Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Deferred Tax Assets and Liabilities

Deferred and Current Tax Assets (Liabilities)


	As of December 31,
	2022		2021
	(in millions)
Net deferred tax assets (liabilities)	$	114	$	(33)
Net current tax assets (liabilities)	63		(43)

Components of Net Deferred Tax Assets (Liabilities)


	As of December 31,
	2022		2021
	(in millions)
Deferred tax assets:
Unearned premium reserves, net	$	26	$	51
Net unrealized investment losses	70		—
Rent	18		17
Investments	7		—
Foreign tax credit	5		24
Net operating loss	25		28
Depreciation	30		27
Deferred compensation	30		29
Deferred balances related to non-U.S. affiliates	14		—
Other	23		19
Total deferred tax assets	248		195

Deferred tax liabilities:
Net unrealized investment gains	—		74
Investments	—		30
DAC	20		20
Loss and LAE reserve	74		44
Lease	14		16
Other	21		20
Total deferred tax liabilities	129		204
Less: Valuation allowance	5		24
Net deferred tax assets (liabilities)	$	114	$	(33)

Effective Tax Rate Reconciliation

A reconciliation of the difference between the provision for income taxes and the expected tax provision at statutory rates in taxable jurisdictions is presented below.

Effective Tax Rate Reconciliation


	Year Ended December 31,
	2022			2021			2020
	(in millions)
Expected tax provision (benefit)	$	23		$	76		$	83
Tax-exempt interest	(14)			(19)			(20)
Change in liability for uncertain tax positions	—			—			(17)
Return to provision adjustment	(20)			(4)			(7)
Noncontrolling interest	(3)			(8)			(1)
State taxes	12			7			4
Taxes on reinsurance	—			(2)			9
Foreign taxes	6			8			(3)
Stock based compensation	5			4			—
Other	2			(4)			(3)
Total provision (benefit) for income taxes	$	11		$	58		$	45

Effective tax rate	7.2		%	12.2		%	10.9		%

Pretax Income (Loss) by Tax Jurisdiction

The following tables present pre-tax income and revenue by jurisdiction.

Pre-tax Income (Loss) by Tax Jurisdiction


	Year Ended December 31,
	2022		2021		2020
	(in millions)
U.S.	$	189	$	378	$	385
Bermuda	44		115		16
U.K.	(69)		(8)		13
France	(16)		(8)		(1)
Total	$	148	$	477	$	413

Revenue by Tax Jurisdiction


	Year Ended December 31,
	2022		2021		2020
	(in millions)
U.S.	$	661	$	685	$	894
Bermuda	84		123		151
U.K.	(15)		41		60
France	(8)		(3)		6
Other	1		2		4
Total	$	723	$	848	$	1,115