Company Restructuring

9 Months Ended

Sep. 30, 2017

Restructuring and Related Activities [Abstract]

Company Restructuring

Company Restructuring

The Company undertakes various programs to reduce expenses. These programs generally involve a reduction in staffing levels, and in certain cases, office closures. Restructuring and related charges primarily include employee termination and relocation benefits, and post-exit rent expenses in connection with these programs, and non-cash charges resulting from pension benefit payments made to agents and certain legal expenses incurred in connection with the 1999 reorganization of Allstate’s multiple agency programs to a single exclusive agency program. The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges, and totaled $14 million and $5 million during the three months ended September 30, 2017 and 2016, respectively, and $77 million and $21 million during the nine months ended September 30, 2017 and 2016, respectively. Restructuring expenses in 2017 primarily related to Allstate brand claims process changes and office closures due to increased efficiencies and improvements in digital technology, a voluntary termination program extended to certain employees, outsourcing of certain functions, and realigning or consolidating departments within the Allstate, Esurance and Encompass operations.

The following table presents changes in the restructuring liability during the nine months ended September 30, 2017.

($ in millions)	Employee costs			Exit costs			Total liability
Balance as of December 31, 2016	$	—		$	2		$	2
Expense incurred	46			18			64
Adjustments to liability	(4		)	—			(4		)
Payments applied against liability	(24		)	(7		)	(31		)
Balance as of September 30, 2017	$	18		$	13		$	31

The payments applied against the liability for employee costs primarily reflect severance costs, and the payments for exit costs generally consist of post-exit rent expenses and contract termination penalties. As of September 30, 2017, the cumulative amount incurred to date for active programs totaled $101 million for employee costs and $80 million for exit costs.