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Gleeson and Schacht each said that Hurley's estimates of the
reserves were reasonable. We find their analysis to be credible.
3. Kilbourne
Kilbourne analyzed Hurley's loss reserve reviews and the
reasonableness of petitioner's reserves for unpaid losses as
shown on its 1991 and 1992 annual statements.
Kilbourne averaged the four 1991 and 1992 yearend point
estimate results of Hurley's development methods with Hurley's
pure premium range, based on the facts existing at the end of
1991 and 1992. Kilbourne noted that the results of the four
development methods were clustered and that Hurley's reports did
not indicate that any method was preferable. Kilbourne concluded
that reasonable best estimates of petitioner's unpaid losses and
loss adjustment expenses at the end of 1991 and 1992 could be
made by averaging the four point estimate results of Hurley's
four development methods with his pure premium method range.
Kilbourne analyzed Hurley's loss reserve reviews as of the
end of 1991 and 1992. He concluded that Hurley's lookback
approach for selecting an initial estimate of ultimate loss for
the current year was flawed. He believed that Hurley's approach
essentially ignored the point estimate results and that Hurley's
ranges overstated petitioner's actuarially supported reserves for
1991 and 1992. He concluded that the best estimates of
petitioner's ultimate losses were $43,765,000 for 1991 and
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