Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Tax Expense (Benefit)

The following table presents income tax expense (benefit) for 2019, 2018 and 2017:

	Federal			State		Foreign			Total
	($ in millions)
Year ended December 31, 2019
Current	$	87.9		$	12.0	$	70.8		$	170.7
Deferred		62.9			0.5		(0.7	)		62.7
	$	150.8		$	12.5	$	70.1		$	233.4
Year ended December 31, 2018
Current	$	(83.3	)	$	5.6	$	32.0		$	(45.7	)
Deferred		29.9			0.9		(0.1	)		30.7
	$	(53.4	)	$	6.5	$	31.9		$	(15.0	)
Year ended December 31, 2017
Current	$	(41.3	)	$	2.7	$	41.0		$	2.4
Deferred		(66.6	)		0.6		(0.2	)		(66.2	)
	$	(107.9	)	$	3.3	$	40.8		$	(63.8	)

Difference between Federal Income Tax Rate and Effective Income Tax Rate

The following table presents the difference between the federal income tax rate and the effective income tax rate:

	Year Ended December 31,
	2019			2018			2017
Federal income tax rate		21.0	%		21.0	%		35.0	%
Foreign tax credits		0.4			(0.3	)		(6.4	)
Income subject to dividends-received deduction		(0.3	)		(18.3	)		(25.5	)
Tax-exempt interest		(1.0	)		(36.0	)		(94.1	)
State taxes, net of federal tax benefit		0.9			13.8			6.5
Prior period adjustment		0.2			(0.1	)		(3.3	)
Tax benefit from sale of subsidiary		—			—			(54.1	)
Other, net		(0.4	)		(18.1	)		(32.0	)
Effective tax rate		20.8	%		(38.0	)%		(173.9	)%

Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Deferred Tax Liabilities

The following table presents the tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities as of December 31, 2019 and 2018:

	As of December 31,
	2019			2018
	($ in millions)
Deferred tax assets:
Loss and LAE reserves	$	118.9		$	122.9
Minimum tax credit carry forward		—			68.8
Compensation accruals		94.1			88.1
Unearned premiums		97.4			85.9
OTTI losses		6.5			5.4
State net operating loss carry forward		22.8			23.5
Other		134.9			89.8
Gross deferred tax assets before valuation allowance		474.6			484.4
Valuation allowance		(22.8	)		(23.5	)
Gross deferred tax assets		451.8			460.9
Deferred tax liabilities:
Net unrealized gains on investments		274.8			127.2
Deferred acquisition costs		113.4			101.1
Purchase accounting adjustments		11.7			11.3
Other		46.0			56.4
Gross deferred tax liabilities		445.9			296.0
Net deferred tax assets	$	5.9		$	164.9

Tax Year Returns that Remain Subject to Examination by Major Tax Jurisdiction

The following table presents the tax years of Alleghany and TransRe tax returns that remain subject to examination by major tax jurisdictions as of December 31, 2019.

Major Tax Jurisdiction	Open Tax Years
Australia	2015-2019
Canada	2015-2019
France	2017-2019
Germany	2013-2019
Hong Kong	2013-2019
Japan	2019
Singapore	2016-2019
Switzerland	2017-2019
U.K.	2017-2019
U.S.	2015-2019