Company Restructuring

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Company Restructuring

Note 11 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 the following costs related to these programs:

• Employee - severance and relocation benefits

• Exit - contract termination penalties

The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges and totaled $200 million and zero during the three months ended September 30, 2020 and 2019, respectively, and $219 million and $27 million during the nine months ended September 30, 2020 and 2019, respectively.

Restructuring expenses in 2020 are primarily due to a plan to optimize and simplify the Company’s operating model and cost structure as part of the previously announced multi-year Transformative Growth Plan. In connection with the plan, the Company expects to incur restructuring and related charges totaling approximately $290 million, with $198 million recorded in the third quarter of 2020, primarily in the Allstate Protection segment, and the remainder to be recognized in future quarters. The Company expects these actions will be completed in 2021.

Employee costs of this program include severance and employee benefits primarily impacting claims, sales, service and support functions. Exit costs reflect real estate costs primarily related to accelerated amortization of right of use assets and related

leasehold improvements at facilities to be vacated.

Restructuring activity during the period
($ in millions)	Employee costs			Exit costs			Total liability
Restructuring liability as of December 31, 2019	$	14		$	8		$	22
Expense incurred	196			22			218
Adjustments to liability	5			(4		)	1
Payments and non-cash charges	(38		)	(24		)	(62		)
Restructuring liability as of September 30, 2020	$	177		$	2		$	179

As of September 30, 2020, the cumulative amount incurred to date for active programs related to employee severance, relocation benefits and exit expenses totaled $255 million for employee costs and $30 million for exit costs.