Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Components of Current and Deferred Income Tax Expense (Benefit)

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

	Year Ended December 31,
In thousands	2014		2013		2012
Current income tax expense (benefit):
Federal and foreign	$	27,290	$	23,703	$	39,242
State and local		1,036		446		146
Subtotal		28,326		24,149		39,388
Deferred income tax expense (benefit):
Federal and foreign		16,881		4,658		(11,414	)
State and local		—		—		—
Subtotal		16,881		4,658		(11,414	)
Total income tax expense (benefit)	$	45,207	$	28,807	$	27,974

Reconciliation of Total Income Taxes Applicable to Pre-Tax Operating Income and Amounts Computed by Applying Federal Statutory Income Tax Rate to Pre-Tax Operating Income

A reconciliation of total income taxes applicable to pre-tax operating income and the amounts computed by applying the federal statutory income tax rate to the pre-tax operating income were as follows:

	Year Ended December 31,
In thousands	2014					2013					2012
Computed expected tax expense	$	49,187		35.0	%	$	32,299		35.0	%	$	32,109		35.0	%
Tax-exempt interest		(4,771	)	-3.4	%		(3,839	)	-4.2	%		(4,443	)	-4.8	%
Dividends received deduction		(1,257	)	-0.9	%		(897	)	-1.0	%		(799	)	-0.9	%
Proration of DRD and Tax-exempt interest		904		0.6	%		710		0.8	%		786		0.9	%
Current state and local income taxes, net of federal income tax deduction		674		0.5	%		290		0.3	%		95		0.1	%
Other		470		0.3	%		244		0.3	%		226		0.2	%
Actual tax expense and rate	$	45,207		32.2	%	$	28,807		31.2	%	$	27,974		30.5	%

Tax Effects of Temporary Differences That Give Rise to Federal, Foreign, State and Local Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to federal, foreign, state and local deferred tax assets and deferred tax liabilities were as follows:

	December 31,
In thousands	2014			2013
Deferred tax assets:
Loss reserve discount	$	24,820		$	27,822
Unearned premiums		29,080			25,706
Compensation related		10,586			6,782
State and local net deferred tax assets		777			555
Other		1,834			3,889
Total gross deferred tax assets		67,097			64,754
Less: Valuation allowance		(777	)		(555	)
Total deferred tax assets	$	66,320		$	64,199
Deferred tax liabilities:
Net unrealized gains/losses on securities		(24,832	)		(9,119	)
Deferred acquisition costs		(22,120	)		(19,258	)
Lloyd’s year of account deferral		(13,578	)		(4,381	)
Net unrealized foreign exchange		(4,470	)		(3,516	)
Other		(2,787	)		(4,119	)
Total deferred tax liabilities	$	(67,787	)	$	(40,393	)
Net deferred income tax asset (liability)	$	(1,467	)	$	23,806