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* 2012 payout of 19 pence vs 25.6 pence consensus
* Underlying op. profit down 4.3 pct at 1.77 bln stg
* Shares down 13 percent, top FTSE faller
* Directors to get no bonus, no pay rise
LONDON, March 7 (Reuters) - British insurer Aviva slashed its 2012 dividend by more than a quarter to repay debt,sending its shares tumbling 13 percent, and drawing unflatteringcomparisons with a windfall payout from rival Standard Life.
Aviva shareholders will get 19 pence from 2012 earnings,compared with 26 pence the previous year, and well below the25.6 pence forecast by analysts in a company poll, the insurersaid on Thursday.
""This was a difficult decision, but it was absolutelynecessary to give certainty to our shareholders, to reduce debt,and to put Aviva on a sound footing for the future," Aviva ChiefExecutive Mark Wilson told reporters, adding that he and othertop executives would get no bonuses or pay rises this year.
The dividend cut, Aviva's second in four years, came as thecompany reported a 15 percent drop in operating profit to 2.13 billion pounds, broadly in line with forecasts.
Standard Life said it would pay investors a specialdividend of 302 million pounds, on top of a 6.5 percent increasein the regular payout, after forecast-beating profit growth lastyear contributed to a "very strong" capital position.
Shares in Aviva were down 13 percent by 1050 GMT, thesteepest faller in the FTSE 100 share index.
That wiped 1.3 billion pounds ($1.96 billion) off thecompany's value, relegating it to fourth position from second inthe ranking of British insurers by market capitalisation, behindOld Mutual and Legal & General. Old Mutual andLegal & General both announced divided hikes for 2012.
"Aviva has the worst dividend paying record of all the majorUK life companies, and it will clearly take some considerabletime to persuade investors that the latest management team havegot it right," said Investec analyst Kevin Ryan.
The dividend cut is the latest step in a reorganisationlaunched by Aviva last July after investors irked by apersistently weak share price forced out Wilson's predecessor,Andrew Moss.
Under the plan, the insurer has cut costs and raised about2.4 billion pounds by selling less profitable businesses thattie up too much capital, including its subsidiary in the UnitedStates.
That helped double Aviva's capital surplus to 7.1 billionpounds by the end of 2012, addressing investor concerns that theinsurer did not have strong enough cash reserves given its heavyexposure to the troubled euro zone, Wilson said.
But the disposals also boosted Aviva's debt as a proportionof assets, putting it under pressure to repay what it owes morequickly.
Wilson, formerly head of Asian insurer AIA, saidAviva now aimed to generate more cash from its flagship Britishand Canadian businesses while investing in units with goodgrowth potential, including its Polish, Turkish and Asian arms.
"The insurance sector has made an industry out ofcomplexity," he said.
"We need to be simple, we need to be understandable, we needto be as dependable as a Swiss clock, and that is my promise."
One of the European insurance sector's main attractions forstock market investors is its ability to pay relatively bigdividends, reflecting its predictable revenues as customersrenew their policies annually.
Standard Life announced a 2012 operating profit of 900million pounds, up 65 percent, exceeding the 400 to 600 milliontarget set out in its directors' long-term incentive plan, andentitling them to the maximum payout under the scheme, ChiefExecutive David Nish said.
