Aviva posts £3.1-bn loss on write-downs; cuts dividend

UK's second-largest insurer Aviva Plc has slashed dividend and scrapped bonuses for executive directors as the company reported a net loss of £3.1 billion ($4.6 billion) for 2012, primarily on account of a £3.3-billion write-down related to disposal of its US business.

The insurer's operating profit on underlying basis was £1.8 billion, 4 per cent down from £1.9 billion a year ago, which was broadly in line with expectations. The company's 2011 net profit was £60 million.

The largest driver of overall loss came from the agreed sale of Aviva's US business to Athene Holding, where the insurer took impairment charges of £3.3 billion.

The company also cut the total dividend by 27 per cent to 19 pence from 27 pence the previous year.

Further to the news, shares in Aviva slumped 12.5 per cent yesterday in London to close at 314.80 pence a share, wiping off around £1.3 billion of its market value.

Aviva's chief executive Mark Wilson said, "2012 was a year of transition at Aviva. There has been solid progress against the turnaround plan set out last year.''