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Taxation | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Taxation | TAXATION Currently, RenaissanceRe and its Bermuda subsidiaries are not subject to any income or capital gains taxes in Bermuda. A 15% corporate income tax is expected to apply to our Bermuda operations, except the Bermuda operations of our joint ventures and managed funds, starting in 2025 as a result of the enactment of the Bermuda Corporate Income Tax Act 2023 on December 27, 2023. The tax legislation includes a provision referred to as the economic transition adjustment, which is intended to provide a fair and equitable transition into the tax regime with respect to which the Company has recorded a deferred tax asset. The legislation also requires the Company to reverse certain transaction related purchase accounting adjustments in determining its taxable income, resulting in the recording of a deferred tax liability. The Company recorded a net deferred tax asset in the fourth quarter of 2023 of $593.8 million which it expects to utilize to reduce taxes paid predominantly over a 10-year period. The Company expects to incur increased taxes in Bermuda beginning in 2025. 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 has not accrued withholding taxes on the unremitted earnings of RenaissanceRe Finance to date as there is no intention to remit such earnings. The cumulative amount that would be subject to withholding tax, if distributed, is not practicable to compute. The Company also has operations in Ireland, the U.K., Singapore, Switzerland, Luxembourg, Canada and Australia 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 operations in Ireland, the U.K., Singapore, Switzerland, Luxembourg, and Australia. The following is a summary of the Company’s income (loss) before taxes allocated between domestic and foreign operations:
| Year ended December 31, | 2023 |  | 2022 |  | 2021 |
| Domestic |  |  |  |  |  |
| Bermuda | $ | 2,622,066 |  |  | $ | (672,950) |  |  | $ | 156,031 |  |
| Foreign |  |  |  |  |  |
| Singapore | 64,003 |  |  | 112 |  |  | 4,420 |  |
| Ireland | 1,730 |  |  | 6 |  |  | 101 |  |
| U.S. | 308,768 |  |  | (367,799) |  |  | (92,335) |  |
| Australia | 7,570 |  |  | (29,214) |  |  | 7,148 |  |
| Switzerland | (22,016) |  |  | (72,773) |  |  | (106,249) |  |
| Luxembourg | (16) |  |  | — |  |  | — |  |
| Canada | 2,040 |  |  | — |  |  | — |  |
| U.K. | 125,915 |  |  | (76,217) |  |  | (83,224) |  |
| Income (loss) before taxes | $ | 3,110,060 |  |  | $ | (1,218,835) |  |  | $ | (114,108) |  |
Income tax (expense) benefit is comprised as follows:
| Year ended December 31, 2023 | Current |  | Deferred |  | Total |
| Total income tax (expense) benefit | $ | (57,422) |  |  | $ | 567,489 |  |  | $ | 510,067 |  |
| Year ended December 31, 2022 |  |  |  |  |  |
| Total income tax (expense) benefit | $ | (3,078) |  |  | $ | 62,097 |  |  | $ | 59,019 |  |
| Year ended December 31, 2021 |  |  |  |  |  |
| Total income tax (expense) benefit | $ | (992) |  |  | $ | 11,660 |  |  | $ | 10,668 |  |
The Company’s expected income tax provision computed on pre-tax income (loss) at the weighted average tax rate has been calculated as the sum of the pre-tax income (loss) in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. Statutory tax rates of 0.0% in Bermuda, 21.0% in the U.S., 12.5% in Ireland, 23.5% in the U.K., 17.0% in Singapore, 19.7% in Switzerland, 24.9% in Luxembourg, 15.0% in Canada and 30.0% in Australia have been used. The Company’s effective income tax rate, which it calculates as income tax (expense) benefit divided by net income or loss 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 currently 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 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, | 2023 |  | 2022 |  | 2021 |
| Expected income tax benefit (expense) | $ | (103,963) |  |  | $ | 114,721 |  |  | $ | 53,093 |  |
| Nondeductible expenses | (535) |  |  | (508) |  |  | (334) |  |
| Reinsurance adjustment | 4,746 |  |  | (1,265) |  |  | (4,604) |  |
| Effect of change in tax rate | (729) |  |  | 7,461 |  |  | 14,904 |  |
| Transfer pricing | — |  |  | — |  |  | 224 |  |
| GAAP to statutory accounting difference | (1,781) |  |  | (6,019) |  |  | — |  |
| U.S. base erosion and anti-abuse tax | — |  |  | — |  |  | (1,725) |  |
| Withholding tax | (1,078) |  |  | (2,154) |  |  | (1,013) |  |
| Recognition of Bermuda net deferred tax asset | 593,765 |  |  | — |  |  | — |  |
| Change in valuation allowance | 45,192 |  |  | (62,133) |  |  | (42,819) |  |
| Foreign branch adjustments | (25,908) |  |  | 11,656 |  |  | (5,491) |  |
| Other | 358 |  |  | (2,740) |  |  | (1,567) |  |
| Income tax benefit (expense) | $ | 510,067 |  |  | $ | 59,019 |  |  | $ | 10,668 |  |
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, | 2023 |  | 2022 |
| Deferred tax assets |  |  |  |
| Tax loss and credit carryforwards | $ | 197,498 |  |  | $ | 185,741 |  |
| Unearned premiums | 68,408 |  |  | 46,579 |  |
| Reserve for claims and claim expenses | 95,685 |  |  | 39,536 |  |
| Deferred finance charges | 19,442 |  |  | 19,309 |  |
| Deferred underwriting results | 9,373 |  |  | 10,481 |  |
| Accrued expenses | 2,849 |  |  | 2,233 |  |
| Investments | 37,044 |  |  | 71,747 |  |
| Amortization and depreciation | 16,386 |  |  | 11,533 |  |
| Value of in-force business | 167,599 |  |  | — |  |
| Intangible assets | 408,654 |  |  | — |  |
|  | 1,022,938 |  |  | 387,159 |  |
| Deferred tax liabilities |  |  |  |
| VOBA | (46,109) |  |  | — |  |
| Deferred acquisition expenses | (112,157) |  |  | (66,536) |  |
| Intangible assets | — |  |  | (3,830) |  |
|  | (158,266) |  |  | (70,366) |  |
| Net deferred tax asset (liability) before valuation allowance | 864,672 |  |  | 316,793 |  |
| Valuation allowance | (213,277) |  |  | (193,640) |  |
| Net deferred tax asset (liability) | $ | 651,395 |  |  | $ | 123,153 |  |
A substantial amount of the Company’s net deferred tax asset is separately reflected as an asset in the consolidated balance sheets with the remaining net deferred tax liability recorded in other liabilities. The Company’s net deferred tax asset primarily relates to net operating loss and capital loss carryforwards, unrealized losses in the U.S. investment portfolio, and GAAP versus tax basis accounting differences relating to unearned premiums, reserves for claims and claim expenses, deferred finance charges, deferred underwriting results, accrued expenses, investments, value of in-force business, intangible assets, VOBA, deferred acquisition expenses and amortization and depreciation. 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. During 2023, the Company recorded a net increase to the valuation allowance of $19.6 million (2022 – increase of $62.1 million, 2021 – increase of $42.8 million). A valuation allowance has been provided against certain deferred tax assets in the U.S., Ireland, the U.K., Luxembourg, Singapore and Switzerland. These deferred tax assets relate primarily to net operating loss carryforwards, deferred finance charges and unrealized losses in the U.S. investment portfolio. In the U.S. and Switzerland, the Company has net operating loss carryforwards of $167.0 million and $570.9 million respectively. Under applicable law, the U.S and Swiss net operating loss carryforwards will begin to expire in 2037 and 2024 respectively. The Company has net operating loss carryforwards of $185.6 million in the U.K., $5.6 million in Singapore, $7.8 million in Ireland, and $155.7 million in Luxembourg. Under applicable law, the U.K., Singapore, Ireland and Luxembourg net operating losses can be carried forward for an indefinite period. The Company has capital loss carryforwards of $105.7 million in the U.S. that begin to expire in 2027.The Company has unrealized losses in the US investment portfolio of $186.2 million. These unrealized investment losses do not expire. However, if realized, these losses may only offset realized capital gains and would expire, if unused, at the end of the fifth taxable year following their realization. The Company made net payments for U.S. federal and state, Ireland, U.K., Singapore, Switzerland and Australia income taxes of $26.8 million for the year ended 2023 (2022 – net payments of $3.1 million, 2021 – net refunds of $4.3 million). The Company had no unrecognized tax benefits at December 31, 2023 and December 31, 2022. Interest and penalties related to unrecognized tax benefits would be recognized in income tax expense. At December 31, 2023 and December 31, 2022, there was no interest or penalties accrued on unrecognized tax benefits. The following filed income tax returns are open for examination with the applicable tax authorities: tax years 2018 through 2022 with the U.S.; 2019 through 2022 with Ireland; 2021 through 2022 with the U.K.; 2019 through 2022 with Singapore; 2019 through 2022 with Switzerland; 2019 through 2022 with Australia; 2019 through 2022 with Canada; and 2018 through 2022 with Luxembourg. The Company does not expect the resolution of these open years to have a significant impact on its consolidated statements of operations and financial condition.

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