As regular as Christmas killer toys and the ATO promising to fight the hard corporate cases, the IAG takeover rumour is getting another run, taking the share price along for the ride. Who knows, one day it might even be correct – and maybe the ATO won’t back down on cases involving Rob Gerrard’s interests.

I’m losing count of the number of times the IAG story has been used to ramp the market but it’s going round again with the share price up 6%. (It’s off 16 cents this morning, but that’s just reflecting the stock going ex a dividend of that amount.)

At least this time the speculation has been widened to the insurance sector in general. For mine, Suncorp makes a more reasonable target anyway.

For a start, Suncorp’s uneasy combination of banking and insurance remains ripe for splitting up, meaning the list of possible predators includes banks as well as insurance companies. Whoever wants to lead the raid, there’s the comfort of knowing there are willing buyers for the other half of the business.

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Secondly, it’s primarily a Queensland business – and that’s where the growth is. You have to look no further than this week’s housing figures, the government’s $5,000 relocation payment scheme or today’s Fairfax result for examples of how Australia’s two-speed economy is evolving.

If you’re going to pay a fat takeover premium, you would want to do it for a business that has the best growth potential – and that means the one that’s situated in a growth market. IAG is NSW’s biggest insurer… but so what?

Like the boy who cried wolf, one day the insurance industry will find a wolf among its flock, but all the false alarms make it harder to get excited every time the call goes up.

Disclosure: I have some IAG shares kicking around that David Tweed hasn’t talked me out of.