QBE Insurance Group has approached Insurance Australia Group with an increased final proposal of 0.14 QBE shares and $0.90 cash for each IAG share.

The final scheme proposal represents a premium of 24% to Insurance Australia Group’s (IAG) one-month and three-month volume-weighted average price prior to QBE’s proposal on April 10, 2008.

Frank O’Halloran, CEO of QBE, said: QBE considers its final proposal as very fair and reasonable given IAG’s declining profitability in the past three years and the recent profit downgrade. The recent rise in QBE’s share price means that our final proposal still meets QBE’s acquisition criteria including earnings per share accretive in year one.

John Cloney, chairman of QBE, added: I have had further discussions with the chairman of IAG over the weekend. He has indicated that he believes our final proposal is well short of their expectations. We are waiting on a formal notification from IAG on our final proposal following their board meeting.