Aviva suffered a loss of £3bn in 2012 due to a £3.3bn writedown from the sale of its US business last year.
The group also slashed its final dividend by 44% from 16p to 9p per share and from 26p to 19p for the full year, a cut of 27%.
Mark Wilson, group chief executive officer, said: "2012 was a year of transition at Aviva.
"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."
Meanwhile, operating profit was down slightly on the 2011 figure of £1.86bn to £1.78bn, partly due to the adverse foreign exchange impact of £65m.
Aviva Investors, the fund management arm of the business, contributed £42m in operating profit, excluding the contribution from the US based business, a slight fall from £53m.
Pat Regan, chief financial officer, attributed this partly to lower performance fees.
Total profit before tax from fund management was £106m, slightly down from the previous year's figure of £110m.
Investment sales from Aviva Investors, however, were up year on year from £1.6bn to £2.7bn, contributing to the total investment sales of £4.6bn, which marks a 32% increase from 2011.
The group said most of the growth came from the opening of distribution offices in Europe, as well as an increase in higher yield bond sales reflecting new mandates in Taiwan.
Wilson said: "Investment performance was ahead of target on both benchmark and peer group measures. Net sales fell year-on-year as a result of the refocus of our product offering."
