UPDATE 2-Aviva shares drop as strategy update leaves investors underwhelmed

* HK stake sale not disclosed-CEO

* 2019 op profit seen in line with management expectations

* Targets 12% return target by 2022

* Aims to cut 300 mln stg in costs by 2022

* Shares down 3% (Adds CEO comment, background, analyst, shares)

By Carolyn Cohn

LONDON, Nov 20 (Reuters) - Shares in Aviva slid on Wednesday after the British insurer announced it would reorganise into five divisions and sell its stake in its Hong Kong business, falling short of investor expectations for a broader change in strategy.

The life and general insurer has been struggling to find direction, analysts and investors say, after replacing its chief executive earlier this year.

Analysts had speculated Aviva might announce that it would sell smaller European operations such as France or Italy to focus on the UK, or offload books of life insurance closed to new customers.

Its shares hit one-month lows and were down 2.9% at 406 pence at 0813 GMT, one of the worst performers in the FTSE 100 after it outlined its new strategy.

Aviva is folding Aviva Investors, its fund management arm, into a broader investments, savings and retirement division. The other four new divisions are UK life, Europe life, Asia life, and general insurance, it said ahead of an investor day.

"What we are laying out today is a simpler strategy, simpler structure and attractive growth engines," Chief Executive Maurice Tulloch, who took over the top job in March, told Reuters by phone.

Insurers and asset managers have been moving away from large, diverse operations.

Prudential split into two last month, while last year Old Mutual broke up into four parts and Standard Life sold off its insurance business following its merger with Aberdeen Asset Management.

Shore Capital analysts said in a note entitled "Must try harder" that they thought investors would be a "a little underwhelmed" by Aviva's strategy review. Shore reiterated its hold rating on the stock.

Aviva set out several three-year targets, including a 12% return on equity and a 300 million pound ($387 million) net cost saving by 2022.

It said it was committed to its progressive dividend policy and saw 2019 operating profit in line with management expectations, following around 300-400 million pounds in "management actions", which typically include cost cutting.

Aviva said it was in discussions about the future of its businesses in Vietnam and Indonesia, following the sale to joint venture partner Hillhouse Capital of its 40% stake in the Hong Kong business, named Blue. Tulloch declined to disclose the terms of the sale.

Tencent Holdings, China's biggest gaming and social media company, also has a 20% stake in Blue.

Aviva said this week it was keeping its Singapore operation following a review of its Asian businesses, raising speculation it could not get a satisfactory price for it. The insurer also said it was keeping its joint venture in China. ($1 = 0.7744 pounds) (Reporting by Carolyn Cohn, Editing by Lawrence White and Susan Fenton)