Aviva has slashed its final dividend by nearly a half and frozen executive pay amid poor earnings and a turnaround programme at Britain's second-biggest insurance group.

Operating profit for the full year fell 4.3 percent to £1.776bn, the company said in a statement published Thursday on its website. A total loss for the year was pegged at £3.05bn, the company said, owing to a £3.3bn writedown on the sale of its US operations to Apollo Group Management. The final dividend was cut by 44 percent, the company said, to 19 pence per share while the full year dividend was pared to 19 pence per share from 26 pence, freeing up cash to reduce overall group leverage.

Shares in the group plunged more than 15 percent in the opening minutes of London trading to change hands at 305.3 pence each, the lowest level since July of last year.

"The rebasing of the dividend and the elimination of the dilutive scrip is about giving certainty to shareholders, reducing debt, and putting Aviva in a sound position for the future. This is the right course of action," said Mark Wilson in the statement, his first as CEO of the group since taking over from Andrew Moss. ""Aviva has many strengths to build on. We have a number of market leading businesses capable of delivering progressive cashflows and other businesses that offer genuine growth potential. My intention is that Aviva will be a simpler business with a robust balance sheet that delivers sustainable cashflows and growth."

"I regret this has become necessary, but can assure shareholders we took this decision only after examining scrupulously all alternatives," said chairman John McFarlane of the dividend. "The need to ensure that the current and future dividend is sustainable and covered by operating cash generation is fundamental. The broad transformation of the group in the midst of continuing economic uncertainty also requires that we maintain and grow the level and flexibility of capital and liquid resources."

Aviva said its directors will get no bonuses for 2012 or any further pay rises for 2013. Former CEO Andrew Moss was ousted last year after shareholders expressed anger over his pay increases despite a 59 percent decline in the company's share price during his five year tenure.