Australia's QBE Insurance lifts bid for IAG

SYDNEY, May 19 (Reuters) - QBE Insurance Group Ltd (QBE.AX), Australia's top insurer by premium income, said on Monday it had raised its bid for smaller rival Insurance Australia Group Ltd (IAG.AX) (IAG) to A$8.7 billion ($8.3 billion).

QBE is now offering 0.145 of its shares and A$0.90 in cash for each IAG share, up from 0.142 of its own shares and A$0.70 in cash. QBE said in a statement it expected IAG to say the final proposal was well short of IAG's expectations.

IAG had rejected an earlier A$8.1 billion stock and cash bid from QBE in mid April, saying the offer was totally inadequate. But on April 28, IAG cut its outlook for growth in premiums for the second time this year. ($1=A$1.05) (Reporting by Miranda Maxwell)