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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2024
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,
| 2024 |  | 2023 |  | 2022
Current expense (benefit): |  |  |  |  |
United States | $ | 332 |  |  | $ | 251 |  |  | $ | 195 |
Non-U.S. | 65 |  |  | 37 |  |  | 6 |
| 397 |  |  | 288 |  |  | 201 |
Deferred expense (benefit): |  |  |  |  |
United States | (21) |  |  | (20) |  |  | (96) |
Non-U.S. | (14) |  |  | (1,141) |  |  | (25) |
| (35) |  |  | (1,161) |  |  | (121) |
Income tax expense (benefit) | $ | 362 |  |  | $ | (873) |  |  | $ | 80 |
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,
| 2024 |  | 2023 |  | 2022
Income (Loss) Before Income Taxes: |  |
Bermuda | $ | 2,611 |  |  | $ | 2,099 |  |  | $ | 986 |
United States | 1,438 |  |  | 1,239 |  |  | 401 |
Other | 625 |  |  | 232 |  |  | 175 |
Total | $ | 4,674 |  |  | $ | 3,570 |  |  | $ | 1,562 |
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,
| 2024 |  | 2023 |  | 2022
Expected income tax expense (benefit) computed on pre-tax income at weighted average income tax rate | $ | 424 |  |  | $ | 300 |  |  | $ | 110 |
Addition (reduction) in income tax expense (benefit) resulting from: |  |  |  |  |
Sale of subsidiaries/Bargain purchase option | (45) |  |  | — |  |  | — |
Investment income | (39) |  |  | (14) |  |  | (13) |
Change in tax rate | 12 |  |  | (1,179) |  |  | (5) |
Share based compensation | (11) |  |  | (13) |  |  | (9) |
Tax credits | (5) |  |  | (3) |  |  | (10) |
Base eroding tax/Alternative minimum tax | 5 |  |  | 9 |  |  | 8 |
State taxes, net of U.S. federal tax benefit | 4 |  |  | 6 |  |  | 11 |
Change in valuation allowance | 3 |  |  | 4 |  |  | (23) |
Uncertain tax position | 3 |  |  | — |  |  | — |
Dividend withholding taxes | 3 |  |  | 9 |  |  | 11 |
Other | 8 |  |  | 8 |  |  | — |
Income tax expense (benefit) | $ | 362 |  |  | $ | (873) |  |  | $ | 80 |
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,
| 2024 |  | 2023
Deferred income tax assets: |  |  |
Net operating loss | $ | 77 |  |  | $ | 93 |
Discounting of net loss reserves | 203 |  |  | 219 |
Net unearned premium reserve | 190 |  |  | 133 |
Compensation liabilities | 75 |  |  | 64 |
Foreign tax credit carryforward | 22 |  |  | 16 |
Goodwill and intangible assets | 1,034 |  |  | 1,020 |
Bad debt reserves | 15 |  |  | 16 |
Depreciation and amortization | 151 |  |  | 133 |
Lease liability | 32 |  |  | 31 |
Net unrealized decline of investments | 77 |  |  | 89 |
Fair value adjustment to senior notes | 41 |  |  | 41 |
Other, net | — |  |  | 13 |
Deferred income tax assets before valuation allowance | 1,917 |  |  | 1,868 |
Valuation allowance | (18) |  |  | (15) |
Deferred income tax assets net of valuation allowance | 1,899 |  |  | 1,853 |
Deferred income tax liabilities: |  |  |
Lloyds year of account deferral | (19) |  |  | (13) |
Contingency reserve | (27) |  |  | (50) |
Deferred policy acquisition costs | (143) |  |  | (144) |
Investment related | (43) |  |  | (13) |
Right-of-use asset | (25) |  |  | (24) |
Other | (6) |  |  | — |
Total deferred income tax liabilities | (263) |  |  | (244) |
Net deferred income tax assets | $ | 1,636 |  |  | $ | 1,609 |
Summary of operating loss carryforwards | At December 31, 2024, the Company’s net operating loss carryforwards and tax credits were as follows:
| Year Ended December 31,
| 2024 |  | Expiration
Operating Loss Carryforwards |  |  |
United Kingdom | $ | 146 |  |  | No expiration
Ireland | 26 |  |  | No expiration
Australia | 43 |  |  | No expiration
Hong Kong | 35 |  |  | No expiration
Gibraltar | 26 |  |  | No expiration
Cyprus | 1 |  |  | No expiration
United States (1) | 70 |  |  | 2029 - 2038
Tax Credits |  |  |
U.K. foreign tax credits | 14 |  |  | No expiration
U.S. foreign tax credits | 8 |  |  | 2029 - 2033
(1) The Company’s U.S. operations have recorded $70 million of net operating loss (“NOL”) carryforwards that are subject to annual usage limitations under Section 382 of the Internal Revenue Code (“the Code”).
Summary of tax credit carryforwards | At December 31, 2024, the Company’s net operating loss carryforwards and tax credits were as follows:
| Year Ended December 31,
| 2024 |  | Expiration
Operating Loss Carryforwards |  |  |
United Kingdom | $ | 146 |  |  | No expiration
Ireland | 26 |  |  | No expiration
Australia | 43 |  |  | No expiration
Hong Kong | 35 |  |  | No expiration
Gibraltar | 26 |  |  | No expiration
Cyprus | 1 |  |  | No expiration
United States (1) | 70 |  |  | 2029 - 2038
Tax Credits |  |  |
U.K. foreign tax credits | 14 |  |  | No expiration
U.S. foreign tax credits | 8 |  |  | 2029 - 2033
(1) The Company’s U.S. operations have recorded $70 million of net operating loss (“NOL”) carryforwards that are subject to annual usage limitations under Section 382 of the Internal Revenue Code (“the Code”).
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,
| 2024 |  | 2023
Balance at beginning of year | $ | 2 |  |  | $ | 2 |
Additions based on tax positions related to the current year | 1 |  |  | — |
Additions for tax positions of prior years | 2 |  |  | — |
Reductions for tax positions of prior years | — |  |  | — |
Settlements | — |  |  | — |
Balance at end of year | $ | 5 |  |  | $ | 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:
Jurisdiction |  | Tax Years
United States |  | 2019-2024
United Kingdom |  | 2022-2024
Ireland |  | 2020-2024
Switzerland |  | 2020-2024
Australia |  | 2019-2024
Canada |  | 2020-2024
Gibraltar |  | 2019-2024

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