Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Current and Deferred Components of Income Tax Expense (Benefit)

The current and deferred components of income tax expense (benefit) are as follows:

Year Ended December 31	2020			2019		2018
(In millions)

Income tax expense (benefit):
Federal:
Current	$	43		$	108	$	6
Deferred		(260	)		47		85
State and city:
Current		1			18		15
Deferred		13			22		9
Foreign		30			53		13
Total	$	(173	)	$	248	$	128

Reconciliation between Federal Income Tax Expense at Statutory Rates and Actual Income Tax Expense (Benefit)

The components of U.S. and foreign income before income tax and a reconciliation between the federal income tax expense at statutory rates and the actual income tax expense (benefit) is as follows:

Year Ended December 31	2020			2019			2018
(In millions)

Income (loss) before income tax:
U.S.	$	(768	)	$	1,145		$	775
Foreign		(696	)		(26	)		59
Total	$	(1,464	)	$	1,119		$	834

Income tax expense (benefit) at statutory rate	$	(307	)	$	235		$	175
Increase (decrease) in income tax expense (benefit) resulting from:
Effect of the 2017 tax act					(14	)		(6	)
Exempt investment income		(49	)		(50	)		(64	)
Foreign related tax differential		63			(55	)		1
Taxes related to domestic affiliate					(15	)		(7	)
Partnership earnings not subject to taxes								(14	)
Valuation allowance		55			12			12
Unrecognized tax positions, settlements and adjustments relating to prior years		68			97			2
State taxes		4			37			20
Other		(7	)		1			9
Income tax expense (benefit)	$	(173	)	$	248		$	128

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding tax carryforwards and interest and penalties, is as follows:

Year Ended December 31	2020			2019			2018
(In millions)

Balance at January 1	$	121		$	58		$	84
Additions for tax positions related to the current year		68			86			3
Additions for tax positions related to a prior year					2			20
Reductions for tax positions related to a prior year					(23	)		(48	)
Lapse of statute of limitations					(2	)		(1	)
Reduction due to deconsolidation of Diamond Offshore		(187	)
Balance at December 31	$	2		$	121		$	58

Deferred Tax Assets and Liabilities

The following table summarizes deferred tax assets and liabilities:

December 31	2020			2019
(In millions)

Deferred tax assets:
Insurance reserves:
Property and casualty claim and claim adjustment expense reserves	$	157		$	129
Unearned premium reserves		174			153
Receivables		11			11
Employee benefits		197			212
Deferred retroactive reinsurance benefit		83			82
Net operating loss carryforwards		13			275
Tax credit carryforwards		11			47
Basis differential in investment in subsidiary		8			8
Disallowed interest deduction					41
Other		189			179
Total deferred tax assets		843			1,137
Valuation allowance		(13	)		(187	)
Net deferred tax assets		830			950

Deferred tax liabilities:
Deferred acquisition costs		(93	)		(83	)
Net unrealized gains		(441	)		(263	)
Property, plant and equipment		(721	)		(848	)
Basis differential in investment in subsidiary		(432	)		(679	)
Other liabilities		(165	)		(208	)
Total deferred tax liabilities		(1,852	)		(2,081	)

Net deferred tax liabilities (a)	$	(1,022	)	$	(1,131	)

(a)	Includes $43 and $37 of deferred tax assets reflected in Other assets in the Consolidated Balance Sheets at December 31, 2020 and 2019.