Income Taxes (Tables)

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income before Income Taxes from its Non-U.S. Subsidiaries and U.S. Subsidiaries

The Company’s income before income taxes from its non-U.S. subsidiaries and U.S. subsidiaries for the quarters and nine months ended September 30, 2019 and 2018 were as follows:

Quarter Ended September 30, 2019 (Dollars in thousands)	Non-U.S. Subsidiaries			U.S. Subsidiaries			Eliminations			Total
Revenues:
Gross premiums written	$	19,980		$	137,197		$	—		$	157,177
Net premiums written	$	19,990		$	118,846		$	—		$	138,836
Net premiums earned	$	19,512		$	113,800		$	—		$	133,312
Net investment income		7,212			7,732			(3,596	)		11,348
Net realized investment gains (losses)		375			(3,065	)		—			(2,690	)
Other income (loss)		(234	)		498			—			264
Total revenues		26,865			118,965			(3,596	)		142,234
Losses and Expenses:
Net losses and loss adjustment expenses		7,628			65,955			—			73,583
Acquisition costs and other underwriting expenses		6,201			47,165			—			53,366
Corporate and other operating expenses		1,514			2,344			—			3,858
Interest expense		351			8,268			(3,596	)		5,023
Income (loss) before income taxes	$	11,171		$	(4,767	)	$	—		$	6,404

Quarter Ended September 30, 2018 (Dollars in thousands)	Non-U.S. Subsidiaries			U.S. Subsidiaries			Eliminations			Total
Revenues:
Gross premiums written	$	9,361		$	126,245		$	—		$	135,606
Net premiums written	$	9,356		$	106,877		$	—		$	116,233
Net premiums earned	$	30,220		$	90,308		$	—		$	120,528
Net investment income		12,013			7,204			(7,467	)		11,750
Net realized investment gains (losses)		(273	)		5,592			—			5,319
Other income (loss)		(82	)		493			—			411
Total revenues		41,878			103,597			(7,467	)		138,008
Losses and Expenses:
Net losses and loss adjustment expenses		14,877			65,616			—			80,493
Acquisition costs and other underwriting expenses		13,188			35,492			—			48,680
Corporate and other operating expenses		1,237			2,238			—			3,475
Interest expense		356			12,035			(7,467	)		4,924
Income (loss) before income taxes	$	12,220		$	(11,784	)	$	—		$	436

Nine Months Ended September 30, 2019 (Dollars in thousands)	Non-U.S. Subsidiaries			U.S. Subsidiaries		Eliminations			Total
Revenues:
Gross premiums written	$	69,588		$	409,111	$	—		$	478,699
Net premiums written	$	69,591		$	351,730	$	—		$	421,321
Net premiums earned	$	52,798		$	330,804	$	—		$	383,602
Net investment income		22,254			20,824		(10,685	)		32,393
Net realized investment gains		1,768			9,522		—			11,290
Other income (loss)		(256	)		1,530		—			1,274
Total revenues		76,564			362,680		(10,685	)		428,559
Losses and Expenses:
Net losses and loss adjustment expenses		24,076			177,903		—			201,979
Acquisition costs and other underwriting expenses		16,556			137,087		—			153,643
Corporate and other operating expenses		4,822			6,880		—			11,702
Interest expense		1,059			24,714		(10,685	)		15,088
Income before income taxes	$	30,051		$	16,096	$	—		$	46,147

Nine Months Ended September 30, 2018 (Dollars in thousands)	Non-U.S. Subsidiaries			U.S. Subsidiaries			Eliminations			Total
Revenues:
Gross premiums written	$	39,976		$	378,694		$	—		$	418,670
Net premiums written	$	39,970		$	320,587		$	—		$	360,557
Net premiums earned	$	115,353		$	227,094		$	—		$	342,447
Net investment income		39,527			21,428			(26,847	)		34,108
Net realized investment gains (losses)		(437	)		8,270			—			7,833
Other income (loss)		(179	)		1,468			—			1,289
Total revenues		154,264			258,260			(26,847	)		385,677
Losses and Expenses:
Net losses and loss adjustment expenses		48,210			147,216			—			195,426
Acquisition costs and other underwriting expenses		50,475			90,721			—			141,196
Corporate and other operating expenses		10,550			13,103			—			23,653
Interest expense		6,749			34,823			(26,847	)		14,725
Income (loss) before income taxes	$	38,280		$	(27,603	)	$	—		$	10,677

Components of Income Tax Benefit

The following table summarizes the components of income tax benefit:

	Quarters Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2019			2018			2019			2018
Current income tax expense (benefit):
Foreign	$	(17	)	$	62		$	(35	)	$	326
U.S. Federal		—			(732	)		—			—
Total current income tax expense (benefit)		(17	)		(670	)		(35	)		326
Deferred income tax expense (benefit):
U.S. Federal		(300	)		(2,622	)		5,198			(6,270	)
Total deferred income tax expense (benefit)		(300	)		(2,622	)		5,198			(6,270	)
Total income tax expense (benefit)	$	(317	)	$	(3,292	)	$	5,163		$	(5,944	)

Differences in Tax Provision for Financial Statement Purposes and Expected Tax Provision at Weighted Average Tax Rate

The following table summarizes the differences between the tax provision for financial statement purposes and the expected tax provision at the weighted average tax rate:

	Quarters Ended September 30,
	2019						2018
(Dollars in thousands)	Amount			% of Pre- Tax Income			Amount			% of Pre- Tax Income
Expected tax provision at weighted average tax rate	$	(1,001	)		(15.6	%)	$	(2,494	)		(571.9	%)
Adjustments:
Tax exempt interest		—			—			—			—
Dividend exclusion		(33	)		(0.5	)		(68	)		(15.6	)
Base Erosion Anti-Abuse Tax		—			—			(731	)		(167.7	)
Non-deductible interest		695			10.8			—			—
Other		22			0.3			1			0.2
Effective income tax benefit	$	(317	)		(5.0	%)	$	(3,292	)		(755.0	%)

	Nine Months Ended September 30,
	2019						2018
(Dollars in thousands)	Amount			% of Pre- Tax Income			Amount			% of Pre- Tax Income
Expected tax provision at weighted average tax rate	$	3,380			7.3	%	$	(5,527	)		(51.8	%)
Adjustments:
Tax exempt interest		(1	)		—			(5	)		—
Dividend exclusion		(256	)		(0.6	)		(203	)		(1.9	)
Base Erosion Anti-Abuse Tax		—			—			—			—
Non-deductible interest		2,063			4.5			—			—
Other		(23	)		—			(209	)		(2.0	)
Effective income tax expense (benefit)	$	5,163			11.2	%	$	(5,944	)		(55.7	%)