Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Summary judgment: Allstate is an average business having its best year in decades. The recent numbers are genuinely spectacular — an 86.6 combined ratio, a 44% adjusted return on equity over the trailing twelve months, $6.2 billion of operating cash flow in six months. But we have watched insurance cycles for seventy years between us, and we know exactly what this is: peak-cycle earnings in a commodity business, flattered by reserve releases and quiet weather, capitalized by the market at close to the highest price-to-book multiple in the company's modern history. The product is a commodity, the customer shops on price, the durable cost advantage in this industry belongs to Allstate's fastest-growing competitor, and the earnings you see today are not the earnings you will collect over the next decade.
Recent filings analysed: 10-Q (2026-08-05), 8-K (2026-08-05), 8-K (2026-07-14), 8-K (2026-06-18).
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