XML 37 R22.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Taxation | 12 Months Ended
--- | ---
Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Taxation | TAXATION Under current Bermuda law, RenaissanceRe and its Bermuda subsidiaries are not subject to any income or capital gains taxes. In the event that such taxes are imposed, RenaissanceRe and its Bermuda subsidiaries would be exempted from any such tax until March 2035 pursuant to the Bermuda Exempted Undertakings Tax Protection Act 1966, and Amended Acts of 1987 and 2011, respectively. RenaissanceRe Finance and its subsidiaries are subject to income taxes imposed by U.S. federal and state authorities and file a consolidated U.S. federal income tax return. Should the U.S. subsidiaries pay a dividend to RenaissanceRe, withholding taxes would apply to the extent of current year or accumulated earnings and profits at an expected tax rate of 5.0%. The Company also has operations in Ireland, the U.K., and Singapore which are subject to income taxes imposed by the respective jurisdictions in which they operate. Withholding taxes would not be expected to apply to dividends paid to RenaissanceRe from its subsidiaries in Ireland, the U.K., and Singapore. The following is a summary of the Company’s income (loss) before taxes allocated between domestic and foreign operations:
| Year ended December 31, | 2016 |  | 2015 |  | 2014 |
| Domestic |  |  |  |  |  |
| Bermuda | $ | 652,758 |  |  | $ | 511,114 |  |  | $ | 701,476 |  |
| Foreign |  |  |  |  |  |
| U.K. | (24,278 | ) |  | (22,712 | ) |  | (3,166 | ) |
| U.S. | (1,236 | ) |  | 12,523 |  |  | (10,977 | ) |
| Ireland | 964 |  |  | 188 |  |  | 1,549 |  |
| Singapore | 2,180 |  |  | (4,737 | ) |  | (2,018 | ) |
| Income before taxes | $ | 630,388 |  |  | $ | 496,376 |  |  | $ | 686,864 |  |
Income tax (expense) benefit is comprised as follows:
| Year ended December 31, 2016 | Current |  | Deferred |  | Total |
| Total income tax (expense) benefit | $ | (2,090 | ) |  | $ | 1,750 |  |  | $ | (340 | ) |
| Year ended December 31, 2015 |  |  |  |  |  |
| Total income tax (expense) benefit | $ | (3,471 | ) |  | $ | 49,337 |  |  | $ | 45,866 |  |
| Year ended December 31, 2014 |  |  |  |  |  |
| Total income tax (expense) benefit | $ | (699 | ) |  | $ | 91 |  |  | $ | (608 | ) |
The Company’s expected income tax provision computed on pre-tax income at the weighted average tax rate has been calculated as the sum of the pre-tax income in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. Statutory tax rates of 0.0%, 35.0%, 12.5%, 20.0% and 17.0% have been used for Bermuda, the U.S., Ireland, the U.K. and Singapore, respectively. The Company’s effective income tax rate, which it calculates as income tax expense divided by net income before taxes, may fluctuate significantly from period to period depending on the geographic distribution of pre-tax net income (loss) in any given period between different jurisdictions with comparatively higher tax rates and those with comparatively lower tax rates. The geographic distribution of pre-tax net income (loss) can vary significantly between periods due to, but not limited to, the following factors: the business mix of net premiums written and earned; the geographic location, the size and the nature of net claims and claim expenses incurred; the amount and geographic location of operating expenses, net investment income, net realized and unrealized gains (losses) on investments; outstanding debt and related interest expense; and the amount of specific adjustments to determine the income tax basis in each of the Company’s operating jurisdictions. In addition, a significant portion of the Company’s gross and net premiums are currently written and earned in Bermuda, which does not have a corporate income tax, including the majority of the Company’s catastrophe business, which can result in significant volatility to its pre-tax net income (loss) in any given period. A reconciliation of the difference between the provision for income taxes and the expected tax provision at the weighted average tax rate is as follows:
| Year ended December 31, | 2016 |  | 2015 |  | 2014 |
| Expected income tax benefit | $ | 4,856 |  |  | $ | 1,011 |  |  | $ | 4,725 |  |
| Tax exempt income | 4,487 |  |  | 4,939 |  |  | 671 |  |
| Transaction costs | (131 | ) |  | 3,654 |  |  | — |  |
| Change in valuation allowance | (924 | ) |  | 43,808 |  |  | (5,554 | ) |
| Non-taxable foreign exchange (losses) gains | (1,126 | ) |  | (1,897 | ) |  | 885 |  |
| Withholding tax | (2,578 | ) |  | (3,036 | ) |  | (327 | ) |
| Other | (4,924 | ) |  | (2,613 | ) |  | (1,008 | ) |
| Income tax (expense) benefit | $ | (340 | ) |  | $ | 45,866 |  |  | $ | (608 | ) |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
| At December 31, | 2016 |  | 2015 |
| Deferred tax assets |  |  |  |
| Tax loss and credit carryforwards | $ | 51,620 |  |  | $ | 40,512 |  |
| Reserve for claims and claim expenses | 26,265 |  |  | 29,833 |  |
| Deferred interest expense | 18,408 |  |  | 18,901 |  |
| Accrued expenses | 9,386 |  |  | 15,730 |  |
| Unearned premiums | 7,496 |  |  | 8,946 |  |
| Deferred underwriting results | — |  |  | 421 |  |
|  | 113,175 |  |  | 114,343 |  |
| Deferred tax liabilities |  |  |  |
| Deferred acquisition expenses | (7,485 | ) |  | (10,741 | ) |
| Amortization and depreciation | (3,605 | ) |  | (5,899 | ) |
| Deferred underwriting results | (2,964 | ) |  | — |  |
| Investments | (223 | ) |  | (1,479 | ) |
|  | (14,277 | ) |  | (18,119 | ) |
| Net deferred tax asset before valuation allowance | 98,898 |  |  | 96,224 |  |
| Valuation allowance | (18,776 | ) |  | (17,852 | ) |
| Net deferred tax asset | $ | 80,122 |  |  | $ | 78,372 |  |
During 2016, the Company recorded a net increase to the valuation allowance of $0.9 million (2015 – decrease of $43.8 million, 2014 – increase of $5.6 million). The Company’s net deferred tax asset primarily relates to net operating loss carryforwards and GAAP versus tax basis accounting differences relating to reserves for claims and claim expenses, deferred interest expense, accrued expenses, unearned premiums, deferred underwriting results, deferred acquisition expenses, amortization and depreciation and investments. The Company’s valuation allowance assessment is based on all available information including projections of future GAAP taxable income from each tax-paying component in each tax jurisdiction. Losses incurred within the U.S. tax-paying subsidiaries in the fourth quarter of 2011 were significant enough to result in a cumulative GAAP taxable loss at the U.S. tax-paying subsidiaries for the three year period ended December 31, 2011. The Company concluded that a valuation allowance was required from 2011 through the period ended December 31, 2014 based on the relevant evidence during that time period, primarily that the Company remained in a cumulative GAAP taxable loss position for this period, among other facts. As of December 31, 2014, the U.S. valuation allowance was $48.5 million. In the first quarter of 2015, as a result of expected profits in the U.S. based operations due principally to the Platinum acquisition, the Company determined it was more likely than not it would be able to recover a substantial portion of the U.S. net deferred tax asset and thus reduced the U.S. valuation allowance from $48.5 million to $1.0 million. Factors that led to this determination included the combined cumulative GAAP taxable income position of the Company’s U.S.-based operations (including the entities acquired) along with the future expected profits of the combined operations. A valuation allowance has been provided against deferred tax assets in Ireland, the U.K., and Singapore. These deferred tax assets relate primarily to net operating loss carryforwards. In the U.S., the Company has net operating loss carryforwards of $91.4 million. Under applicable law, the U.S. net operating loss carryforwards will begin to expire in 2031. In the U.K., Ireland and Singapore, the Company has net operating loss carryforwards of $90.9 million, $10.4 million and $7.6 million, respectively. Under applicable law, the U.K., Irish and Singapore net operating losses can be carried forward for an indefinite period. The Company had a net refund for U.S. federal, Irish, U.K. and Singapore income taxes of $1.1 million for the year ended 2016 (2015 – net payment of $10.3 million, 2014 – net payment of $1.1 million). The Company has unrecognized tax benefits of $Nil as of December 31, 2016 (2015 – $Nil). Interest and penalties related to unrecognized tax benefits would be recognized in income tax expense. At December 31, 2016, interest and penalties accrued on unrecognized tax benefits were $Nil (2015 – $Nil). Income tax returns filed for tax years 2013 through 2015, 2012 through 2015, 2015, and 2012 through 2015, are open for examination by the IRS, Irish tax authorities, U.K. tax authorities, and Singapore tax authorities, respectively. The Company does not expect the resolution of these open years to have a significant impact on its results from operations and financial condition.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration