XML 70 R49.htm IDEA: XBRL DOCUMENT v3.22.4
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Summary of Income Tax Expense and Net Tax Assets
The following table provides an analysis of income tax expense (benefit) and net tax assets:
Year ended December 31,202220212020
Current income tax expense (benefit)
U.S.$11,491 $35,229 $(1,122)
Europe2,366 (6,082)365 
Other(147)— — 
Deferred income tax expense (benefit)
U.S.(8,147)(3,369)(3,098)
Europe16,474 36,606 (8,466)
Total income tax expense (benefit)$22,037 $62,384 $(12,321)
Net current tax receivables$46,704 $27,883 $12,205 
Net deferred tax assets (liabilities)108,220 12,860 (1,625)
Net tax assets$154,924 $40,743 $10,580 
Summary of Deferred Tax Assets and Liabilities The following table provides details of the significant components of deferred tax assets and liabilities:
At December 31,20222021
Deferred tax assets:
Discounting of net reserves for losses and loss expenses$52,992 $53,415 
Unearned premiums56,146 53,342 
Net unrealized investments losses71,251 — 
Operating and capital loss carryforwards(1)
152,896 85,358 
Accruals not currently deductible42,045 38,294 
Tax credits 7,619 2,709 
Other deferred tax assets8,590 5,040 
Deferred tax assets before valuation allowance391,539 238,158 
Valuation allowance(60,069)(16,918)
Deferred tax assets net of valuation allowance331,470 221,240 
Deferred tax liabilities:
Deferred acquisition costs(35,211)(34,845)
Net unrealized investments gains— (5,732)
Other investment adjustments and impairments(20,068)(18,134)
Intangible assets(51,993)(52,722)
Equalization reserves(2,530)(2,365)
Acquisition adjustments(72,351)(79,464)
Lloyd’s deferred year of account results(34,068)(5,114)
Other deferred tax liabilities(7,029)(10,004)
Deferred tax liabilities(223,250)(208,380)
Net deferred tax assets (liabilities)$108,220 $12,860 
(1)    At December 31, 2022 and 2021, the total operating loss carryforwards does not include any Lloyd's deferred year of account losses.
Summary of Tax Credits
The following table summarizes total operating and capital loss carryforwards and tax credits:
At December 31,20222021
Operating and Capital Loss Carryforwards(1)
Singapore (branch) operating loss carryforward$73,769 $76,287 
U.K. operating loss carryforward(2)
415,274 308,491 
Ireland operating loss carryforward200,822 11,850 
Ireland capital loss carryforward716 716 
Switzerland operating loss carryforward(3)
187,057 15,989 
Tax Credits(1)
Ireland foreign tax credit$655 $338 
U.K. foreign tax credit2,372 2,372 
U.S. foreign tax credit(4)
4,592 — 
(1)    At December 31, 2022, the Singapore, U.K., and Ireland operating and capital loss carryforwards and tax credits can be carried forward indefinitely.
(2)    At December 31, 2022 and 2021, the U.K. operating loss carryforward does not include any Lloyd's deferred year of account losses.
(3)    At December 31, 2022, the Swiss net operating losses can be carried forward 7 years of which $15,989 expires 2028 and $171,068 expires 2029.
(4)    At December 31, 2022, the U.S. foreign tax credit can be carried back 1 year and carried forward 10 years.
Summary of Operating and Capital Loss Carryforwards
The following table summarizes total operating and capital loss carryforwards and tax credits:
At December 31,20222021
Operating and Capital Loss Carryforwards(1)
Singapore (branch) operating loss carryforward$73,769 $76,287 
U.K. operating loss carryforward(2)
415,274 308,491 
Ireland operating loss carryforward200,822 11,850 
Ireland capital loss carryforward716 716 
Switzerland operating loss carryforward(3)
187,057 15,989 
Tax Credits(1)
Ireland foreign tax credit$655 $338 
U.K. foreign tax credit2,372 2,372 
U.S. foreign tax credit(4)
4,592 — 
(1)    At December 31, 2022, the Singapore, U.K., and Ireland operating and capital loss carryforwards and tax credits can be carried forward indefinitely.
(2)    At December 31, 2022 and 2021, the U.K. operating loss carryforward does not include any Lloyd's deferred year of account losses.
(3)    At December 31, 2022, the Swiss net operating losses can be carried forward 7 years of which $15,989 expires 2028 and $171,068 expires 2029.
(4)    At December 31, 2022, the U.S. foreign tax credit can be carried back 1 year and carried forward 10 years.
Summary of Valuation Allowance Roll Forward
The following table shows an analysis of the movement in the Company's valuation allowance:
At December 31,20222021
Income tax expense (benefit):
Valuation allowance - beginning of year$16,918 $20,778 
Operating loss carryforwards21,724 (3,422)
Foreign tax credit2,401 (2,048)
U.K. branch assets and other foreign rate differentials(1,261)1,610 
Valuation allowance - end of year$39,782 $16,918 
Accumulated other comprehensive income (loss):
Valuation allowance - beginning of year$— $— 
Change in investment - related items20,287 — 
Valuation allowance - end of year20,287 — 
Total valuation allowance - end of year$60,069 $16,918 
Summary of Effective Tax Rate Reconciliation
The following table presents the distribution of income before income taxes between domestic and foreign jurisdictions and 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 31,202220212020
Income (loss) before income taxes
Bermuda (domestic)$236,781 $431,310 $(45,951)
Foreign8,340 249,686 (86,794)
 Total income (loss) before income taxes$245,121 $680,996 $(132,745)
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.0.2 %4.8 %5.6 %
Europe1.9 %2.0 %9.2 %
Valuation allowance9.5 %(0.5 %)(1.7 %)
Change in enacted tax rate(1)
(2.2 %)1.5 %(1.7 %)
Other(0.4 %)1.4 %(2.1 %)
Actual tax rate9.0 %9.2 %9.3 %
(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%.