Shares in Aviva have dropped by 16% today following its announcement that it will cut its dividend by more than a quarter.

Aviva made an annual loss of £3 billion, which it attributed to writedowns related to the sale of its US business last year, responsible for about £1.7 billion of the loss.

Shares fell by 56p to 303p after the markets opened. The news is particularly unfortunate for Aviva, following directly from the news of competitor Legal & General’s rising growth and profits, although rival RSA has also had to cut its payout by a third this year.

Many expected Aviva to maintain its dividend, but new Chief Executive of the firm Mark Wilson said this would not have been prudent as cashflow and debt reduction are the company’s two biggest priorities.

Aviva’s previous Chief Executive, Andrew Moss, resigned last year after a rebellion over pay and performance.