Federal and Foreign Income Tax (Tables)

12 Months Ended

Dec. 31, 2013

Income tax expense and taxes paid consisted of the following components:


	Years Ended December 31
	2013		2012		2011
	(in millions)
Income tax expense
Current tax
United States	$	791	$	276	$	260
Foreign		91		143		236
Deferred tax, principally United States		10		32		25

	$	892	$	451	$	521


Federal and foreign income taxes paid	$	789	$	472	$	598

Reconciliation of Effective Income Tax Rate and Statutory Federal Corporate Tax Rate

The effective income tax rate is different than the statutory federal corporate tax rate. The reasons for the different effective tax rate were as follows:


	Years Ended December 31
	2013						2012						2011
	Amount			% of Pre-Tax Income			Amount			% of Pre-Tax Income			Amount			% of Pre-Tax Income
	(in millions)
Income before federal and foreign income tax	$	3,237					$	1,996					$	2,199

Tax at statutory federal income tax rate	$	1,133			35.0	%	$	699			35.0	%	$	770			35.0	%
Tax exempt interest income		(222	)		(6.8	)		(233	)		(11.7	)		(243	)		(11.0	)
Other, net		(19	)		(.6	)		(15	)		(.7	)		(6	)		(.3	)

Federal and foreign income tax	$	892			27.6	%	$	451			22.6	%	$	521			23.7	%

Tax Effects of Temporary Differences that Gave Rise to Deferred Income Tax Assets and Liabilities

The tax effects of temporary differences that gave rise to deferred income tax assets and liabilities were as follows:


	December 31
	2013		2012
	(in millions)
Deferred income tax assets
Unpaid losses and loss expenses	$	524	$	605
Unearned premiums		350		341
Foreign tax credits		867		870
Employee compensation		142		119
Postretirement benefits		95		324
Other-than-temporary impairment losses		291		294

Total		2,269		2,553

Deferred income tax liabilities
Deferred policy acquisition costs		356		341
Unremitted earnings of foreign subsidiaries		970		951
Unrealized appreciation of investments		660		1,084
Other invested assets		184		225
Other, net		52		114

Total		2,222		2,715

Net deferred income tax asset (liability)	$	47	$	(162	)