Gallagher has announced the acquisition of Adelaide-based Donnellys Insurance Brokers, as it continues to expand its SME capability.

Donnellys was founded in 1976 by well-known broker Mike Donnelly, offering domestic and commercial insurance and specialising in personal lines products distributed through affinity groups.

Mr Donnelly is a former National Insurance Brokers Association director and Insurance Brokers Network Australia founding member, former chairman and director.

The business has seven staff working from its Adelaide CBD office, including Executive Director Mr Donnelly and his son Account Executive Chris Donnelly.

The Donnellys name will be phased out, with the business now known as Gallagher’s Adelaide branch.

Mike Donnelly told insuranceNEWS.com.au that he has been looking for a suitable buyer for two years.

He says the threat of increasing regulation and competition from direct players makes it hard for small independent brokers to grow.

“[Gallagher's] values are the same as ours,” he said.

“Gallagher is a family business, and it was the right time to make the move. This guarantees a better proposition for clients and more security for staff.”

Gallagher CEO Sarah Lyons says Donnellys is “a great fit”.

“As Australia’s small to medium sized business owners continue to look for ease and convenience when purchasing their insurance, our value proposition is built around creating choice and flexibility where they need it most,” she said.

“As a family originated business Mike, Chris and the team have built a solid reputation over the years for professional and friendly client service and will continue on this vein as they transition into the Gallagher team.

“Small businesses have a unique set of needs and this is a space ripe for innovation, and connection with associations and other affinity groups aligns well with our core business model.”