Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Components Of Deferred Tax Assets And Liabilities

The significant components of deferred tax assets and liabilities included in the consolidated balance sheets at December 31 were as follows:

(Dollars in millions)	At December 31,
	2021		2020
Deferred tax assets:
Unearned premiums	$	131	$	119
Loss and loss expense reserves	92		81
Net operating loss on international earnings	34		26
Deferred international earnings	31		45
Other	50		41
Deferred tax assets before valuation allowance	338		312
Valuation allowance for international operations	53		56
Deferred tax assets net of valuation allowance	285		256
Deferred tax liabilities:
Investment gains and other, net	1,684		1,240
Deferred acquisition costs	155		143
Life policy reserves	116		121
Investments	38		13
Other	36		38
Total gross deferred tax liabilities	2,029		1,555
Net deferred income tax liability	$	1,744	$	1,299

Schedule of Income before Income Tax

For financial reporting purposes, income (loss) before income taxes includes the following components:

(Dollars in millions)	For the years ended December 31,
	2021		2020		2019
United States	$	3,644	$	1,521	$	2,440
International	26		(22)		32
Total income before income taxes	$	3,670	$	1,499	$	2,472

Schedule of The Provision (Benefit) of Income Taxes

The provision for income taxes consists of:

(Dollars in millions)	For the years ended December 31,
	2021		2020		2019
Provision (benefit) for income taxes:
Current – United States federal	$	248	$	147	$	137
International	(1)		—		(5)
Total current	247		147		132
Deferred – United States federal	477		136		338
International	—		—		5
Total deferred	477		136		343
Total provision for income taxes	$	724	$	283	$	475

Differences Between The 35 Percent Statutory Income Tax Rate And Effective Income Tax Rate

The differences between the 21% statutory federal income tax rate and our effective income tax rate were as follows:

(Dollars in millions)	Years ended December 31,
	2021				2020				2019
Tax at statutory rate:	$	771	21.0	%	$	315	21.0	%	$	519	21.0	%
Increase (decrease) resulting from:
Tax-exempt income from municipal bonds	(20)		(0.5)		(20)		(1.3)		(19)		(0.8)
Dividend received exclusion	(20)		(0.5)		(17)		(1.1)		(16)		(0.6)
Other	(7)		(0.3)		5		0.3		(9)		(0.4)
Provision for income taxes	$	724	19.7	%	$	283	18.9	%	$	475	19.2	%

Reconciliation of Cincinnati Global Valuation Allowance

The following is a tabular reconciliation of the total amounts of our Cincinnati Global valuation allowance.

(Dollars in millions)	Years ended December 31,
		2021		2020		2019
Valuation allowance, January 1		$	56	$	41	$	—
Acquisition accounting amount		—		—		55
Current year operations		(3)		15		(14)
Valuation allowance, December 31		$	53	$	56	$	41