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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES
Under current Bermuda law, AXIS Capital's Bermuda domiciled subsidiaries are not required to pay any taxes in Bermuda on income or capital gains. The Company has received an assurance from the Minister of Finance in Bermuda that, in the event of any taxes being imposed, it will be exempt from taxation in Bermuda until March 2035. The Company's primary Bermuda subsidiary has an operating branch in Singapore, which is subject to the relevant taxes in that jurisdiction. The Singapore branch is not under examination in that tax jurisdiction but remains subject to examination for tax years 2018 through 2021.
AXIS Capital's U.S. subsidiaries are subject to federal, state and local corporate income taxes, and other taxes applicable to U.S. corporations. The provision for federal income taxes has been determined under the principles of the consolidated tax provisions of the U.S. Internal Revenue Code and regulations. Should the U.S. subsidiaries pay a dividend outside the U.S. group, withholding taxes will apply. The Company's U.S. subsidiaries are not under examination but remain subject to examination for tax years 2018 through 2021.
In Canada, AXIS Capital's U.S. reinsurance company operates through a branch and its U.S. service company has an unlimited liability company subsidiary based in Canada. The Canadian operations are subject to the relevant taxes in that jurisdiction and remain subject to examination for tax years 2017 through 2021.
AXIS Capital had subsidiaries in Ireland, the U.K., and Brazil in 2021. The Company ceased operations in Luxembourg in December 2019 and in Dubai in March 2021. Effective January 1, 2021, AXIS Capital's Irish operations had branches in the U.K., Switzerland, Belgium and the Netherlands. The Company ceased operations in the Netherlands in December 31, 2021. There are ongoing audits in Ireland, with respect to 2016, 2017 and 2019 tax years, and Belgium, with respect to 2018 and
2019 tax years. There are no other ongoing audits of AXIS Capital's subsidiaries or branches, but they remain subject to examination in all applicable jurisdictions for tax years 2017 through 2021.
In the U.K., the Company operates through Lloyd’s syndicates whose income is subject to tax in the U.K., payable by its corporate members. The income from operations at Lloyd’s is also subject to taxes in other jurisdictions in which Lloyd's operates, including the U.S. Under a Closing Agreement between Lloyd’s and the IRS, Lloyd's corporate members pay U.S. income tax on U.S. connected income written by Lloyd’s syndicates. To the extent that the Lloyd’s syndicates incur taxes outside the U.K., they may claim a credit for foreign taxes incurred, limited to the U.K. equivalent tax on the same income.

The following table provides an analysis of income tax expense (benefit) and net tax assets:
Year ended December 31,202120202019
Current income tax expense (benefit)
U.S.$35,229 $(1,122)$12,601 
Europe(6,082)365 22,425 
Other— — 469 
Deferred income tax expense (benefit)
U.S.(3,369)(3,098)17,665 
Europe36,606 (8,466)(29,468)
Total income tax expense (benefit)$62,384 $(12,321)$23,692 
Net current tax receivables$27,883 $12,205 $13,130 
Net deferred tax assets (liabilities)12,860 (1,625)18,621 
Net tax assets$40,743 $10,580 $31,751 
Deferred income taxes reflect the tax impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. The following table provides details of the significant components of deferred tax assets and liabilities:
At December 31,20212020
Deferred tax assets:
Discounting of net reserves for losses and loss expenses$53,415 $47,912 
Unearned premiums53,342 46,049 
Operating and capital loss carryforwards(1)
85,358 80,008 
Accruals not currently deductible38,294 28,096 
Tax credits 2,709 11,142 
Other deferred tax assets5,040 4,352 
Deferred tax assets before valuation allowance238,158 217,559 
Valuation allowance(16,918)(20,778)
Deferred tax assets net of valuation allowance221,240 196,781 
Deferred tax liabilities:
Deferred acquisition costs(34,845)(37,098)
Net unrealized investments gains(23,866)(39,459)
Intangible assets(52,722)(46,132)
Equalization reserves(2,365)(2,825)
Acquisition adjustments(79,464)(60,261)
Other deferred tax liabilities(15,118)(12,631)
Deferred tax liabilities(208,380)(198,406)
Net deferred tax assets (liabilities)$12,860 $(1,625)
(1)    At December 31, 2021 and 2020, the total operating loss carryforwards includes Lloyd's deferred year of account losses of $nil and $39 million, respectively.
The following table summarizes total operating and capital loss carryforwards and tax credits:
At December 31,20212020
Operating and Capital Loss Carryforwards(1)
Singapore (branch) operating loss carryforward$76,287 $110,504 
U.K. operating loss carryforward(2)
308,491 357,226 
Ireland operating loss carryforward11,850 404 
Ireland capital loss carryforward716 716 
Switzerland operating loss carryforward
15,989 — 
Belgian operating loss carryforward— 1,850 
Tax Credits(1)
Ireland foreign tax credit$338 $2,386 
U.K. foreign tax credit2,372 8,756 
(1)    At December 31, 2021, all remaining operating and capital loss carryforwards and tax credits can be carried forward indefinitely.
(2)    At December 31, 2021 and 2020, the U.K. operating loss carryforward includes Lloyd's deferred year of account losses of $nil and $206 million, respectively.
The following table shows an analysis of the movement in the Company's valuation allowance:
At December 31,20212020
Income tax expense:
Valuation allowance - beginning of year$20,778 $18,560 
Operating loss carryforwards(3,422)661 
Foreign tax credit(2,048)293 
U.K. branch assets and other foreign rate differentials1,610 1,264 
Valuation allowance - end of year$16,918 $20,778 
At December 31, 2021 and 2020, the Company had a full valuation allowance on operating loss carryforwards relating to operations in Singapore, un-utilized foreign tax credits available in Ireland and certain other deferred tax assets related to branch operations.
Although realization is not assured, management believes it is more likely than not that the tax benefit of the recorded net deferred tax assets will be realized. In evaluating the Company's ability to recover these tax assets within the jurisdiction from which they arise, it considered all available positive and negative evidence, including historical results, operating loss carry-back potential and scheduled reversals of deferred tax liabilities. The Company believes its U.S. and U.K. operations will produce significant taxable income in future periods and have deferred tax liabilities that will reverse in future periods, such that the Company believes sufficient ordinary taxable income is available to utilize all remaining ordinary deferred tax assets.
A deferred tax liability has not been recorded on undistributed earnings as the U.S. group satisfies the indefinite reversal criteria.
At December 31, 2021 and 2020, there were no unrecognized tax benefits.

The following table presents the distribution of income before income taxes between domestic and foreign jurisdictions as well as a reconciliation of the actual income tax rate to the amount computed by applying the effective tax rate of 0% under Bermuda law to income before income taxes:
Year ended December 31,202120202019
Income (loss) before income taxes
Bermuda (domestic)$431,310 $(45,951)$179,418 
Foreign249,686 (86,794)167,747 
 Total income (loss) before income taxes$680,996 $(132,745)$347,165 
Reconciliation of effective tax rate (% of income before income taxes)
Expected tax rate0.0 %0.0 %0.0 %
Foreign taxes at local expected rates:
U.S.4.8 %5.6 %8.1 %
Europe2.0 %9.2 %0.4 %
Valuation allowance(0.5 %)(1.7 %)1.3 %
Change in enacted tax rate(1)
1.5 %(1.7 %)0.0 %
Other1.4 %(2.1 %)(3.0 %)
Actual tax rate9.2 %9.3 %6.8 %
(1)    At December 31, 2021, the change in enacted tax rate included a change in the UK tax rate from 19% to 25% and in Belgium from 29.58% to 25%. At December 31, 2020, the change in enacted tax rate included a change in UK tax rate from 17% to 19%.