NEW YORK (Reuters) - Martin Sullivan, chief executive officer of insurer American International Group (AIG.N: Quote, Profile, Research), has stepped down after three years on the job, according to a person familiar with the matter.

Robert Willumstad, chairman of the world's largest insurer, will take the position of CEO effective immediately, and retain the chairman title, according to the person familiar with the matter, who asked not to be identified by name.

In stepping down, Sullivan becomes the latest in a string of Wall Street chiefs who have left their jobs amid large losses from risky mortgage bets.

In recent weeks, several large shareholders have been pushing for Sullivan's ouster after AIG posted back-to-back quarters of record losses, stemming from about $20 billion (10.2 billion pounds) in write-downs in the market value of assets linked to subprime mortgages.

Willumstad, 62, joined AIG's board two years ago, a year after leaving Citigroup Inc where he had been chief operating officer. When he left Citi, he expressed a desire to lead a public company.

Stephen Bollenbach, who was named to AIG's board earlier this year, will become lead director, according to a report in The Wall Street Journal. Bollenbach is favoured by some of AIG's most critical shareholders, including billionaire Eli Broad.

Broad, a former director who founded SunAmerica, a life insurer that AIG bought several years ago, and fund managers Shelby Davis of Davis Selected Advisers LP and Bill Miller of Legg Mason (LM.N: Quote, Profile, Research) wrote in a letter obtained by Reuters last week that "significant and immediate changes at both the management and board level are clearly called for."

The same group sent another letter to the board last month, also expressing concern over Sullivan's management.

Separately, former Chief Executive Officer Maurice "Hank" Greenberg, who remains a large shareholder, has also been critical of management and AIG's board.