The stock rose 2.9 percent to 311 pence at 10:45 a.m. in London trading.

"The market has got frustrated and it has lost confidence in the chief executive and that has been reflected in the vote," Chris White, who manages 550 million pounds ($888 million) of U.K. equities including Aviva shares at Premier Asset Management Plc in Guildford, England, said May 4. "It was a reaction to a long period of underperformance relative to the sector."

Regan, 46, who joined Aviva in 2010 from Willis Group Holdings Plc, where he was finance director, is the top internal candidate to replace Moss, according to analysts Eamonn Flanagan at Shore Capital Group Ltd. and Barrie Cornes at Panmure Gordon & Co. Matthews, 60, would also be a "strong candidate," according to Oriel's Barnard.

If McFarlane wants a CEO from outside Aviva, Haste, 50, would be near the top of his list, Cornes said. Barnard said Haste "could not be rule out." Haste tried to buy Aviva's U.K. general insurance operations for 5 billion pounds ($8 billion) in 2010.

Moss, Regan and Matthews weren't available for comment today, Rashmi Wehmeier, an Aviva spokeswoman, said. Haste couldn't be reached for comment.

Aviva Shares Decline

Aviva lost almost 12 billion pounds in market value during Moss's five years in charge, which began in July 2007 and spanned the financial crash of 2008 and Europe's sovereign debt crisis. The firm is the worst performer in the nine-member FTSE ASX Life Insurance Index during that time, falling 59 percent compared with the index's 30 percent drop.

McFarlane, former CEO of Australia & New Zealand Banking Group Ltd., will conduct an "in depth thorough review of all of Aviva's businesses," over the coming weeks, Aviva said. The company will focus on areas "where we can generate superior returns over the cycle and where we are confident of success," it said.

While European rivals Prudential Plc and Axa SA looked to Asia for growth, Moss focused on Europe and the U.K., which both became mired in the sovereign debt crisis.

Moss announced a strategy dubbed "One Aviva Twice the Value" when he began as CEO and the insurer had a market value of about 20 billion pounds. The company, which has 18 million customers in continental Europe, is now valued at less than 9 billion pounds.

By contrast, the market value of Prudential, the U.K.'s biggest insurer and once a takeover target for Aviva, has risen to 18.6 billion pounds from 18 billion pounds.

"The board of Aviva appreciates the contribution he has made both in his role as chief executive officer, and prior to that as group finance director, and wishes him well with the next phase of his career," Aviva said in the statement.

Investors voted down the firm's compensation report last week even though Moss had waived a salary increase of 5 percent to 1 million pounds. It's only the fourth time since 2003 a FTSE 100 company has lost a vote on compensation, according to Manifest Information Services Ltd., a proxy voting agency.

Moss has "tinkered" with the strategy throughout his tenure, confusing investors about what he was trying to achieve, said Kevin Ryan, a London-based analyst at Investec Plc.

U.S. Reversal

As finance director, Moss approved the company's $3.1 billion acquisition of Des Moines, Iowa-based Amerus Group Co. to expand in the U.S. He deemed the U.S. division one of the company's 12 key markets last year.

Yet last month he told investors he may sell the unit to concentrate on fewer countries, according to two people with knowledge of the talks. A sale will cause the company to post a 1 billion-pound loss, the Sunday Times said April 22.

In 2009, he pushed a plan to integrate and expand Aviva's European businesses from a single regional hub in Dublin. Moss said life insurance and pension sales in Europe would be higher than anywhere in the world over the following five years, citing a study by Oliver Wyman Group.

Since then he switched the regional headquarters to London, sales dropped due to the sovereign debt crisis and two Aviva Europe CEOs departed. Last month its heads of Europe, North America, Russia and investment management announced they were stepping down as part of a reorganization of the firm into developed markets and higher growth markets.

"There's a tendency now for shareholders to vote against companies where there's a feeling of consistent disappointment against expectations," said Tim Rees, who helps manage 270 million pounds at Insight Investment Ltd. in London. "This was a response to what was a pretty prolonged and unhappy experience as shareholders."

At Aviva's annual meeting last week, Moss defended his strategy, saying its U.S., Canadian and Spanish units delivered record profits in 2011 while U.K. life insurance doubled earnings over the last six years.

"I care deeply about the Aviva share price and I'm as frustrated about it as anybody in this room," he said. "Yet despite the difficult external environment in Europe we have many things to celebrate and many reasons to be excited about the future."

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