Income taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income taxes | 13. Income taxes The Company has subsidiaries and branches that operate in various other jurisdictions around the world that are subject to tax in the jurisdictions in which they operate. The jurisdictions in which the Company's subsidiaries and branches are subject to tax are Belgium, Bermuda, Canada, Luxembourg, Sweden, Switzerland, the United Kingdom, and the United States. The Company recognizes income tax expense or benefit based upon pre-tax income or loss reported in the consolidated statements of income and the provisions of currently enacted tax laws. Effective January 1, 2025, a 15% corporate income tax is applied to the Company’s Bermuda operations as a result of the enactment of the Corporate Income Tax Act 2023 (the “Bermuda CIT”) on December 27, 2023. For the three and six months ended June 30, 2026, the Company recorded income tax expense of $15.8 million and $35.0 million, respectively (2025 - $11.6 million and $24.9 million, respectively) on pre-tax income of $84.3 million and $205.8 million, respectively (2025 - $74.9 million and $150.2 million, respectively). The effective tax rates for the three and six months ended June 30, 2026 were 18.7% and 17.0%, respectively. The difference between the effective tax rate on income from continuing operations and the Bermuda statutory tax rate of 15% is primarily due to income recognized in higher-tax jurisdictions, non-taxable investment gains, and adjustments pursuant to applicable U.S. GAAP guidance on interim period financial reporting of taxes, which are based on the annual estimated effective tax rate. In arriving at the estimated annual effective tax rate for the three and six months ended June 30, 2026 and 2025, the Company took into consideration all year-to-date income and expense items including the change in unrealized investment gains (losses) and realized investment gains (losses) and such items on a forecasted basis for the remainder of each year. The Organisation for Economic Co-Operation and Development (“OECD”) has published global anti-base erosion model rules under Pillar Two (the “GloBE Rules”), which implement a 15% global minimum tax applicable for in-scope multinational groups (“GMT”). Since January 1, 2024, the GloBE Rules have been in effect in the EU and other jurisdictions, including a minimum top-up tax rate of 15% for multinational companies, with many E.U. member states enacting corollary legislation as part of their respective domestic tax laws. Consistent with accounting guidance, the Company will treat the GMT as an in-period tax charge when incurred for which no deferred taxes need to be provided. The Company has recorded top-up tax of $0.7 million for the period ended June 30, 2026, based on its current estimation of 2026 GMT applied to the Company’s facts and financial data. The Company will continue to reassess and re-estimate 2026 GMT. Uncertain tax positions Recognition of the benefit of a given tax position is based upon whether a company determines that it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. In evaluating the more likely than not recognition threshold, the Company must presume that the tax position will be subject to examination by a taxing authority with full knowledge of all relevant information. If the recognition threshold is met, then the tax position is measured at the largest amount of benefit that is more than 50% likely of being realized upon ultimate settlement. The total reserve for unrecognized tax benefits is $0.2 million as of June 30, 2026, which did not materially change compared to December 31, 2025. If the Company determines in the future that its reserves for unrecognized tax benefits on permanent differences and interest and penalties are not needed, the reversal of $0.1 million of such reserves as of June 30, 2026 would be recorded as an income tax benefit and would impact the effective tax rate. The remaining balance is accrued interest and penalties.
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