Saying "are you sure" doesn't cut it.
Any pop up would HAVE to include the name of the person you want to give it to. Otherwise it's pointless, since you may not even realise you missclicked. You may think, yes, im sure I want to allocate the loot to someone else, and go ahead with it, only to find you clicked on the wrong person.
Another way is just add a timer to re-allocated loot. i.e. if it's not looted within 2 minutes, then it goes back to the person it originally dropped for.
Or, when you re-allocate, instead of replacing your name it just adds another. So both you and someone else can loot the item.
So we have:
a) pop up confirmation with name included
b) timer to pop the item back to original looter
c) keep the original looters ability to loot the item