Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Reconciliation between the Company's federal income tax (expense) benefit at statutory rates and the recorded income tax (expense) benefit

The following table presents a reconciliation between the Company's income tax expense at statutory rates and the recorded income tax expense.


Years ended December 31
	2025				2024				2023
(In millions, except percentages)	Amount		Percent		Amount		Percent		Amount		Percent
Income tax expense at statutory rates	$	(340)	21.0	%	$	(254)	21.0	%	$	(319)	21.0	%
State and local income taxes, net of federal income tax effect (1)	(10)		0.6	%	(12)		1.0	%	(13)		0.8	%
Foreign tax effects
Canada	(22)		1.4	%	(32)		2.6	%	(23)		1.5	%
Other foreign jurisdictions	(9)		0.5	%	(7)		0.6	%	(7)		0.4	%
Effect of cross-border tax laws	(6)		0.3	%	—		—	%	(1)		—	%
Tax credits
Foreign tax credits	25		(1.5)	%	36		(3.0)	%	26		(1.7)	%
Nontaxable or nondeductible items
Tax exempt income	30		(1.8)	%	26		(2.1)	%	31		(2.0)	%
Other nontaxable or nondeductible items	(10)		0.6	%	(9)		0.8	%	(7)		0.5	%

Income tax expense	$	(342)	21.1	%	$	(252)	20.9	%	$	(313)	20.5	%

(1) State taxes in Illinois and Florida made up the majority (greater than 50%) of the tax effect in this category for the years ended December 31, 2025, 2024 and 2023.

Current and deferred components of the Company's income tax (expense) benefit

The following table presents the current and deferred components of the Company's income tax expense.


Years ended December 31
(In millions)	2025		2024		2023
Current tax expense	$	(267)	$	(297)	$	(311)
Deferred tax (expense) benefit	(75)		45		(2)
Total income tax expense	$	(342)	$	(252)	$	(313)

Significant components of the Company's deferred tax assets and liabilities

The deferred tax effects of the significant components of the Company's deferred tax assets and liabilities are presented in the following table.


December 31
(In millions)	2025		2024
Deferred Tax Assets:
Insurance reserves:
Property and casualty claim and claim adjustment expense reserves	$	276	$	234
Unearned premium reserves	227		225

Deferred non-insurance warranty revenue	53		59
Employee benefits	7		13
Deferred retroactive reinsurance benefit	99		89
Net unrealized losses	258		494
Other assets	101		107
Gross deferred tax assets	1,021		1,221
Deferred Tax Liabilities:
Investment valuation differences	168		130
Deferred acquisition costs	143		140
Policyholder reserves	25		48
Software and hardware	57		17
Other liabilities	53		36
Gross deferred tax liabilities	446		371
Net deferred tax asset	$	575	$	850

Schedule of income taxes paid, net

The following table presents cash payments made for federal, state and foreign income taxes (net of refunds).


Years ended December 31
(In millions)	2025		2024		2023
Federal	$	204	$	186	$	263
State	11		12		15
Foreign
Canada	18		57		(5)
Other	30		26		9
Total cash payments for income taxes	$	263	$	281	$	282

The following table presents the Company's U.S. and foreign income before income tax.


Years ended December 31
(In millions)	2025		2024		2023
Income before income tax:
U.S.	$	1,336	$	1,009	$	1,320
Foreign	284		202		198
Total income before income tax	$	1,620	$	1,211	$	1,518

The following table presents the Company's federal, foreign and state and local income tax expense.


Years ended December 31
(In millions)	2025		2024		2023
Income tax expense:
Federal	$	(260)	$	(174)	$	(245)
Foreign	(69)		(63)		(52)
State and local	(13)		(15)		(16)
Total income tax expense	$	(342)	$	(252)	$	(313)