Aviva looks to save £400m and exit large-scale bulk annuity arm

'The return on capital is just not worth it for us,’ he said. ‘We would have to employ so much capital in a Solvency II environment that we're better redeploying capital elsewhere; either in the UK or another part of the business.'

Barral confirmed that Aviva would stay in the small-scale bulk annuities market.

Aviva also announced several senior management changes including Robin Spencer becoming the company's new chief executive of UK and Ireland general insurance, replacing David McMillan who will take up the director group transformation role.

McFarlane said that the bulk purchase annuity business was the only UK segment that the company was looking to exit.

He would not comment on reports that the company planned to sell its US arm but added that £6 billion of capital, the amount Aviva is targeting through offloading ‘non-core’ divisions,  was a ‘reasonably significant’ amount so the divisions exited would not be made up entirely of lots of small segments.

McFarlane added that he was very happy with Aviva Investors and will now focus on building Aviva Investors External to the same success.

‘Aviva Investors’ performance is strong….we are very happy with it. It is fulfilling its duty to us incredibly well so it gets an enormous tick from me,' he said.

John Lister will replace Spencer as group chief capital and risk officer.

McFarlane said that the search for a new chief executive is in progress with an appointment to be made at the start of 2013.

The announcements follow a difficult year for Aviva as its former chief executive Andrew Moss was forced out after shareholders’ anger over staff pay and share performance of the company. Reports earlier this week suggested that the company would sell 15 divisions, including its US business.