Insurance Australia Group (IAG) warns its investors to prepare for unsolicited, undervalued offers for their shares.

A spokesperson of IAG told media on Tuesday that a trading company, Hassle Free Shares Sales, has contacted and offered shareholders of IAG on its shares at a value which is quite lower than their market price.

IAG explains the Direct Share Purchasing, along with share trader David Tweed, may be expected to bid for IAG shares.

Media reports have stated that Mr. Tweed has conducted unsolicited offers at IAG in the past.

In 2007, the New South Wales authorities advised so-called investors to caution against Hassle Free Share Sales, stating they target inexperienced investors.

Carolyn McCann, head of investor relations of IAG, said the company did not endorse any unsolicited offer.

"We urge shareholders to seek independent financial advice and check the current price of IAG shares," Ms. McCann said in a statement.

IAG confirmed that 16,000 of its shareholders agreed to sell their stocks for less than market value.

IAG operates a number of different insurance brands in Australia, Asia and in the United Kingdom including Swann Insurance, The Buzz Insurance, Mike Henry Travel from New Zealand, and Equity Insurance Group from the UK.