Direct insurer AAMI is moving into the SME market portraying brokers in terms the National Insurance Brokers Association (NIBA) believes are “disgraceful and insulting”.

AAMI Business Insurance has been running radio advertisements in major centres that state: “There’s no middle man, no little broker getting his fat paws on your business”.

“The ads are disgraceful and insulting to the vital work that insurance brokers do,” NIBA CEO Noel Pettersen told Sunrise Exchange News yesterday. He says he has written to AAMI CEO Robert Belleville demanding the immediate removal of the ads.

“There’s been a long-standing convention between the intermediary and underwriting sectors that we don’t seek to gain market advantage by portraying each other in negative ways,” he said. “Obviously these people haven’t thought this through too well.”

But AAMI Business Insurance National Manager Ian Badger told Sunrise Exchange News he doesn’t think the radio ad is provocative, despite the “fat paws” comment. “That’s how it was intended to be when it was recorded,” he said.

The advertisements also say that AAMI customers “won’t pay commissions”. While the insurer pays the commission, Mr Badger doesn’t see any problem with the inaccuracy. “They [commissions] are included in the price consumers pay,” he said.

Asked whether AAMI sees any conflict with the strong broker focus of sister company Vero and new owner Suncorp, he said: “There’s no conflict for AAMI. It communicates its media messages. I can see why they get a little upset about it, but consumers are increasingly going towards direct.”

Mr Pettersen says NIBA and its members are more than a “little upset” by the AAMI ad. “If you’re honest in your advertising, you don’t have to invent misleading and insulting stereotypes,” he said.  

“If we decide to show the public how misleading this advertisement is, it will reflect on the credibility of all insurers, not just AAMI. You just have to hope [AAMI marketing staff] realise how destructive this approach is to the entire industry and withdraw the ad.”