Activist hedge fund Trian Fund Management has acquired a stake in US insurance company Allstate, reported Reuters, citing undisclosed sources.
Illinois-based Allstate has been reeling under losses.
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It has attributed its subpar performance to natural disasters, which are occasionally made worse by climate change.
Trian’s investment could put pressure on Allstate CEO Tom Wilson to improve the insurer’s performance.
Allstate has hired investment bankers to assist it in how to deal with Trian, according to the sources.
No information was available regarding the size of Trian’s investment and its plans for Allstate.
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By GlobalDataRequests for comment from Allstate and Trian were not immediately answered, the publication said.
Allstate’s exposure to losses associated with property and auto insurance has affected its stock price, which has fallen 9% year-to-date before news of Trian’s involvement surfaced.
Like many of its peers, Allstate has not increased its premiums quickly enough to offset the losses it suffers from paying out on significant natural catastrophes such as wildfires.
Inflation has also made it more difficult for the insurer to fund replacement expenses.
Two years ago, activist investor Carl Icahn acquired a stake in Allstate, but he did not actively advocate for board seats or other significant changes.
Activist investors buy a minority stake in companies to change how they are run.
This month, Trian relaunched its campaign against Walt Disney, which had been put on hold earlier in the year after CEO Bob Iger’s return.
Previously, Trian has advocated for reform at organisations such as Procter & Gamble, Unilever and Invesco.
