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Federal Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Federal Income Taxes Federal Income Taxes
(a) A reconciliation of federal income tax on income at the corporate rate (21%) to the effective tax rate is as follows:
($ in thousands)202020192018
Tax at statutory rate $63,627 70,642 44,461 
Tax-advantaged interest(4,730)(4,909)(5,518)
Dividends received deduction(514)(443)(647)
Executive compensation2,246 2,985 2,279 
Stock-based compensation(1,846)(3,253)(3,093)
Other(2,150)(255)(4,700)
Federal income tax expense$56,633 64,767 32,782 

(b) The tax effects of the significant temporary differences that gave rise to deferred tax assets and liabilities were as follows:
($ in thousands)20202019
Deferred tax assets:  
Net loss reserve discounting$54,240 48,193 
Net unearned premiums60,842 57,004 
Employee benefits8,943 10,646 
Long-term incentive compensation plans5,472 5,727 
Temporary investment write-downs6,037 1,059 
Other7,195 6,478 
Total deferred tax assets142,729 129,107 
Deferred tax liabilities:  
Deferred policy acquisition costs60,601 56,949 
Unrealized gains on investment securities81,142 45,294 
Other investment-related items, net14,760 7,576 
Accelerated depreciation and amortization13,322 12,512 
Total deferred tax liabilities169,825 122,331 
Net deferred federal income tax (liability) asset$(27,096)6,776 
 
Net deferred federal income tax decreased by $33.9 million in 2020, which was primarily driven by a decrease in interest rates resulting in a $35.8 million increase in gross deferred tax liabilities associated with unrealized gains on our fixed income securities portfolio.
After considering all evidence, both positive and negative, with respect to our federal tax loss carryback availability, expected levels of pre-tax financial statement income, and federal taxable income, we believe it is more likely than not that the existing deductible temporary differences will reverse during periods in which we generate net federal taxable income or have adequate federal carryback availability. As a result, we had no valuation allowance recognized for federal deferred tax assets at December 31, 2020 or 2019. We do not have unrecognized tax expense or benefit as of December 31, 2020.

We have analyzed our tax positions in all open tax years, which as of December 31, 2020 were 2017 through 2020. The 2018 tax year is currently under audit. We do not expect any material adjustments to arise out of the 2018 audit.
We believe our tax positions will more likely than not be sustained upon examination, including related appeals or litigation. In the event we had a tax position that did not meet the more likely than not criteria, any tax, interest, and penalties incurred related to such a position would be reflected in "Total federal income tax expense" on our Consolidated Statements of Income.