Epi 1 - Changing the Menu: Ray Villaman’s Journey to Self-Insurance with CRMBC
[00:00:00] Ray Villaman: You know, it was a big surprise for me spending 25 plus years in the industry to realize and come to the conclusion that how little I knew about workman's comp and how I could be more involved and CRMBC opened my eyes to that.
[00:00:16] Kaya Stanley: Welcome to the self-insurance podcast brought to you by CRMBC. Every two weeks we are interviewing restaurant owners, industry experts, and brokers to explore the world of self-insurance for the California restaurant industry.
Hello and welcome to the self-insured podcast by the California Restaurant Mutual Benefit Corp. My name is Kaya Stanley and I am the CEO and the board chair for CRMBC, which happens to be California's only restaurant workers comp self-insured group. for California. And I'm joined here today by Ray Villaman.
Thank you for joining me today, Ray. Absolutely. And Ray is the owner of the Tahoe Restaurant Group. And if you've ever been fortunate enough to go to one of the resorts in Tahoe, you've probably eaten at one of his pizza restaurants or Azul Latin Kitchen.
[00:01:16] Ray Villaman: Perfect. Uh, hopefully, you know, we, we, uh, have a good reputation and hopefully we please a lot of guests.
[00:01:23] Kaya Stanley: Yes, you do. And the purpose of this podcast is that we know that as restaurant owners, [00:01:30] we typically spend, we pay the most attention to the things that move the needle for us. So usually that's food costs and menu and, uh, labor. We don't pay attention to work comp until it's a problem or there's an issue.
And since CRMBC, that's all we do is work comp and I'm an attorney. And for 22 years, that's all I do is work comp. So, I happen to, and CRMBC, we happen to know. All of the ways that worker’s comp really can have a huge impact on your bottom line, both ways. It can either, it can either cost you a lot of money, or if you're doing it right, it can save you a lot of money.
And the reason that we brought Ray in today to talk is because, one, Ray has forgotten more about running a restaurant than most restaurant owners will ever know. And yet, Workers Comp self-insurance wasn't on your radar until this
[00:02:22] Ray Villaman: year. You know, it was a big surprise for me, spending 25 plus years in the industry, to realize and come to the conclusion that How little I knew about workman's comp and how I could be more involved and CRMBC opened my eyes
[00:02:39] Kaya Stanley: to that.
And typically, what happens in restaurant because it's not a problem. So, it's a problem is that restaurant owners will just use the workers comp. Or sign up for the workers comp that their broker tells them to. They don't question it until maybe the CFO says, Hey, you know, you're losing a lot of money over here.
And what people don't realize and, and it's sort of [00:03:00] like a, um, even if you don't understand self-insurance, there's a reason why the largest companies in the world self insure. So, United Airlines, Southwest, uh, you know, Disney, Costco, Walmart, all of these companies are self insuring because it makes the most sense.
Because a traditional insurance company is, is like a casino. The casino always wins. And so, either you're paying your money into the profits of a big insurance company, or you're keeping it from yourself. And what a self-insured group does, and that's what CRMBC does, and that's what you just joined, is that we pool the resources of mid-size businesses so that we get all the benefits of self-insurance.
And that was the, you, you've kind of been drinking out of a fire hose in your learning about the benefits of joining a self-insured group this year. Well,
[00:03:48] Ray Villaman: you know, the big realization for me was, uh, after learning more about CRMBC and how it functions, how it supports restaurants, um, the, what dawned on me was I, I, with the support of CRMBC, will now be proactive in our workman comp cases versus reactive.
In the past, it's always been reactive, somebody slips and falls, now you've got to address it. Um, what happens for restaurateurs in the instances where, um, Did they really get hurt at work is in question, uh, versus a valid claim. That's always been a gray [00:04:30] area for a lot of restauranteurs, including myself.
And with CRMBC support, you drill down, you get into the nitty gritty, you uncover all possibilities. You're, you're not just. Taking the blanket, uh coverage in the past our workman's comp would be like, oh, we're we just need to pay it never questioning a thing. And so that's been uh, very Exciting for me because it's something new that I’m learning.
[00:05:00] Kaya Stanley: Yeah, that's one of the things that if you are not familiar with a self-insured group, a self-insured group is formed by the business owners in a specific industry.
So CRMBC was formed by restaurant owners for restaurant owners and only, only restaurant owners or people within the class code that fit within food and beverage are even permitted to be in the group. And, and one of the reasons why you joined was because of this control issue. So, when, when we have a situation where we think there's things look a little bit fishy, we will immediately hire private investigators to go out, investigate.
Our owners are able to go to the depositions. Our owners talk to the adjusters, our owners talk to the attorneys and in a traditional insurance company that just it just doesn't happen.
[00:05:48] Ray Villaman: I've never once been invited to a hearing. I've told the companies I'm available. We're willing to present ourselves.
Never have we ever [00:06:00] in 25, 30 years, uh, been involved with any one of these cases. So that, that was very, um, you know, eye-opening for me that This is a new revelation. So, which
[00:06:13] Kaya Stanley: brings us to how you actually ended up looking for the solution because you didn't find out until years later that you had an anomaly year with one anomaly claim that no one told you about until there was nothing you could do about it.
And then when you're in traditional insurance, there's something called an experience modification that years down the road, your rate is then goes up because of this. Anomaly. And you don't get to call the CEO of the traditional insurance company and say, Hey, can you look at this? And yet with us, you got to talk to me.
You got to talk to our underwriters. You talk to our administrator and tell us about that. You know,
[00:06:51] Ray Villaman: uh, I've, I've been fortunate. I've had a really Good, solid broker. And I was actually, uh, comforted when I made the switch over to CRMBC that my broker could still be involved. He's been a good guy, great guy, well known, and he fights for us, but he can't always get the carrier to do what he asks. And, uh, the stars kind of aligned when I started looking closely at this. Uh, there are largely three main reasons. Two of your board members are well respected, um, restaurant veterans [00:07:30] that, uh, I've known for 20 plus years. And I, I admire them and consider them, uh, close colleagues and, and, uh, mentors.
And so that immediately caught my eye. And so, when I started chatting with them, um, it became clear that I should look into it further. And then of course, our relationship, uh, years, years past, I kind of introduced you into the, into the industry, uh, your husband and was starting a restaurant. And, and, and so we had a very good relationship.
Um, What I didn't realize was, uh, The negativity around self-insured had always influenced me. So, I've only heard about, uh, self-insured groups that, uh, fell apart or didn't make it or, and like any industry there's, uh, valleys and peaks. And I was fortunate that coming on to CRMBC is currently experiencing that upward peak, peak portion of their growth.
And, uh, I was very, uh, comfortable making the switch because of those strong relationships. The group is actually strong enough to actually consider, uh, Potential dividends to its members. I've never received money back from one of my workman comp carriers ever. [00:09:00]
[00:09:00] Kaya Stanley: Exactly. That's one of the things too. So you're right.
Because when you send, that's why I always use the analogy that the traditional insurance company is like a casino because they, because, because you know, how casinos are, they have mathematical calculations to make sure that even if you win once or twice, they're going to win Over time and traditional insurance is the same way and when you pay your money in the money is going toward Their high rise office building in the financial district.
There's Super Bowl halftime commercial with the lizard You know all of the marketing and overhead and all of the stuff there their main goal is their shareholder That's who they are. That's who they feed and We, our whole goal and our whole board is all restaurant owners that are members of this group.
And so our number one goal all the way around is. the longevity, the success of our restaurant owners. And yes, we pay back dividends. When we have a surplus, we pay back dividends. And that's what's something that you would never see in a traditional insurance company.
[00:10:00] Ray Villaman: I think the third point that I wanted to emphasize for our group making this decision was This is a self-insured group that's focused on, uh, not ignoring the issues.
My, my previous carriers, if I, if I got three slips and falls in a year, they didn't care. They would just pay them out. Well, with CRMBC, now they're asking questions. They're monitoring. We can audit restaurant groups and say, [00:10:30] how can we get better? How can we be preventive? And we're always excited to learn more.
And what better? Group to be a part of that has this macro view of the restaurant world saying, Hey, you know, cuts and burns are on the rise because of these three pieces of equipment or whatever the case may be. I value the data and the information that your group could bring to the table for our team members.
[00:11:00] Kaya Stanley: And that goes back to, we can't be an expert in every part of our business, and restaurant in particular. This is just not something that, You know, we think about, but we do pay attention and also with the, um, with the data that we get from WCIRB. In fact, that was our last podcast and, and we can look at, okay, there's a rise to your point in this.
And then we have lost prevention people that we will send out to a restaurant when they need a little bit of extra support. Nothing's punitive with us. It's okay. Your, your claims are going up in this area. What can we do to fix it? We're not just going to hit you with a, you know, with an increase, unless, unless it's a member that just ignores us, then we will try to get their attention.
But we are, that's not our first line of defense. Our first line of defense is what's up, what's going on here. You know, is there a manager that, that is, does, is messing you up right now? And you as an owner don't even know about it, but we help ferret all that out.
[00:11:55] Ray Villaman: And for me, knowing that. CRMBC is [00:12:00] protecting the group.
Bad apples out of the barrel like it's normal natural course of business. I love the idea of CRM BC becoming stronger and stronger with some of the most respected well operated Top performing lowest workman comp claimed in the industry. That's the goal. Yeah, that's why I'm here That's why you know, I'm competitive.
I want to win CRM BC wants to win and it's feeling really good.
[00:12:32] Kaya Stanley: Yeah, it's, uh, it's also become a little bit of a, uh, a club where we share best practices. So, when we all get together, uh, to your point, these are some of the best operators in the state. And there's this sharing of ideas and best practices, and it's become a really, really close knit family.
[00:12:52] Ray Villaman: Yep, absolutely. Uh, I love the board that the way you've organized it and who they represent. I mean, uh, the average restaurateur is going to immediately recognize some of the top brands in California once they, uh, research
[00:13:07] Kaya Stanley: this group. Yeah. Thank you. So before we sign off. If you had any other restaurants out there that, uh, friends of yours who were, were, who were skeptical because they've heard about the assessment or they're skeptical because they're just not sure about self-insurance, what would you say?
[00:13:24] Ray Villaman: Well, first, it's going to start with their relationship with their broker. The broker is going to [00:13:30] tell them, Hey, what we have going is great. Just keep going. Don't fix what's not broken But the average restaurateur doesn't know that it really is broken if you're not involved and participating in improving making these improvements in your organization and uh your ability to fight Inappropriate workman comp claims.
That's just one example So I would say the first step is getting together with your broker and educating them with what this group is all about. Giving Kay a call, like talking with your team, because that's going to be a barrier. They're going to be like, oh, wait on what, what's going on. Hold on a minute.
And no, let's just take one step further. Just do some due diligence, check this group out. And then on your, as a, as a restaurant owner, I discussed it with my team. This is a new stage for us, a new, new, uh, way of operating. We have to be extremely, not that we weren't in the past, but I want to even a heavier focus on how we're operating and how we handle our workman comp claims, and how do we reduce those claims, and what can we learn from other operators.
And they were all on board. Obviously, the initial motivation was, uh, The quotes that I was receiving from workman's comp went [00:15:00] through the roof, right? They're just out of nowhere as you described I had one bad case a year ago And it all they look at is that experience bond and don't allow The insurance industry to dictate how you're going to operate right your business Find it CRM BC ask the questions and Control your own destiny with how you move forward.
[00:15:28] Kaya Stanley: And just to further explain that, the reason that we are able to look at that differently is in a self-insured group, we don't have ex mods. So, we had our underwriters and the principals of our, our administrator going into your operation meeting with you, talking about, and they were, they were looking into how you run your business.
You know, is this a, is this a pattern? What happened around this one case that was an anomaly? And because of that, Close interaction. We were able to not give you an outrageous rate. We gave you a rate that made sense and held that anomaly to the side. That is one of the key things that make that just sets us apart.
Hands down.
[00:16:12] Ray Villaman: Well, correct me if I'm wrong, Kaya, but each restaurant typically would receive some sort of grade, you know, looking at their past experience, that is going to predict future experience, probably. And, uh, You know, my hope is [00:16:30] that we're very selective and you know if you're a restaurant group out there that just is experiencing tons of Workman comp claims and things are kind of out of control.
I would say don't come to CRMBC. Absolutely. But if you're a quality restaurant group that's concerned about your culture focused on Treating your people. Well, uh being proactive This is the group for you.
[00:16:58] Kaya Stanley: Thank you so much, Ray, for coming today. Absolutely. And thank you for joining us on our self-insurance podcast.
And we'll keep bringing more and more information to you. If there's something that you want to hear about, you can always drop us a line at info at CRMBC.com. But we will see you next time. Thank you. Thanks, Ray. Absolutely. Thank you for joining us on the self-insurance podcast brought to you by CRMBC.
If there's a topic you'd like to learn more about, or if you have any questions, please email us at info at CRMBC. com. Make sure to subscribe, comment, like, and share, and please join us again in two weeks for more self-insurance insights.