Income Taxes (Tables)

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

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

The Company’s income (loss) before income taxes from its non-U.S. subsidiaries and U.S. subsidiaries for the quarters and nine months ended September 30, 2021 and 2020 were as follows:

Quarter Ended September 30, 2021 (Dollars in thousands)	Non-U.S. Subsidiaries		U.S. Subsidiaries			Eliminations		Total
Revenues:
Gross written premiums	$	—	$	174,303		$	—	$	174,303
Net written premiums	$	—	$	162,299		$	—	$	162,299
Net earned premiums	$	—	$	157,565		$	—	$	157,565
Net investment income		—		9,344			—		9,344
Net realized investment losses		—		(310	)		—		(310	)
Other income		—		389			—		389
Total revenues		—		166,988			—		166,988
Losses and Expenses:
Net losses and loss adjustment expenses		—		109,195			—		109,195
Acquisition costs and other underwriting expenses		—		59,282			—		59,282
Corporate and other operating expenses		—		5,387			—		5,387
Interest expense		—		2,596			—		2,596
Loss before income taxes	$	—	$	(9,472	)	$	—	$	(9,472	)

Quarter Ended September 30, 2020 (Dollars in thousands)	Non-U.S. Subsidiaries			U.S. Subsidiaries			Eliminations			Total
Revenues:
Gross written premiums	$	13,085		$	130,664		$	—		$	143,749
Net written premiums	$	13,085		$	117,526		$	—		$	130,611
Net earned premiums	$	9,983		$	130,319		$	—		$	140,302
Net investment income		4,054			9,851			(2,159	)		11,746
Net realized investment gains		1,511			5,812			—			7,323
Other income		164			378			—			542
Total revenues		15,712			146,360			(2,159	)		159,913
Losses and Expenses:
Net losses and loss adjustment expenses		519			96,629			—			97,148
Acquisition costs and other underwriting expenses		3,584			49,684			—			53,268
Corporate and other operating expenses		17,283			3,913			—			21,196
Interest expense		193			5,586			(2,159	)		3,620
Loss on extinguishment of debt		3,060			—			—			3,060
Loss before income taxes	$	(8,927	)	$	(9,452	)	$	—		$	(18,379	)

Nine Months Ended September 30, 2021 (Dollars in thousands)	Non-U.S. Subsidiaries		U.S. Subsidiaries		Eliminations		Total
Revenues:
Gross written premiums	$	—	$	513,097	$	—	$	513,097
Net written premiums	$	—	$	470,635	$	—	$	470,635
Net earned premiums	$	—	$	450,673	$	—	$	450,673
Net investment income		—		29,813		—		29,813
Net realized investment gains		—		7,342		—		7,342
Other income		—		1,287		—		1,287
Total revenues		—		489,115		—		489,115
Losses and Expenses:
Net losses and loss adjustment expenses		—		290,916		—		290,916
Acquisition costs and other underwriting expenses		—		171,259		—		171,259
Corporate and other operating expenses		—		15,992		—		15,992
Interest expense		—		7,887		—		7,887
Income before income taxes	$	—	$	3,061	$	—	$	3,061

Nine Months Ended September 30, 2020 (Dollars in thousands)	Non-U.S. Subsidiaries			U.S. Subsidiaries			Eliminations			Total
Revenues:
Gross written premiums	$	46,654		$	417,368		$	—		$	464,022
Net written premiums	$	46,654		$	370,333		$	—		$	416,987
Net earned premiums	$	53,384		$	373,233		$	—		$	426,617
Net investment income		17,336			11,324			(9,144	)		19,516
Net realized investment losses		(3,867	)		(18,465	)		—			(22,332	)
Other income		148			1,325			—			1,473
Total revenues		67,001			367,417			(9,144	)		425,274
Losses and Expenses:
Net losses and loss adjustment expenses		12,874			229,218			—			242,092
Acquisition costs and other underwriting expenses		17,828			145,430			—			163,258
Corporate and other operating expenses		23,357			10,680			—			34,037
Interest expense		869			21,472			(9,144	)		13,197
Loss on extinguishment of debt		3,060			—			—			3,060
Income (loss) before income taxes	$	9,013		$	(39,383	)	$	—		$	(30,370	)

Components of Income Tax Expense (Benefit)

The following table summarizes the components of income tax expense (benefit):

	Quarters Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2021			2020			2021			2020
Current income tax expense:
U.S. Federal	$	11		$	—		$	11		$	—
Foreign		—			130			—			130
Total current income tax expense	$	11		$	130		$	11		$	130
Deferred income tax benefit:
U.S. Federal	$	(1,770	)	$	(3,339	)	$	(1,129	)	$	(8,303	)
Total deferred income tax benefit		(1,770	)		(3,339	)		(1,129	)		(8,303	)
Total income tax benefit	$	(1,759	)	$	(3,209	)	$	(1,118	)	$	(8,173	)

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,
	2021						2020
(Dollars in thousands)	Amount			% of Pre- Tax Income			Amount			% of Pre- Tax Income
Expected tax provision at weighted average tax rate	$	(1,989	)		21.0	%	$	(1,985	)		10.8	%
Adjustments:
Tax exempt interest		—			—			(1	)		—
Dividend exclusion		(20	)		0.2			(86	)		0.5
Non-deductible interest		—			—			416			(2.3	)
Change in tax status		—			—			(1,704	)		9.3
Parent income treated as partnership for tax		41			(0.4	)		(146	)		0.8
Other		209			(2.2	)		297			(1.6	)
Effective income tax benefit	$	(1,759	)		18.6	%	$	(3,209	)		17.5	%

	Nine Months Ended September 30,
	2021						2020
(Dollars in thousands)	Amount			% of Pre- Tax Income			Amount			% of Pre- Tax Income
Expected tax provision at weighted average tax rate	$	643			21.0	%	$	(8,270	)		27.2	%
Adjustments:
Tax exempt interest		—			—			(2	)		—
Dividend exclusion		(56	)		(1.8	)		(198	)		0.6
Non-deductible interest		—			—			1,773			(5.8	)
Change in tax status		—			—			(1,704	)		5.6
Parent income treated as partnership for tax		(2,145	)		(70.1	)		(146	)		0.5
Other		440			14.4			374			(1.2	)
Effective income tax benefit	$	(1,118	)		(36.5	%)	$	(8,173	)		26.9	%