Income Tax (Expense) Benefit Year ended December 31, 2021 2020 2019 (in thousands) Income tax (expense) benefit $ 10,668 $ (2,862) $ (17,215) We are sub>ect to income taxes in certain >urisdictions in which we operate however, since the ma>ority of our income is currently earned in ermuda, which does not have a corporate income tax, the tax impact to our operations has historically been minimal. In 2021, we recognized an income tax benefit of $10.7 million, compared to an income tax expense of $2.9 million in 2020. The income tax benefit in 2021 was principally driven by unrealized investment portfolio losses in our taxable >urisdictions, while the income tax expense in the prior comparative period was principally driven by unrealized investment gains in our U.S. based operations. In 2020, we recognized an income tax expense of $2.9 million, compared to $17.2 million in 2019. The reduction in income tax expense was principally driven by lower underwriting performance, partially offset by higher investment gains, primarily in our U.S.-based operations. At December 31, 2021, our net deferred tax asset (after valuation allowance) totaled $60.9 million. )ur operations in Ireland, the U.%., Singapore, Switzerland and the U.S. operations of T'R have historically produced !AAP taxable losses and we currently do not believe it is more likely than not that we will be able to recover the predominant amount of our net deferred tax assets in these >urisdictions. )ur valuation allowance totaled $131.5 million and $88.7 million at December 31, 2021 and 2020, respectively. )ur effective income tax rate, which we calculate as income tax (expense) benefit divided by income or loss before taxes, may fluctuate significantly from period to period depending on the geographic distribution of pre-tax income or loss in any given period between different >urisdictions with comparatively higher tax rates and those with comparatively lower tax rates. The geographic distribution of pre-tax income or loss can vary significantly between periods due to, but not limited to, the following factors: the business mix of net premiums written and earned the size and nature of net claims and claim expenses incurred the amount and geographic location of operating expenses, net investment income, net realized and unrealized gains (losses) on investments outstanding debt and related interest expense and the amount of specific ad>ustments to determine the income tax basis in each of our operating >urisdictions. In addition, a significant portion of our gross and net premiums are currently written and earned in ermuda, which does not have a corporate income tax, including the ma>ority of our catastrophe business, which can result in significant volatility to our pre-tax income or loss in any given period. We expect our consolidated effective tax rate to increase in the future, as our global operations outside of ermuda expand. In addition, it is possible we could be adversely affected by changes in tax laws, regulation, or enforcement, any of which could increase our effective tax rate more rapidly or steeply than we currently anticipate. !enerally, the preponderance of our revenue and pre-tax income or loss is generated by our domestic (i.e., ermuda) operations, in the form of underwriting income or loss and net investment income or loss, rather than our foreign operations. "owever, the geographic distribution of pre-tax income or loss can vary significantly between periods for a variety of reasons, including the business mix of net premiums written and earned, the size and nature of net claims and claim expenses incurred, the amount and geographic location of operating expenses, net investment income and net realized and unrealized gains (losses) on investments and the amount of specific ad>ustments to determine the income tax basis in each of our operating >urisdictions. Pre-tax income for our domestic operations was higher compared to our foreign operations for the years ended December 31, 2021, 2020 and 2019 primarily as a result of the more volatile catastrophe business underwritten in our ermuda operations during these periods incurring a comparatively lower level of catastrophe losses and thus generating higher levels of net underwriting income than our foreign operations, which underwrite primarily less volatile business with higher attritional net claims and claim expenses and as a result produce lower levels of net underwriting income in benign loss years. 89