The life and pensions firm dropped 13%, wiping around £1.5 billion off its value, after chief executive Mark Wilson announced a 44% cut in its full-year dividend to 9p a share.
However, figures showing a fall in claims for unemployment benefits in America helped the wider FTSE maintain its recent ascent to close 11.5 points higher at 6439.2.
The jobs figures ensured another positive session on Wall Street, where the Dow Jones Industrial Average made further advances, up nearly 50 points in early trading after closing at a new record high last night.
The pound recovered having earlier slipped below $1.50 amid fears the Bank of England would push the button on more quantitative easing.
In what is likely to have been a close decision, the Monetary Policy Committee opted to leave the QE programme at £375 billion and interest rates at 0.5%, prompting a modest recovery in the pound above $1.50, although it remained 0.8% lower at 1.15 euros.
In the FTSE, the focus was on the insurance sector after Aviva's dividend cut and £3 billion loss following the sale of its assets in North America.
Aviva's shares were down 45p to 314.8p.
In contrast, Standard Life confirmed plans to return £302 million to shareholders through a special dividend of 12.8p a share, on top of a 6.5% rise in its final dividend. The award came after strong trading in the UK helped it to better than expected profits for 2012, although shares were still 1.2p lower at 373p.
Temporary power firm Aggreko was the biggest riser in the FTSE-100 Index, up 10% or 181p to 1939p, after its 2012 profits rose 11% to £367 million.
The Glasgow-based group also delivered a 15% rise in its final dividend to 23.9p and said it had made a good start to the new financial year.
Outside the top flight, National Express fell sharply after New York-based hedge fund Elliott sold more than £100 million worth of shares in the coach and bus operator. The company's stock fell 25.5p to 204.5p in the FTSE-250 Index.
The biggest FTSE-100 risers were Aggreko ahead 181p at 1939p, IMI up 57p to 1319p, Meggitt 14p higher at 490.1p and Schroders up 50p to 2086p.
The biggest fallers were Aviva down 45p to 314.8p, BSkyB off 22p to 866.5p, Polymetal International down 24p to 951.5p and Lloyds Banking Group 1.2p lower at 49.9p.
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