Remaining program charges

Notes to Condensed Consolidated Financial Statements  
Reinsurance and indemnification recoverables

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Reinsurance and indemnification recoverables, net |  |  |  |  |
| ($ in millions) |  | September 30, 2022 |  | December 31, 2021 |
| Property and casualty |  |  |  |  |
| Paid and due from reinsurers and indemnitors |  | $ | 264  |  |  | $ | 391  |  |
| Unpaid losses estimated (including IBNR)  |  | 9,556  |  |  | 9,479  |  |
| Total property and casualty |  | $ | 9,820  |  |  | $ | 9,870  |  |
|  |  |  |  |  |
| Accident and health insurance |  | 141  |  |  | 154  |  |
| Total |  | $ | 9,961  |  |  | $ | 10,024  |  |



|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Rollforward of credit loss allowance for reinsurance recoverables |
| ($ in millions) |  | Three months ended September 30, |  | Nine months ended September 30, |
|  | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Property and casualty (1) (2) |  |  |  |  |  |  |  |  |
| Beginning balance |  | $ | (66) |  |  | $ | (60) |  |  | $ | (66) |  |  | $ | (59) |  |
| Increase in the provision for credit losses |  | (5) |  |  | (6) |  |  | (5) |  |  | (7) |  |
| Write-offs |  | 9  |  |  | —  |  |  | 9  |  |  | —  |  |
| Ending balance |  | $ | (62) |  |  | $ | (66) |  |  | $ | (62) |  |  | $ | (66) |  |
|  |  |  |  |  |  |  |  |  |
| Accident and health insurance |  |  |  |  |  |  |  |  |
| Beginning balance |  | $ | (8) |  |  | $ | (1) |  |  | $ | (8) |  |  | $ | (1) |  |
|  |  |  |  |  |  |  |  |  |
| Increase in the provision for credit losses |  | —  |  |  | —  |  |  | —  |  |  | —  |  |
| Write-offs |  | —  |  |  | —  |  |  | —  |  |  | —  |  |
| Ending balance |  | $ | (8) |  |  | $ | (1) |  |  | $ | (8) |  |  | $ | (1) |  |

(1)Primarily related to Run-off Property-Liability reinsurance ceded. (2)Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation.

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| 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 and real estate costs primarily related to accelerated amortization of right-of-use assets and related leasehold improvements at facilities to be vacatedThe expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges and totaled $14 million and $23 million during the three months ended September 30, 2022 and 2021, respectively, and $27 million and $145 million during the nine months ended September 30, 2022 and 2021, respectively.Restructuring expenses during the third quarter and first nine months of 2022 are primarily due to thefuture work environment and employee costs. The Company continues to identify ways to improve operating efficiency and reduce cost which may result in additional restructuring charges in the future. 

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| Future work environment |
| ($ in millions) |  |  |
| Expected program charges  |  | $ | 110  |  |
| 2021 expenses |  | (131) |  |
| 2022 expenses |  | (13) |  |
| Change in estimated program costs |  | 44  |  |
| Remaining program charges |  | $ | 10  |  |

These charges are primarily recorded in the Allstate Protection segment. Exit costs of this program reflect real estate costs primarily related to accelerated amortization of right-of-use assets and related leasehold improvements at facilities to be vacated. The Company expects that the majority of these actions will be completed in 2022.Third Quarter 2022 Form 10-Q  37
