Aviva £2.3bn in the red after huge loses in sale of US arm

Aviva will fall deeply into the red this week when it writes off around £2bn from the value of its former US business.

This is expected to force the FTSE 100 insurer to post a loss of more than £2.3bn when it reports its full-year numbers on Thursday, the first results under new chief executive Mark Wilson.

The US unit was bought by Athene Holding for £1.1bn last year, significantly less than Aviva paid for it back in 2006.

Mr Wilson is under growing pressure to cut the group's dividend, which analysts have warned is too high. Brokers at Barclays Capital predict it will be cut by up to 15 per cent. "We believe one of the biggest challenges facing the new chief executive is setting a sustainable dividend level," the investment bank said in a note.

Any cut is likely to be highly controversial given what happened to rival RSA Insurance last month. Shares in the company – best known for its More Than brand – tumbled after slashing its dividend by 33 per cent.

Chief executive Simon Lee said the cut was necessary because low bond yields threatened RSA's ability to invest." It is absolutely the right thing to do for the business," he said at the time.

"The board's decision to rebase the dividend is a prudent move that will enable us to invest in the opportunities we see for growth."

Sources close to Aviva say a decision on the dividend is likely to take place over the next few days. Chairman John McFarlane had previously promised to do all he could to avoid this, raising the prospect of shareholder unease.

Aviva declined to comment.

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