The QBE Insurance Group has announced that its proposal to merge with Insurance Australia Group through a scheme of arrangement, which was rejected by the IAG board, has now been extended to May 5, 2008.

QBE Insurance has extended its proposal as it believes the proposal represents an opportunity to create a complementary global insurance business, which for Insurance Australia Group (IAG) shareholders would provide benefits from QBE’s excess risk margin diversification benefits of over $400 million that are expected to be realized from a merger of the two businesses.

The transaction also provides IAG with access to QBE’s strong international platform for future profitable growth and diversification.

Frank O’Halloran, CEO of QBE, said: When contrasted with a pure standalone option for IAG, our proposal allows IAG’s shareholders to participate in immediate and sustainable wealth creation through QBE’s global and product spread.