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estimates to be significantly overstated. Petitioner’s rebuttal
expert, Hurley, concurred with key aspects of Kilbourne’s and
Otto’s criticisms of the AMI analysis and opined that if the AMI
analysis were adjusted to reflect certain of their criticisms,
the AMI point estimate for 1993 unpaid losses would be reduced to
$71,915,000–-an amount slightly below Tillinghast’s 1993 point
estimate.21 In light of Hurley’s conclusions, the AMI report
does not support petitioner’s add-ons to Tillinghast’s 1993 and
1994 point estimates.
Coopers never expressly opined that petitioner’s unpaid loss
estimates were reasonable. To the contrary, for each of the
years in issue, Coopers concluded that petitioner’s estimates of
its unpaid losses fell outside a reasonable range suggested by
Coopers’s in-house guidelines. Ultimately, Coopers decided to
21 To be more precise, James Hurley (Hurley) agreed with
Frederick Kilbourne (Kilbourne) and David Otto (Otto) that the
AMI report contained certain errors, the adjustment of which
would reduce the AMI point estimate by $4,875,000 to $82,544,000.
Hurley noted that if the AMI analysis were adjusted to account
for certain other of Kilbourne’s and Otto’s criticisms, which
Hurley opined involved “matters of actuarial judgment”, the AMI
point estimate should be reduced by $15,504,000 to $71,915,000.
Hurley did not expressly align himself with the actuarial
judgment of either AMI or Kilbourne and Otto. We note, however,
that Hurley computed the effect of a corresponding adjustment for
this issue, while declining to offer a corresponding adjustment
for another of Kilbourne’s and Otto’s criticisms of the AMI
analysis, which Hurley characterized as involving “purely
actuarial judgment”. We infer that Hurley recognized merit in
those criticisms raised by Kilbourne and Otto for which he
computed corresponding adjustments. Accordingly, to that extent,
we construe Hurley’s report as corroborating Kilbourne’s and
Otto’s criticisms of the AMI analysis.
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