UPDATE 2-Allstate says settled 95 pct Sandy claims; expects rate hikes
* Says it had 170,00 Sandy claims
* Announces new $1 bln share buyback
* Raises dividend to $0.25 from $0.22
* Shares up 3 pct
* 4th-quarter EPS $0.81 vs $1.40 last year
By Aman Shah
Feb 6 (Reuters) - Allstate Corp's quarterly profit fell 45 percent on losses from superstorm Sandy, but the home and auto insurer said it has paid out about 95 percent of Sandy claims and is seeing rate increases across businesses.
The largest publicly traded home and auto insurer in the United States raised its quarterly dividend to 25 cents per share from 22 cents and announced a $1 billion share buyback program.
"In auto insurance, we expect to see relatively modest price increases, which are at or below the rate of inflation, across the industry," Chief Executive Thomas Wilson told Reuters.
Wilson was more optimistic about the home insurance business, where he expects prices to continue to rise throughout the industry.
"Catastrophe losses are much higher in the last five years than they have been at almost any period in history and so those costs need to be passed on to customers."
The company recorded catastrophe losses of $1.06 billion for the fourth quarter, up from just $66 million in the year-ago period. Losses from Sandy were $1.12 billion.
The company had to correct prior-period catastrophes it overestimated and the benefit of that went into the current quarter, Wilson said to explain why the total catastrophe losses were below the Sandy losses.
Wilson said Allstate had 170,00 claims from Sandy and about 98 percent of them have been closed.
Sandy, which struck the northeast United States on Oct. 29, is expected to be the second-costliest catastrophe in the country's history, with insured loss estimates as high as $25 billion. The costliest catastrophe was Hurricane Katrina in 2005.
For a factbox on initial Sandy-related loss estimates reported by insurers so far, click
Allstate's net income fell to $394 million, or 81 cents per share, in the quarter ended Dec. 31 from $712 million, or $1.40 per share, a year earlier.
On an operating basis, it earned 59 cents per share.
Analysts on average had expected Allstate, considered one of the most exposed companies to insured losses from Sandy, to post a loss of 5 cents per share, according to Thomson Reuters I/B/E/S.
Underlying combined ratio, the percentage of premium revenue an insurer has to pay out in claims, was down 4 percentage points for the quarter to 86.7 percent.
"Looks like it was core underwriting performance more than anything else ... core loss ratio came in well below what we expected," Stifel Nicolaus analyst Meyer Shields said.
The new $1 billion share repurchase program will be implemented in conjunction with another $1 billion program announced in December, which is to be funded with hybrid debt.
Allstate, with a market value of about $21.35 billion, is a Standard & Poor's 500 index component.
The company's shares, which have risen 14 percent in the past three months, were up 3 percent in trading after the bell. They closed at $44.31 on the New York Stock Exchange on Wednesday.