Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Components Of Income Before Income Taxes

Income (loss) before income taxes includes the following components.



	Years Ended December 31,
(dollars in thousands)	2018			2017			2016
Domestic operations	$	99,373		$	337,704		$	288,905
Foreign operations	(107,228		)	(250,409		)	341,015
Income (loss) before income taxes	$	(7,855	)	$	87,295		$	629,920

Components Of Income Tax Expense (Benefit)

Income tax expense (benefit) includes the following components.



	Years Ended December 31,
(dollars in thousands)	2018			2017			2016
Current:
Domestic	$	77,936		$	(19,255	)	$	57,916
Foreign	41,833			29,882			48,203
Total current tax expense	119,769			10,627			106,119
Deferred:
Domestic	(77,255		)	(222,427		)	19,991
Foreign	79,984			(101,663		)	43,367
Total deferred tax expense (benefit)	2,729			(324,090		)	63,358
Income tax expense (benefit)	$	122,498		$	(313,463	)	$	169,477

Reconciliations Of United States Corporate Income Tax Rate To Effective Tax Rate On Income Before Income Taxes

The following table presents a reconciliation of income taxes computed using the U.S. corporate tax rate to the Company's income tax expense (benefit).



	Years Ended December 31,
	2018			2017			2016
Income taxes at U.S. corporate tax rate	$	(1,650	)	$	30,553		$	220,472
Increase (decrease) resulting from:
Change in tax status of U.K. subsidiaries	103,281			—			—
Nondeductible loss on investments managed by MCIM	26,552			16,231			—
Foreign operations	4,951			37,207			4,672
Tax-exempt investment income	(18,927		)	(41,565		)	(39,710		)
TCJA	(5,699		)	(339,899		)	—
Tax credits	(3,617		)	(10,236		)	(13,294		)
Stock based compensation	(2,635		)	(9,001		)	(5,411		)
Other	20,242			3,247			2,748
Income tax expense (benefit)	$	122,498		$	(313,463	)	$	169,477

Components Of Domestic And Foreign Deferred Tax Assets And Liabilities

The following table presents the components of domestic and foreign deferred tax assets and liabilities.



	December 31,
(dollars in thousands)	2018			2017
Assets:
Unpaid losses and loss adjustment expenses	$	164,497		$	144,761
Unearned premiums recognized for income tax purposes	85,952			74,282
Life and annuity benefits	78,370			77,945
Net operating loss carryforwards	46,662			29,252
Tax credit carryforwards	39,877			48,938
Accrued incentive compensation	30,308			23,167
Other differences between financial reporting and tax bases	39,763			60,995
Total gross deferred tax assets	485,429			459,340
Less valuation allowance	(36,286		)	(25,225		)
Total gross deferred tax assets, net of allowance	449,143			434,115
Liabilities:
Investments	590,250			603,523
Goodwill and other intangible assets	124,953			171,681
Deferred policy acquisition costs	89,716			90,826
Other differences between financial reporting and tax bases	90,269			73,664
Total gross deferred tax liabilities	895,188			939,694
Net deferred tax liability	$	446,045		$	505,579