IAG shares fell as much as 8.3 percent Wednesday as analysts said the insurer's board must now convince investors it was right to reject the offer.
"QBE will now continue to focus on the pipeline of acquisitions that have been accumulating in recent months," said QBE Chief Executive Officer Frank O'Halloran in a statement. QBE is considering a range of opportunities in the Americas, Europe, Asia and Australia, he said.
The IAG board released a statement late Tuesday saying it would not recommend that shareholders accept QBE's latest offer, which it termed "inadequate."
The offer was QBE's third in five weeks. IAG Chairman James Strong had said Monday that the offer falls well short of fair value.