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UPDATE 1-Canada ice storm hits Intact Financial profit

* Fourth-quarter operating profit C$1.05 per share vs est C$1.26

* Direct premiums written rise 1 pct to C$1.7 bln

* Underwriting profit halves to C$67 mln

Feb 5 (Reuters) - Intact Financial Corp, Canada's largest property and casualty insurer, reported a 40 percent drop in fourth-quarter profit, hurt by severe winter weather.

A major ice storm blanketed central and Atlantic Canada during the Christmas season, causing widespread damage, power failures and disruptions to travel and business.

Toronto-based Intact said net income fell to C$107 million ($97 million), or 77 Canadian cents per share, in the quarter ended Dec. 31, from C$177 million, or C$1.29 per share, a year earlier.

On an operating basis, Intact earned C$1.05 per share, exceeding the average analyst estimate of C$1.26 per share, according to Thomson Reuters I/B/E/S.

Direct premiums written rose 1 percent to C$1.7 billion.

Underwriting profit halved to C$67 million as winter storms in Canada resulted in catastrophe losses of C$55 million.

Intact's combined ratio was 96.3 percent, compared with 92.1 percent a year earlier. A ratio below 100 percent means the company is taking in more from premiums than it is paying out in claims and expenses.

The company raised its dividend by 9 percent to 48 Canadian cents per share.

Intact shares, which touched a life-high of C$69.95 in January, closed at C$67.51 on Tuesday on the Toronto Stock Exchange.

They have risen more than 10 percent in the last six months, outperforming the TSX-Toronto Stock Exchange 300 Composite Index's 7 percent rise in the same period.