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Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company was incorporated under the laws of Bermuda until November 30, 2023. Under Bermuda law, the Company was not obligated to pay any tax in Bermuda based upon income or capital gains. We previously received an undertaking from the Supervisor of Insurance in Bermuda pursuant to the provisions of the Exempted Undertakings Tax Protection Act, 2011 which exempted us from any Bermuda taxes computed on profits, income or any capital asset, gain or appreciation or any tax in the nature of estate, duty or inheritance tax, at least until the year 2035. As of November 30, 2023, the Company redomiciled from Bermuda to the United States. In connection with redomiciling from Bermuda to the United States, the Company’s predecessor pre-tax loss and tax benefit is reported in Bermuda. Subsequent to redomiciling, the Company’s successor pre-tax income and tax provision is reported in the U.S. Separately, Argo Re has submitted an Internal Revenue Code Section 953(d) election to treat the entity as a U.S. taxpayer. The election is deemed retroactive to the period beginning January 1, 2023. Argo Re pre-tax loss for the predecessor period is reported in Bermuda. The retroactive U.S. tax benefit incurred for the predecessor period is reflected in purchase accounting. Argo Re pre-tax income and tax provision is reported in the United States for the successor period.
On February 2, 2023, Argo International Holdings Limited, a wholly-owned U.K. subsidiary of the Company, sold AUA. See Note 1, “Business and Significant Accounting Policies” for additional information related to this transaction. The predecessor period includes activity of AUA until it was sold. Subsequent to the AUA sale, the Company retained one U.K. subsidiary that is subject to the tax laws of that country. Under current law, the subsidiary is taxed at the applicable corporate tax rates and files a separate U.K. income tax return.
We have subsidiaries based in the U.S. that are subject to U.S. tax laws. Under current law, these subsidiaries are taxed at the applicable corporate tax rates. Beginning January 1, 2024, our U.S. subsidiaries file a consolidated U.S. federal income tax return with BAMR US Holdings LLC, a subsidiary of Brookfield Wealth Solutions Ltd.
We also have operations in Ireland and Italy which are subject to income taxes imposed by the jurisdiction in which they operate. Furthermore, we have an operation in Barbados which is not subject to income tax under the laws of that country.

On August 16, 2022, U.S. legislation referred to as the Inflation Reduction Act of 2022 was enacted. This legislation enacted a new Corporate Alternative Minimum Tax (“CAMT”) and Excise Tax on Repurchases of Corporate Stock. The Company has determined as of the period ended September 30, 2024, that it is subject to CAMT. The recognition of applicable CAMT is reported on a consolidated basis with Brookfield Wealth Solutions Ltd. The Company is not subject to Excise Tax on Repurchases of Corporate Stock.
Our 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. For the three and nine months ended September 30, 2024 and 2023, pre-tax income (loss) attributable to our operations and the corresponding operations’ effective tax rates were as follows: 
SuccessorPredecessor
Three Months Ended
September 30, 2024		Three Months Ended
September 30, 2023
(in millions)Pre-Tax
Income (Loss)		Effective
Tax
Rate		Pre-Tax
Income (Loss)		Effective
Tax
Rate
Bermuda$— — %$(9.8)— %
United States(163.9)21.0 %(18.1)(95.5)%
United Kingdom(2.1)— %(1.6)(22.5)%
Barbados— — %— 
(1)
— %
Ireland— — %— 
(1)
— %
Italy(0.7)

— %0.2 

20.0 %
Pre-tax income (loss)$(166.7)20.6 %$(29.3)(60.1)%
(1) Pre-tax income (loss) for the respective year was less than $0.1 million.
SuccessorPredecessor
Nine Months Ended
September 30, 2024		Nine Months Ended
September 30, 2023
(in millions)Pre-Tax
Income (Loss)		Effective
Tax
Rate		Pre-Tax
Income (Loss)		Effective
Tax
Rate
Bermuda$— — %$(21.1)— %
United States(114.1)23.9 %(31.2)(32.9)%
United Kingdom(4.4)— %(23.2)30.4 %
Barbados— — %— 
(1)
— %
United Arab Emirates— — %0.3 — %
Ireland— — %(0.1)— %
Italy(2.7)(1.4)%0.1 50.3 %
Pre-tax income (loss)$(121.2)22.5 %$(75.2)(4.4)%
(1) Pre-tax income (loss) for the respective year was less than $0.1 million.
A reconciliation of the difference between the provision (benefit) for income taxes and the expected tax provision (benefit) at the weighted average tax rate is as follows:
SuccessorPredecessorSuccessorPredecessor
(in millions)Three Months Ended
September 30, 2024		Three Months Ended
September 30, 2023		Nine Months Ended
September 30, 2024		Nine Months Ended
September 30, 2023
Income tax provision (benefit) at expected rate$(35.1)$(4.1)$(25.7)$(11.0)
Tax effect of:
Nontaxable investment income— — (0.2)(0.1)
Foreign exchange adjustments— — — (2.6)
Base Erosion and Anti-Abuse Tax— 20.4 — 16.9 
Withholding taxes— — — 0.1 
Ireland Capital Loss— — 3.3 — 
U.S. state tax expense, net of federal income tax effect— — — (1.2)
Change in uncertain tax position liability— 0.2 — 1.2 
Change in valuation allowance0.3 — (2.2)0.1 
Impact of change in tax rate related to Finance Act 2021— — — (0.4)
Prior period adjustment(0.3)0.2 (3.6)0.1 
Other0.7 0.9 1.2 0.2 
Income tax provision (benefit)$(34.4)$17.6 $(27.2)$3.3 

Our gross deferred tax assets are supported by taxes paid in previous periods, reversal of taxable temporary differences and recognition of future taxable income. Management regularly evaluates the recoverability of the deferred tax assets and makes any necessary adjustments to them based upon any changes in management’s expectations of future taxable income. Realization of deferred tax assets is dependent upon our generation of future taxable income sufficient to recover tax benefits that cannot be recovered from taxes paid in the carryback period, generally for our U.S. property and casualty insurers two years for net operating losses and for all our U.S. subsidiaries three years for capital losses. If a company determines that any of its deferred tax assets will not result in future tax benefits, a valuation allowance must be established for the portion of these assets that are not expected to be realized. For three and nine months ended September 30, 2024, the net change in valuation allowance for deferred tax assets was an increase of $0.3 million and decrease of $2.2 million, respectively. For the three months ended September 30, 2024, the change in valuation allowance related to the limited net operating loss carryforwards incurred in the United Kingdom. For the nine months ended September 30, 2024, the change in valuation allowance primarily related to the following: $3.3 million decrease related to an Ireland Capital Loss due to dissolution and a $1.1 million increase related to limited net operating loss carryforwards incurred in the United Kingdom. Based upon a review of our available evidence, both positive and negative discussed above, the Company concluded that it is more-likely-than-not that $65.9 million of our deferred tax assets will be realized.
For any uncertain tax positions not meeting the “more-likely-than-not” recognition threshold, accounting standards require recognition, measurement and disclosure in the Company’s Condensed Consolidated Financial Statements. No change to the uncertain tax positions were recorded for federal or state income tax liability for the three and nine months ended September 30, 2024. A net decrease of interest in the amount of $1.1 million has been recorded in the line item Interest expense in our Condensed Consolidated Statements of Income (Loss) for the nine months ended September 30, 2024. A net decrease of penalty in the amount of $0.2 million has been recorded in the line item Underwriting, acquisition, and general expenses in our Consolidated Statements of Income (Loss) for the nine months ended September 30, 2024. The Company did not incur interest and penalty for the three months ended September 30, 2024.
Our U.S. subsidiaries are no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2020. Our U.K. subsidiary is no longer subject to U.K. income tax examinations by His Majesty’s Revenue and Customs for years before 2022.