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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Under current Bermuda law, AXIS Capital's Bermuda subsidiaries are not required to pay any taxes in Bermuda on income or capital gains. The Company has received 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.

Notwithstanding the above, on December 27, 2023, the Bermuda government enacted a corporate income tax which will apply for fiscal years beginning on or after January 1, 2025. Importantly, under the Corporate Income Tax Act 2023 of Bermuda, any liability to the tax will apply regardless of any assurances previously provided under the Exempted Undertakings Tax Protection Act 1966 of Bermuda. The Act includes a provision referred to as the economic transition adjustment ("Bermuda ETA"), which is intended to provide a fair and equitable transition into the tax regime. Pursuant to the Act and subsequently issued guidance, the Company recorded a net deferred tax asset of $177 million in 2024.
AXIS Specialty Insurance Bermuda (refer to Note 1 'Organization') that is a wholly owned subsidiary of AXIS Specialty U.S. Holdings, Inc, is in the process of making an election to be treated as a U.S. taxpayer under section 953(d) of the Internal Revenue Code of 1986, as amended ("U.S. Internal Revenue Code"). AXIS Specialty Insurance Bermuda will be subject to tax in the U.S. in 2024 and in the U.S. and Bermuda in 2025, when applicable. Any U.S. tax incurred as a result of this election is expected to be fully creditable against the Bermuda corporate income tax.
AXIS Capital'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 2021 through 2024.
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. Should the U.S. subsidiaries pay a dividend outside the U.S. group, withholding taxes will apply. The U.S. subsidiaries are currently under examination for the 2019, 2021, and 2022 tax years and remain subject to examination for tax years 2019, and 2021 through 2024.
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 2020 through 2024.
AXIS Capital had subsidiaries in Ireland, the U.K., and Brazil with branches in the U.K., Switzerland, and Belgium. These subsidiaries and their branches are not under examination but remain subject to examination in all applicable jurisdictions for tax years 2020 through 2024.
In the U.K., the Company operates through a Lloyd’s syndicate 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 31,202420232022
Current income tax expense (benefit)
U.S.$84,255 $12,021 $11,491 
Europe19,260 32,386 2,366 
Bermuda
3,425 291 (147)
Deferred income tax expense (benefit)
U.S.716 (24,042)(8,147)
Europe7,290 18,932 16,474 
Bermuda(1)
(170,541)(13,272)— 
Total income tax expense (benefit)$(55,595)$26,316 $22,037 
Net current tax receivables$42,991 $78,570 $46,704 
Net deferred tax assets (liabilities)278,474 72,850 108,220 
Net tax assets$321,465 $151,420 $154,924 
(1)    Reflects the recognition of a tax benefit related to the Bermuda ETA, offset by a partial reversal of the 2023 tax benefit on unrealized investment losses included in other comprehensive income (loss) due to the enactment of corporate income tax, effective January 1, 2025.
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 31,20242023
Deferred tax assets:
Discounting of net reserves for losses and loss expenses$66,338 $62,316 
Unearned premiums62,656 54,104 
Net unrealized investments losses36,536 54,395 
Operating and capital loss carryforwards
75,864 100,907 
Accruals not currently deductible36,253 36,407 
Tax credits 2,414 11,602 
Bermuda economic transition adjustment
176,923 — 
Other deferred tax assets3,681 4,149 
Deferred tax assets before valuation allowance460,665 323,880 
Valuation allowance(19,829)(38,711)
Deferred tax assets net of valuation allowance440,836 285,169 
Deferred tax liabilities:
Deferred acquisition costs(35,401)(27,109)
Other investment adjustments and impairments(7,933)(7,173)
Intangible assets(47,355)(49,486)
Depreciation and amortization
(7,586)(1,140)
Equalization reserves(2,347)(2,726)
Acquisition adjustments (1)
— (79,466)
Lloyd’s deferred year of account results(51,770)(38,194)
Other deferred tax liabilities(9,970)(7,025)
Deferred tax liabilities(162,362)(212,319)
Net deferred tax assets (liabilities)$278,474 $72,850 
(1) During the year ended December 31, 2024, the Company assessed that certain deferred tax assets and deferred tax liabilities related to acquisitions were no longer required.
The following table summarizes total operating and capital loss carryforwards and tax credits:
At December 31,20242023
Operating and Capital Loss Carryforwards(1)
Singapore operating loss carryforward
$91,924 $70,815 
U.K. operating loss carryforward
216,928 293,533 
U.K. capital loss carryforward
93 — 
Ireland operating loss carryforward27 78,154 
Ireland capital loss carryforward1,372 716 
Switzerland operating loss carryforward(2)
68,573 123,453 
U.S. capital loss carryforward(3)
59,434 — 
Tax Credits(1)
Ireland foreign tax credit$333 $6,922 
U.K. foreign tax credit504 2,605 
U.S. foreign tax credit(4)
1,577 2,074 
(1)    At December 31, 2024, the Singapore, U.K., and Ireland operating and capital loss carryforwards and tax credits can be carried forward indefinitely.
(2)    At December 31, 2024, the Swiss net operating loss carryforwards expire in 2029.
(3)    At December 31, 2024, the U.S. capital loss carryforwards expire in 2029.
(4)    At December 31, 2024, the U.S. foreign tax credits expire in 2032.

The following table shows an analysis of the movement in the Company's valuation allowance:
At December 31,20242023
Income tax expense (benefit):
Valuation allowance - beginning of year$31,688 $39,782 
Operating loss carryforwards(6,572)(8,713)
Foreign tax credit(6,589)4,184 
U.K. branch assets and other foreign rate differentials(1,567)(3,565)
Capital loss carryforwards and impaired investments
261 — 
Valuation allowance - end of year$17,221 $31,688 
Accumulated other comprehensive income (loss):
Valuation allowance - beginning of year$7,023 $20,287 
Change in investment - related items(4,415)(13,264)
Valuation allowance - end of year2,608 7,023 
Total valuation allowance - end of year$19,829 $38,711 
At December 31, 2024 and 2023, the Company had a full valuation allowance on operating loss carryforwards relating to operations in Singapore, Ireland and Switzerland, foreign tax credits available in Ireland and certain other deferred tax assets related to branch operations.
In 2024, the valuation allowance decreased by $19 million (2023: $21 million). The net gain incurred by the AXIS Re SE, the Irish reinsurance company, resulted in the release of a valuation allowance of $13 million (2023: $25 million) against the net deferred tax assets of AXIS Re SE and AXIS Re Europe, the Swiss branch of the Irish reinsurance company, of which $8 million (2023: $12 million) was released in net income (loss) and $5 million (2023: $13 million) was released in other comprehensive income (loss). In 2024, a valuation allowance of $7 million was released against foreign tax credits held by AXIS Specialty Europe and in 2023 a valuation allowance of $6 million was recorded against foreign tax credits held by AXIS Specialty Europe SE. In 2023, a valuation allowance of $2 million was also released against U.S. foreign tax credits that were utilized.
At December 31, 2024 and 2023, the Company's U.S. operations had a deferred tax asset of $19 million and $41 million, respectively, for the unrealized losses on its fixed maturities that were recorded in other comprehensive income (loss). The Company examined the need for a valuation allowance and after considering all positive and negative evidence concluded a valuation allowance against its net unrealized investment losses in the U.S was not required.

At December 31, 2024 and 2023, the Company’s Bermuda operations had a deferred tax asset of $17 million and $13 million, respectively for the unrealized losses on its fixed maturities that were recorded in other comprehensive income (loss). The Company examined the need for a valuation allowance and after considering all positive and negative evidence concluded a valuation allowance against its net unrealized investment losses in Bermuda was not required.
At December 31, 2024, the Company’s Bermuda operations had a deferred tax asset of $177 million related to the Bermuda ETA. The Company examined the need for a valuation allowance and after considering all positive and negative evidence concluded a valuation allowance against this asset in Bermuda was not required.

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, 2024 and 2023, there were no unrecognized tax benefits.
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 31,202420232022
Income (loss) before income taxes
Bermuda (domestic)$323,688 $213,539 $236,781 
Foreign702,503 189,067 8,340 
 Total income before income taxes$1,026,191 $402,606 $245,121 
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.8.4 %(2.5 %)0.2 %
Europe6.0 %11.9 %1.9 %
Valuation allowance(1.4 %)(2.0 %)9.5 %
Prior year adjustments(1.5 %)1.3 %(0.3 %)
Incremental branch taxes1.1 %0.9 %(0.4 %)
Change in enacted tax rate(1)
(1.9 %)(3.3 %)(2.2 %)
Bermuda economic transition adjustment(17.2 %)— %— %
Change in unrealized investment gain/(loss)
0.6 %— %— %
Withholding tax
0.3 %— %— %
Other0.2 %0.2 %0.3 %
Actual tax rate(5.4 %)6.5 %9.0 %
(1)    At December 31, 2024, the change in enacted tax rate represents the rate change related to deferred tax assets and deferred tax liabilities on acquisition adjustments no longer required. At December 31, 2023, the change in enacted tax rate represents the enactment of the Bermuda Corporate Income Tax Act of 2023 related to unrealized investment losses included in other comprehensive income (loss). At December 31, 2022, the change in enacted tax rate included a change in the UK tax rate from 19% to 25% and in Belgium from 30% to 25%.