Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense (benefit) consists of:

(In thousands)	Current Expense		Deferred Expense (Benefit)		Total
December 31, 2024
Domestic	$	344,210	$	51,754	$	395,964
Foreign	69,312		44,640		113,952
Total expense	$	413,522	$	96,394	$	509,916
December 31, 2023
Domestic	$	352,891	$	(43,456)	$	309,435
Foreign	44,372		16,750		61,122
Total expense (benefit)	$	397,263	$	(26,706)	$	370,557
December 31, 2022
Domestic	$	295,849	$	(27,544)	$	268,305
Foreign	42,890		23,532		66,422
Total expense (benefit)	$	338,739	$	(4,012)	$	334,727

        

Income before income taxes from domestic operations was $1,840 million, $1,430 million and $1,240 million for the years ended December 31, 2024, 2023 and 2022, respectively. Income before income taxes from foreign operations was $424 million, $324 million and $480 million for the years ended December 31, 2024, 2023 and 2022, respectively.

A reconciliation of the income tax expense and the amounts computed by applying the Federal and foreign income tax rate of 21% for 2024, 2023 and 2022 to pre-tax income are as follows:

(In thousands)	2024		2023		2022
Computed “expected” tax expense	$	475,543	$	368,425	$	361,133
Tax-exempt investment income	(7,110)		(8,361)		(10,815)
Change in valuation allowance	(220)		(10,883)		(28,064)
Impact of foreign operations and related tax rates	19,317		(1,896)		(3,444)
State and local taxes, net of federal benefit	12,329		12,271		8,976
Other, net	10,057		11,001		6,941
Total expense	$	509,916	$	370,557	$	334,727

At December 31, 2024 and 2023, the tax effects of differences that give rise to significant portions of the deferred tax asset and deferred tax liability are as follows:

(In thousands)	2024		2023
Deferred tax asset:
Loss reserve discounting	$	218,222	$	230,956
Unearned premiums	216,721		200,938
Unrealized investment losses	58,701		126,693
Net operating losses & foreign tax credits	62,159		59,154
Other-than-temporary impairments	7,149		12,691
Employee compensation plans	70,529		68,062
Other	81,915		78,025
Gross deferred tax asset	715,396		776,519
Less valuation allowance	(36,063)		(36,283)
Deferred tax asset	679,333		740,236
Deferred tax liability:
Amortization of intangibles	15,124		15,205
Loss reserve discounting - transition rule	4,944		9,894
Deferred policy acquisition costs	195,150		176,281
Property, furniture and equipment	45,276		43,501
Investment funds	184,899		161,867
Other	78,874		66,525
Deferred tax liability	524,267		473,273
Net deferred tax asset	$	155,066	$	266,963

The Company had a net current tax payable of $14 million and $46 million at December 31, 2024 and 2023, respectively. At December 31, 2024, the Company had foreign net operating loss carryforwards of $196 million that have no expiration date. At both December 31, 2024 and 2023, the Company had a valuation allowance of $36 million. The Company has provided a valuation allowance against the utilization of $13 million of foreign tax credits and the future net operating loss carryforward benefits of $23 million for certain foreign operations. The statute of limitations for the Company’s U.S. Federal income tax returns has closed for all years through December 31, 2020.

The realization of the deferred tax asset is dependent upon the Company’s ability to generate sufficient taxable income in future periods. Based on historical results and the prospects for future current operations, management anticipates that it is more likely than not that future taxable income will be sufficient for the realization of this asset.

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $481 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. In the future, if such earnings were distributed the Company projects that the incremental tax, if any, will be immaterial.