A version of this article appeared in Risk & Insurance Magazine

The Disability Management Employers Coalition’s 2003 annual conference started off on the right foot with a keynote address by an executive with Dell, the computer firm. Dell has melded a vast deck of phone, computer and human assets into an integrated disability program. It reflects the company's service values. Nothing is left to chance, nothing too small to notice or fix. Problems are not solved so much as killed at birth.

If we look hard enough at minutiae, we can better predict losses. If we intervene early, we can prevent or break a pattern of errant behavior leading to losses. We can control these losses even though they may appear as random to actuaries sitting far away. Some risks appear random only until we find their secret.

We can find this happening in public safety, risk management, and even pastimes such as baseball.

In the area of policing, minutiae may be defined as illegal acts not worth the attention of a cop. Under Mayor Rudolf Guliani New York City Police Commissioner Bratton went after subway fare jumpers (theft of $1.50). Arraigning them in mobile units, the city prosecutors found that a third had open arrest warrants.

A consultant who does underwriting surveys for a multi-line insurer looks for subtle management defects that presage high losses in workers comp and business owner's insurance. Jon Coppelman says that the best single predictor of losses in small business is a manager not having a credible way of training replacements or additional workers.

An absence management and consulting firm, Nucleus, has studied incidental employee absences, so ephemeral that many payroll and attendance systems either aren't designed to record them or that supervisors paper them over. Like the employee who calls in at 9:13 to say he's unable to come to work due to fill-in-the-reason.

Nucleus reports that these overlooked absences can account for 40 % of total unscheduled absences for a workforce, and cost a lot more than a company's short term disability and long term disability programs. The firm says that an employer's experience with incidental absences is highly predictive of its LTD and workers compensation losses. It is as if incidental absences are major absences with training wheels.

How many workers compensation insurers know anything about the incidence of pain and discomfort preceding an injury claim? Probably about as many New York City cops who gave a hoot about fare jumpers, before Bratton changed the model of law enforcement.

Nucleus executive Larry O'Rourke, a former insurance underwriter, say actuaries could predict loss trends from small events that accumulate in short periods of time. Actuaries need to work with large sample of events. Contrasted to just a few years ago, personnel systems today can deliver vast and accurate databases of all classes of employee absences.

In the past it may have been impractical to assemble micro-incidents for actuarial study. Information technology has changed that. Today, incident recording is much easier. Wireless palm pilots will soon make it even easier. The average lost time compensable workers comp claim today is going ultimately to cost about $35,000 at the end of its life. If so much money were at stake, one would expect a lot of careful data collection and statistical analysis of contributing factors.

The scientist’s microscope reframed our view of the world. In the case of unscheduled absences, closer monitoring will yield insights into what is driving employee absence.

Baseball fans armed with PCs discovered the secret of that most prosaic of events, the walk. Historically, everyone viewed walks as a pitcher's failure. Some fans dug into the statistics, tested models of how runs are made, and found that walks are really batter successes, a result of good eyes at the plate. Walks lead to runs. Dan Miller an Aon consultant and baseball fan, says that the Oakland Athletics and Boston Red Sox are transforming game tactics and even player recruitment through laptop analysis of masses of data.*

Minutiae can be our friends, if we let them. Ignored, minutiae can hurt.

*The year after this column was written, the Red Sox won the World Series for the first time since 1918.