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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Components of Income from Continuing Operations Before Income Taxes and Summary of Components of Income Tax Expense (Benefit)

Income from continuing operations before income taxes and a summary of the components of income tax expense in the Consolidated Statements of Income are shown below:


YEARS ENDED DECEMBER 31	2025		2024			2023
(in millions)
Income from continuing operations before income taxes	$	843.8	$	537.8		$	41.1
Income tax expense (benefit):
Current	$	169.3	$	131.1		$	32.6
Deferred		13.8		(18.6	)		(25.0	)
Total income tax expense	$	183.1	$	112.5		$	7.6

Schedule of Income Taxes Paid

Income taxes paid were as follows:


YEAR ENDED DECEMBER 31	2025
(in millions)
Federal	$	162.8
State		6.2
Total	$	169.0

Schedule of Effective Income Tax Rate Reconciliation

The income tax expense attributable to the consolidated results of continuing operations is different from the amount determined by multiplying income from continuing operations before income taxes by the U.S. statutory federal income tax rate of 21%. The sources of the difference and the tax effects of each were as follows:


YEAR ENDED DECEMBER 31	2025
(in millions)	Amount		Percentage
Income tax expense at U.S. federal statutory tax rate	$	177.2		21.0	%
Adjustments for state income tax, nontaxable, nondeductible and other items, net of federal tax benefits as applicable (a)		5.9		0.7
Income tax expense	$	183.1		21.7	%

(a)

In addition to federal income taxes, the Company primarily pays non-income state taxes as a percentage of premiums written which are accounted for as policy acquisition costs. Included in the table above are state income taxes, excess compensation, stock-based compensation windfall benefits and other items, none of which were individually significant.


YEARS ENDED DECEMBER 31	2024			2023
(in millions)
Income tax expense at U.S. federal statutory tax rate	$	112.9		$	8.7
Nondeductible expenses		4.8			3.8
Stock-based compensation windfall benefit		(1.9	)		(1.1	)
Tax difference related to investment disposals and maturities		(1.2	)		(1.3	)
Change in uncertain tax positions		(1.0	)		(0.9	)
Current year federal tax credits		(0.9	)		(0.7	)
Dividend received deduction		(0.3	)		(0.5	)
Other, net		0.1			(0.4	)
Income tax expense	$	112.5		$	7.6
Effective tax rate		20.9	%		18.5	%

Schedule of Deferred Tax Assets and Liabilities

The following are the components of the Company’s deferred tax assets and liabilities, excluding those associated with its discontinued operations.


DECEMBER 31	2025		2024
(in millions)
Deferred tax assets:
Loss, LAE and unearned premium reserves, net	$	226.1	$	211.0
Employee benefit plans		11.1		9.4
Investments, net		1.3		79.8
Other		11.6		14.9
Total deferred tax assets		250.1		315.1
Deferred tax liabilities:
Deferred acquisition costs		147.6		139.2
Software capitalization		19.2		1.7
Total deferred tax liabilities		166.8		140.9
Net deferred tax asset	$	83.3	$	174.2