Loss-making AIG is searching for a new CEO to replace Peter Hancock, who announced his resignation last week. It has also announced its Brexit strategy, which will see the formation of a subsidiary in Luxembourg.

Mr Hancock has resigned as president of the group, but will continue to run the group as its CEO until a replacement is found, AIG says.

The British insurance executive has struggled to turn around AIG since taking on the job in 2014, with the giant insurer racking up a larger fourth-quarter loss of $US3.04 billion ($4.04 billion) compared to $US1.84 billion ($2.45 billion) in 2015.

The fourth-quarter loss included a massive $US5.6 billion ($7.45 billion) adverse development charge. Net losses for last year were $US849 million ($1.13 billion), compared with a $US2.2 billion ($2.93 billion) net profit in 2015.

AIG has also announced plans to have a subsidiary in Luxembourg ready by the first quarter of 2019 to service the European Union market as the UK implements its Brexit strategy.

The group’s existing London office, which currently supports the overall EU market, will be retained to serve UK clients.

“This is a decisive move that ensures AIG is positioned for whatever form the UK’s exit from the EU ultimately takes,” AIG Europe CEO Anthony Baldwin said.

“AIG sees opportunity in the ongoing resilience of the UK insurance market.

“At the same time, we are ensuring that our clients and partners experience no disruption from the UK’s EU exit.

“Our Luxembourg company will be complementary to our existing structure and will be part of our single European module.”