Income taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income taxes

Schedule of net income (loss) before income taxes

(Millions)	2018		2017		2016
Domestic:
Bermuda	$	62.7	$	(95.0)	$	(4.9)
Foreign:
U.S.		(10.1)		(22.4)		(25.3)
U.K.		(14.9)		(27.0)		(7.0)
Sweden		(74.2)		(26.1)		(29.5)
Luxembourg		60.3		43.4		105.3
Netherlands		(0.1)		18.2		(0.1)
Other		—		(1.0)		(0.6)
Total income (loss) before income taxes	$	23.7	$	(109.9)	$	37.9

Schedule of total income tax (expense) benefit

(Millions)	2018		2017		2016
Current tax (expense):
U.S. Federal	$	(7.0)	$	(0.9)	$	2.1
State		(2.2)		(2.0)		(1.7)
Non-U.S.		(19.8)		(3.6)		(11.4)
Total current tax (expense)		(29.0)		(6.5)		(11.0)
Deferred tax (expense) benefit:
U.S. Federal		14.5		(10.7)		16.0
State		—		—		—
Non-U.S.		(25.9)		(9.2)		2.3
Total deferred tax (expense) benefit		(11.4)		(19.9)		18.3
Total income tax (expense) benefit	$	(40.4)	$	(26.4)	$	7.3

Schedule of effective rate reconciliation

(Millions)	2018		2017		2016
Tax (expense) benefit at the statutory rate	$	(5.2)	$	24.2	$	(8.3)
Differences in taxes resulting from:
Tax reserve adjustments		(42.0)		(0.7)		(6.0)
Tax rate change enacted in Sweden		15.4		—		—
Tax on Safety Reserve		(15.3)		—		—
Foreign tax credits		10.8		2.2		6.9
Section 197 Intangible as result of internal restructuring		6.9		—		—
Non-Sweden earnings		2.3		(18.4)		(6.9)
Gain on internal restructuring		(9.1)		—		—
State taxes expense		(2.9)		(0.7)		(1.1)
Change in valuation allowance		2.3		1.4		55.0
Withholding taxes		(1.9)		(0.8)		(1.4)
Tax rate change - other		0.1		(29.7)		—
Tax rate change enacted in Luxembourg		—		0.4		(30.6)
Other, net		(1.8)		(4.3)		(0.3)
Total income tax (expense) benefit on pre-tax earnings	$	(40.4)	$	(26.4)	$	7.3

Schedule of deferred tax assets and liabilities

(Millions)	2018		2017
Deferred income tax assets related to:
Non-U.S. net operating loss carry forwards	$	249.8	$	305.1
U.S. federal net operating loss and capital carry forwards		33.8		34.7
Tax credit carry forwards		28.7		18.3
Loss reserve discount		7.3		8.9
Unearned premiums		3.1		1.5
Deferred interest		2.1		0.2
Incentive compensation and benefits accruals		1.9		2.0
Allowance for doubtful accounts		1.4		1.4
Foreign currency translations on investments and other assets		0.8		—
Net unrealized investment losses		—		1.8
Other items		2.7		3.6
Total gross deferred income tax assets		331.6		377.5
Valuation allowance		(64.3)		(71.8)
Total adjusted deferred tax asset		267.3		305.7
Deferred income tax liabilities related to:
Safety reserve (See Note 18)		261.1		286.6
Intangible assets		28.7		42.0
Deferred acquisition costs		3.1		1.2
Purchase accounting		3.0		2.4
Investment basis differences		2.4		1.1
Net unrealized investment gains		0.3		—
Foreign currency translations on investments and other assets		—		7.3
Other items		3.6		3.2
Total deferred income tax liabilities		302.2		343.8
Net deferred tax (liability) asset	$	(34.9)	$	(38.1)

Schedule of net operating loss and capital loss carryforwards

(Millions)	2018
	United States		Luxembourg		Sweden		U.K.		Total
2019-2023	$	8.7	$	—	$	—	$	—	$	8.7
2024-2038		151.9		0.1		—		—		152.0
No expiration date		—		871.5		273.0		72.0		1,216.5
Total		160.6		871.6		273.0		72.0		1,377.2
Gross deferred tax asset		33.8		226.7		10.8		12.3		283.6
Valuation allowance		—		(64.6)		—		—		(64.6)
Net deferred tax asset	$	33.8	$	162.1	$	10.8	$	12.3	$	219.0

Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits

	Permanent		Temporary		Interest and
(Millions)	differences(1)		differences(2)		penalties(3)		Total
Balance at January 1, 2016	$	19.8	$	6.6	$	—	$	26.4
Changes in prior year tax positions		—		—		—		—
Tax positions taken during the current year		4.4		(2.5)		0.2		2.1
Lapse in statute of limitations		—		—		—		—
Settlements with tax authorities		—		—		—		—
Balance at December 31, 2016	$	24.2	$	4.1	$	0.2	$	28.5
Changes in prior year tax positions		0.2		(0.1)		0.1		0.2
Tax positions taken during the current year		3.8		(2.2)		—		1.6
Lapse in statute of limitations		(0.5)		—		—		(0.5)
Settlements with tax authorities		(0.3)		—		(0.2)		(0.5)
Balance at December 31, 2017	$	27.4	$	1.8	$	0.1	$	29.3
Changes in prior year tax positions		1.4		—		0.1		1.5
Tax positions taken during the current year		36.2		(1.7)		—		34.5
Lapse in statute of limitations		—		—		—		—
Settlements with tax authorities		(0.1)		—		—		(0.1)
Balance at December 31, 2018	$	64.9	$	0.1	$	0.2	$	65.2

(1) Represents the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate.

(2) Represents the amount of unrecognized tax benefits that, if recognized, would create a temporary difference between the reported amount of an item in the Consolidated Balance Sheets and its tax basis.

(3) Net of tax benefit.