Igal Mayer, the head of insurer Aviva's flagship European business, has lost his job in a management shake-up intended to streamline the company and boost profit.

Mayer, who runs the continental European units that generated nearly 40 percent of Aviva's operating profit last year, will leave at the end of May, the insurer said on Thursday.

That is bearish. Igal is a loss, said Investec analyst Kevin Ryan. My sense is that he has always been viewed as a very safe pair of hands who was very good at operational things.

Canadian-born Mayer, 50, joined Aviva in 1989 and became European chief executive in January 2011 after stints running the group's general insurance business and its operations in the United States.

Alain Dromer, the head of Aviva's fund management arm, and Richard Hoskins, who runs its North American division, are also leaving, Britain's second-biggest insurer said.

The departures form part of an overhaul which will replace Aviva's four-part regional management structure with a new dual structure based around developed and higher-growth markets.

Analysts said the change should save some of the 102 million pounds ($163.51 million) the company racked up in regional management costs last year. Further details on cost savings will be disclosed at an investor presentation on May 24, Aviva said.

On balance we see the reorganisation as sensible, leading to a sharper focus on efficiency and cash flow in the group's developed markets, analysts at Deutsche Bank wrote in a note.

Aviva's new developed markets division, comprising Britain, mainland Europe, the U.S. and Canada, will be run by Trevor Matthews, currently head of Aviva's British operations.

Asia boss Simon Machell takes charge of the higher-growth markets unit, made up of Turkey, Russia, Poland and Asia.

The new structure tallies with an 18-month old retrenchment strategy which has reduced the number of countries the insurer operates in from 30 to 21.

The changes I am announcing today will result in a simpler and more efficient organisation ... accelerate delivery of our strategy, and provide opportunities for profitable growth, Aviva Chief Executive Andrew Moss said in a statement.

Aviva shares were 1.5 percent lower at 1135 GMT, lagging a 0.3 percent rise in Britain's FTSE 100 share index <.FTSE>.

The stock has fallen 30 percent in the past year, compared with a 3.8 percent drop for the FTSE, reflecting investor concerns over the company's exposure to troubled eurozone economies.

Dromer, who runs Aviva's Aviva Investors fund management arm, will be replaced, and his successor will report to finance chief Pat Regan, the company said.

($1 = 0.6238 pound)

(Reporting by Myles Neligan; Editing by Erica Billingham and Elaine Hardcastle)