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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Components of income taxes attributable to operations
The components of income taxes attributable to operations were as follows:
Year Ended December 31,
202320222021
Current expense (benefit):
United States$251 $195 $284 
Non-U.S.37 6 11 
288 201 295 
Deferred expense (benefit):
United States(20)(96)(123)
Non-U.S.(1,141)(25)(44)
(1,161)(121)(167)
Income tax expense (benefit)$(873)$80 $128 
Schedule of income or loss before income taxes by jurisdiction
The Company’s income or loss before income taxes was earned in the following jurisdictions:
Year Ended December 31,
202320222021
Income (Loss) Before Income Taxes:
Bermuda$2,099 $986 $1,519 
United States1,239 401 643 
Other232 175 206 
Total$3,570 $1,562 $2,368 
Reconciliation of the differences between the provision for income taxes and the expected tax provision at the weighted average tax rate
A reconciliation of the difference between the provision for income taxes and the expected tax provision at the weighted average tax rate follows:
Year Ended December 31,
202320222021
Expected income tax expense (benefit) computed on pre-tax income at weighted average income tax rate$300 $110 $158 
Addition (reduction) in income tax expense (benefit) resulting from:
Investment income(14)(13)(24)
State taxes, net of U.S. federal tax benefit6 11 21 
Dividend withholding taxes9 11 12 
Change in valuation allowance4 (23)(40)
Base eroding tax9 8 — 
Share based compensation(13)(9)(5)
Tax credits(3)(10)— 
Change in tax rate(1,179)(5)— 
Other8 — 6 
Income tax expense (benefit)$(873)$80 $128 
Significant components of deferred income tax assets and liabilities
Significant components of the Company’s deferred income tax assets and liabilities were as follows:
December 31,
20232022
Deferred income tax assets:
Net operating loss$93 $77 
Discounting of net loss reserves219 78 
Net unearned premium reserve133 97 
Compensation liabilities64 55 
Foreign tax credit carryforward16 17 
Goodwill and intangible assets1,020 — 
Bad debt reserves16 17 
Depreciation and amortization133 141 
Lease liability31 27 
Net unrealized decline of investments89 193 
Lloyds year of account deferral— 1 
Fair value adjustment to senior notes41 — 
Other, net13 11 
Deferred income tax assets before valuation allowance1,868 714 
Valuation allowance(15)(7)
Deferred income tax assets net of valuation allowance1,853 707 
Deferred income tax liabilities:
Goodwill and intangibles— (39)
Lloyds year of account deferral(13)— 
Contingency reserve(50)(44)
Deferred policy acquisition costs(144)(64)
Investment related(13)(9)
Right-of-use asset(24)(21)
Total deferred income tax liabilities(245)(177)
Net deferred income tax assets$1,608 $530 
Summary of operating loss carryforwards
At December 31, 2023, the Company’s net operating loss carryforwards and tax credits were as follows:
Year Ended December 31,
2023
Expiration
Operating Loss Carryforwards
United Kingdom$198 No expiration
Ireland24 No expiration
Australia47 No expiration
Hong Kong32 No expiration
Gibraltar24 No expiration
Cyprus1 No expiration
United States (1)78 
2029 - 2038
Tax Credits
U.K. foreign tax credits10 No expiration
U.S. foreign tax credits6 2029 - 2033
(1) The Company’s U.S. operations have recorded $78 million of net operating loss (“NOL”) carryforwards that are subject to annual usage limitations under Section 382 of the Internal Revenue Code (“the Code”). The NOL limitations are related to acquisitions of the CMG entities in January 2014, Ventus Risk Management Inc. in August 2019, and Verifly Insurance Services, LLC, and Verifly USA Inc. in April 2023. In accordance with Section 382 of the Code, utilization of the acquired NOLs is limited to approximately $2 million per year through December 31, 2027, approximately $1 million through December 31, 2038, and $0.3 million thereafter.
Summary of tax credit carryforwards
At December 31, 2023, the Company’s net operating loss carryforwards and tax credits were as follows:
Year Ended December 31,
2023
Expiration
Operating Loss Carryforwards
United Kingdom$198 No expiration
Ireland24 No expiration
Australia47 No expiration
Hong Kong32 No expiration
Gibraltar24 No expiration
Cyprus1 No expiration
United States (1)78 
2029 - 2038
Tax Credits
U.K. foreign tax credits10 No expiration
U.S. foreign tax credits6 2029 - 2033
(1) The Company’s U.S. operations have recorded $78 million of net operating loss (“NOL”) carryforwards that are subject to annual usage limitations under Section 382 of the Internal Revenue Code (“the Code”). The NOL limitations are related to acquisitions of the CMG entities in January 2014, Ventus Risk Management Inc. in August 2019, and Verifly Insurance Services, LLC, and Verifly USA Inc. in April 2023. In accordance with Section 382 of the Code, utilization of the acquired NOLs is limited to approximately $2 million per year through December 31, 2027, approximately $1 million through December 31, 2038, and $0.3 million thereafter.
Reconciliation of the beginning and ending amount of unrecognized tax benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
December 31,
20232022
Balance at beginning of year$2 $2 
Additions based on tax positions related to the current year— — 
Additions for tax positions of prior years— — 
Reductions for tax positions of prior years— — 
Settlements— — 
Balance at end of year$2 $2 
Summary of open tax years potentially subject to examination, by jurisdiction The following table details open tax years that are potentially subject to examination by local tax authorities, in the following major jurisdictions:
JurisdictionTax Years
United States
2019-2023
United Kingdom
2021-2023
Ireland
2018-2023
Canada
2019-2023
Switzerland
2019-2023
Denmark
2019-2023
Australia
2019-2023