Above diagram can be written in terms of series:
$$i\Delta = -\frac{i}{p^2 + m^2} + \Big(-\frac{i}{p^2 + m^2}\Big)(i\Pi)\Big(-\frac{i}{p^2 + m^2}\Big)+ \Big(-\frac{i}{p^2 + m^2}\Big)(i\Pi)\Big(-\frac{i}{p^2 + m^2}\Big)(i\Pi)\Big(-\frac{i}{p^2 + m^2}\Big) + \cdot \cdot \cdot = - \frac{i}{p^2 + m^2 - \Pi}.$$
So to get the exact propagator, I should sum over all the 1PI diagrams. 1PI diagrams are those from which I can't get two diagrams by cutting a line. But then $3$rd diagram and those arising from the higher order terms are really 1PI diagrams? (since I can cut the $3$rd diagram and obtain two diagrams)