Luxembourg has been chosen ahead of Dublin by another insurer that is relocating from the UK as a result of Brexit.

Commercial insurer CNA Hardy has said it will set up a new European subsidiary in Luxembourg to allow it to operate across the European Union after Britain leaves the bloc.

"Luxembourg is the optimum jurisdiction for our European Union base due to its geographic location between three of our Continental European offices, its stable economic and political environment and the professional approach of the Luxembourg regulator," the firm said in a statement.

The process of setting up the subsidiary is already under way, and is expected to complete by early 2019, it said.

The firm said it would hire a local management team in Luxembourg to handle risk, finance and compliance functions.

CNA Hardy is part of CNA Financial Corp, the US-based commercial property and casualty insurance firm.

It follows a decision in March by insurer AIG to move operations from the UK to Luxembourg as a result of Brexit.

Meanwhile, the Financial Times reports that insurer QBE is to set up an EU base in Brussels, dealing a blow to Dublin’s hopes of becoming a new centre for the industry.

The paper says that faced with a loss of passporting rights from London because of Brexit, many UK-based insurers have been looking for a new EU home.

QBE is the second big insurer to select the Belgian capital after Lloyd’s, the insurance market, announced in March it would establish a base there.