody got all their insurance cards prior to the insurance kicking in December, which was awesome.
We basically turned our health insurance plan in a totally new and different direction. Now we’ll be able to start gathering data with our employees and ask, ‘What did you think of the plan that you’re on now? Did you like the choices? If you got Kaiser for the first time, did you like it? What did you like? What didn’t you like?’
Their answers will definitely play into our renewal later this year. Are we going to do the California Choice Plan again? Or will we look at just one carrier that the majority of people here were with that they really liked? That’s something we couldn’t do in the past using just one carrier and 2-3 plans. So kudos to Jeff and his team in getting that launched and done.
Jonathan was always checking in to be sure I was happy with the healthcare enrollment process because it was a risk for him: If the healthcare rollout wouldn’t have gone well, it would have reflected on the business that PMIS and Jonathan had already written. So I knew that he was in the background making sure that things were getting done. But Jeff was a very good communicator, so it went really, really smooth.
Q: After everything was implemented, what was your bottom-line assessment of the new plan financially?
Healthcare costs went up double digits for our renewal. But with the plan that we chose, we were able to reduce the increase to a single digit increase. In my opinion, we got a better plan, we offered better benefits to our employees and, even though we had an increase, it was a smaller increase then what my prior broker presented and if we had just done it the same old way. PMIS brought something to the table that I hadn’t seen before. That’s innovative.
Q: What advice do you have for other manufacturers looking for an innovative insurance plan?
Insurance is so complex that most manufacturers don’t take the time to dig in. They’re just accept, ‘Oh, another increase. Okay, I’ll pay it.’
But I look at it like this: ‘As the president of the company, are there things I can do to help us bring more value to our employees while keeping our costs controlled?’
PMIS brought those answers to the table, such as…
- Year-Round Communication—Even When There’s No Problems
Do you have an open line of communication with your current broker? The PMIS team not only talk to me, they communicate with everyone in my business about the various aspects of insurance—and not just when there’s a problem. They’re in touch consistently to ask, ‘How are things going?’ Or ‘Here’s a product that’s now available.’ Or ‘Have you taken advantage of this web portal?’
- Open To Suggestions
If I give my broker feedback about my business, but he always makes me feel like I’m an outlier who’s complaining, that’s not healthy for our relationship. But when I give PMIS feedback, they’re receptive. Collaboration is what it takes to be successful.
- Make it Easy for Me To Administer
Before I typically would get all my policies separately. Either in the mail, email, from the insurance carriers, the broker, even from the underwriter. I always felt like I had no idea what any of it meant or where they should go. I would just grab them all and I put them in a cabinet and hope I didn’t have to dig through them to find a specific policy.
Make sure whoever you use does it the way PMIS does it: The right way. They give you a binder which clearly indicates which sections are which. They give you easy access to the people in their office to call with questions. For example, Bridget is my primary contact and I can reach out to her via her email. Or often Jonathan is notorious for getting an email from me, and I get an answer at 2am, which leads me to believe he must be a night owl!
- Don’t be an Outlier
“Before I moved the workers comp, liability and health insurance to PMIS, I asked for references. I’m just one of those guys who called every one of them. In fact, I had long conversations with them because I wanted to know, what do you like about PMIS, and what didn’t work out? Did you have any frustrations? All their references checked out fantastic. Which tells me they’ve done a really good job of targeting the types of customers and industries that make sense for their business.
I want an insurance provider who can address some of the similar issues that manufacturing has and I think PMIS is really good at that.
I’ve had brokers in the past that sell more to retail, and that’s great, I love retail; I love going to Target. But if you’re insuring Target, and that’s the experience you want to talk to me about, your experience won’t match the issues I face as a manufacturer. I want an insurance provider who can address some of the similar issues that manufacturing has and I think they’re really good at that.
I don’t want to be an outlier–that customer that they have to handle differently than all their other customers. I don’t want to be their biggest customer or the only one in plastics or in Ontario. I don’t want to be any of those things because then they really can’t come to the table with a lot of previous experience to help me. I didn’t want to be their first customer using all their services, and I found I was none of that. Perfect.
Q: In closing, tell us your business philosophy and how that affected your decision making to change insurance providers.
“I have a table in my office that’s got 4 chairs. The reason I have 4 chairs is so that I can have meetings with supervisors or vice presidents, even customers when they come in. But in reality, I believe I’ve got a chair for me, a chair for my CPA, a chair for my attorney, and a chair for my insurance broker.
Those are the 3 critical roles that are way outside the scope of what I need to know to be effective in running my business.
About PMIS: When a prospective manufacturing client asks why they should partner with PMIS for their insurance and risk management needs, the answer is simple: We are Manufacturing Insurance Specialists. This is who we are and what we do. We are not generalist brokers who happen to write a few manufacturing accounts. We write more than 800 policies throughout Southern California as a result of our expertise, experience and longstanding relationships with insurance markets. This enables us to deliver affordable solutions to our clients that protect their property, assets, employees and reputation while reducing risk and costs. The bottom line: We walk the talk. You can see in the insurance solutions and programs we’ll create for you. Contact us at 855-910-5788.