Allstate: Reports That Activist Trian Has Built a Stake

There have been media reports that activist hedge fund Trian Fund Management has built a stake in no-moat Allstate. We think Allstate’s recent run of poor results stems from unusually high catastrophe losses and negative industry trends within personal auto, and we don’t attribute recent losses to poor management. However, we have long had concerns that Allstate’s management was prioritizing growth over profitability, and its attempts to expand beyond its core captive agent channel have met with little success, in our view.