Insurance Australia Group has rejected an A$7.4 billion offer made by its rival QBE Insurance Group, for being inadequate.

QBE has made an offer of 0.142 QBE share and A$0.70 cash for each share of Insurance Australia Group (IAG). QBE has valued IAG at A$3.99 a share.

IAG has, however, said that the board has considered the offer but rejected it particularly because of the inadequate price.