Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Composition of income tax expense included in consolidated statement of income and shareholders' equity [Table Text Block]

The following table presents the components of income tax expense included in the amounts reported in the Company’s consolidated financial statements:

(for the year ended December 31, in millions)	2020		2019		2018
Composition of income tax expense included in the consolidated statement of income
Current expense:
Federal	$	532	$	546	$	424
Foreign	35		7		41
State	4		6		8
Total current tax expense	571		559		473
Deferred benefit:
Federal	(29)		(33)		(13)
Foreign	(2)		(10)		(22)
Total deferred tax benefit	(31)		(43)		(35)
Total income tax expense included in the consolidated  statement of income	540		516		438
Composition of income tax expense (benefit) included  in shareholders’ equity
Expense (benefit) relating to changes in the unrealized gain (loss) on investments, unrealized loss on foreign exchange and other items in other comprehensive income (loss)	490		641		(349)
Total income tax expense included in the  consolidated financial statements	$	1,030	$	1,157	$	89

Effective tax rate [Table Text Block]

The following is a reconciliation of income tax expense at the U.S. federal statutory income tax rate to the income tax expense reported in the Company’s consolidated statement of income:

(for the year ended December 31, in millions)	2020			2019			2018
Income (loss) before income taxes
U.S.	$	3,095		$	3,211		$	3,039
Foreign	142			(73)			(78)
Total income before income taxes	3,237			3,138			2,961
Effective tax rate
Statutory tax rate	21		%	21		%	21		%
Expected federal income tax expense	680			659			622
Tax effect of:
Nontaxable investment income	(147)			(149)			(150)
Other, net	7			6			(34)
Total income tax expense	$	540		$	516		$	438
Effective tax rate	17		%	16		%	15		%

Deferred tax assets and liabilities [Table Text Block]

The net deferred tax liability comprises the tax effects of temporary differences related to the following assets and liabilities:

(at December 31, in millions)	2020		2019
Deferred tax assets
Claims and claim adjustment expense reserves	$	575	$	551
Unearned premium reserves	560		539
Compensation-related liabilities	110		97
Net operating losses	87		62
Other	180		181
Total gross deferred tax assets	1,512		1,430
Less: valuation allowance	21		27
Adjusted gross deferred tax assets	1,491		1,403
Deferred tax liabilities
Claims and claim adjustment expense reserve discounting (transition rule)	96		115
Deferred acquisition costs	445		427
Investments	1,225		781
Internally developed software	93		94
Depreciation	130		70
Other	60		53
Total gross deferred tax liabilities	2,049		1,540
Net deferred tax liability	$	558	$	137

Net operating loss amounts by jurisdiction and year of expiration [Table Text Block]

The NOL amounts by jurisdiction and year of expiration are as follows:

(in millions)	Amount		Year of  expiration
United States	$	2	2035 - 2036
Canada	$	13	2035 - 2040
Republic of Ireland	$	138	None
United Kingdom	$	343	None

Reconciliation of unrecognized tax benefits [Table Text Block]

The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2020 and 2019:

(in millions)	2020		2019
Balance at January 1	$	37	$	31
Additions for tax positions of prior years	16		8
Reductions for tax positions of prior years	—		—
Reductions based on tax positions related to current year	—		—
Expiration of statute of limitations	(4)		(2)
Balance at December 31	$	49	$	37