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Lloyd's of London Chairman Sir David Rowland is one of the great statesmen of the insurance business.

As one of the best communicators in the industry, he led Lloyd's from the brink of disaster to one of the biggest financial reconstructions ever. Had he failed in his mission, Lloyd's could have collapsed, leaving the vast majority of the insurance industry worldwide in chaos.

When Sir David became Lloyd's first full-time chairman in 1993, the market was wracked by catastrophic losses and thousands of angry, litigating names who refused to pay claims.

More than three years, several court decisions and a lot of tears later, Sir David had cajoled regulators and convinced the vast majority of Lloyd's membership to sign last year's Reconstruction & Renewal Plan. The R&R plan reinsures about 740 pre-1993 syndicate years into run-off reinsurer Equitas Ltd. and leaves the current Lloyd's market with almost a clean slate to continue underwriting.

Along the way to R&R, there were some serious bumps. Court decisions went in members' favor; Lloyd's Chief Executive Peter Middleton resigned; the first settlement offer was vetoed; and a U.S. court decision would have killed the deal on the eve of signing the second R&R proposal if it had not been overturned.

Mr. Rowland landed at the top of Lloyd's after an exemplary career in the insurance industry.

After receiving a master of arts degree in natural sciences at Trinity College, Cambridge University, Sir David started his Lloyd's career in 1956 as a trainee broker in the marine division of Matthews Wrightson. After setting up its credit insurance division, he became a board director in 1964; managing director of successor Stewart Wrightson in 1972; and chairman of Stewart Wrightson Holdings P.L.C. in 1981.

Sir David helped build Stewart Wrightson until it was sold in 1987 to Willis Faber P.L.C. As deputy chairman of Willis Wrightson, Sir David was targeted to be the next chairman. But after a difficult merger in which hundreds left the group, he resigned to become chief executive of Sedgwick Group P.L.C. in 1988 and chairman in 1989.

Sir David was named The College of Insurance's 1996 Leader of the Year; and was knighted by Queen Elizabeth II earlier this year for his achievements during his stellar London market career.

He retires at the end of this year, at age 64, to be succeeded by Max Taylor, executive director of Willis Corroon Group P.L.C.

Sir David spoke with Senior Editor-International Stacy Shapiro at his 12th floor office atop Lloyd's.

What lessons in your earlier career do you think helped you as chairman of Lloyd's?

The early lessons were that everybody's bound to make mistakes and it's a good thing to admit them and it's remarkable how much help you're given by people when things go wrong.

And there was a realization that however arrogant one becomes about one's own ability, you must work together with other people as a team. Also, I was very lucky to have one or two older people who took an interest in me. Their experience and advice and interest and guidance at times helped me in my career. They had no particular interest in me other than through a relationship which developed in business.

So I feel that it is very, very important to do as much as one can to help younger, very able people.

The year before you were selected chairman of Lloyd's, you said, "Anybody sane wouldn't want the job." So why did you agree to become chairman of Lloyd's?

The quote must have gone on. It wouldn't have been me if I hadn't added something like "but I'm passionate about Lloyd's." But there wasn't an alternative.I became the person that most people wanted for the job. I couldn't run away.

And I actually do feel passionate about Lloyd's and always have. To have let Lloyd's collapse without trying to restore it would have been a disgrace. I had a faith that we could find a route through.

Once you became chairman, were you surprised by the depth of the problem that you found?

As chairman of a Lloyd's task force in 1991, I was lucky in that I was much more knowledgeable than I would have been otherwise. But of course I was surprised, particularly by the depth of feeling among the members and the anger and the suffering; and by the huge complexity of the problems we faced.

But because the task was so enormous, in the most extraordinary sense the job was relaxing because all you could do was the best that you could do. It would have been impossible to finish the job unless you could do the best that you could do. So you got into a different sort of mind set.

Did you make any mistakes?

Certainly I misjudged a very fundamental thing, and that was time. Although we all knew in 1993 it would take time to reconstruct Lloyd's, I didn't think it would take so long.

Everyone had to work through a period of anger before they could come to a degree of give and take, before a solution could be produced and we could establish a consensus to get things fixed.

I believe the first offer to the membership, whatever it was like, was destined to fail because we hadn't yet reached that stage. Looking back, I would say that the failure of the first offer was absolutely why the second offer was successful.

But three years and eight months is a very long time span. I had been asked to serve for three years as chairman and I thought within the three-year period it would be possible to complete the job.

Were there any setbacks along the way?

Each setback was a building block for the next thing.

The verdicts that were coming through on members' litigation in one sense were setbacks, but in another sense they were not because they established the definition of liability and produced a degree of clarity. They set ground rules for where fault lay from which you could build an offer.

So in one sense the headline "Gooda Walker Members Awarded $500 Million" could have been considered a setback. But on the other hand, if that hadn't happened you wouldn't have been able to work so closely with (Gooda Walker Action Group Chairman) Michael Deeny and produce a settlement that actually worked.

So setbacks can be building blocks. Peter Middleton and I worked closely together and he was a considerable contributor to reaching out to names.

Though his departure was a setback at the time, Ron Sandler became chief executive with the qualities of a good manager and an excellent executor. So what I once considered to be a setback turned into a very great advantage.

What do you think were your personal qualities that allowed you to lead Lloyd's through this troubled time?

The only qualities that I would claim to have is that no one believed that I'd back away from the task. I was either going to be the last chairman of Lloyd's or we would solve it.

As time went on, we did cope with the problems and we built a record that people believed. So during those last difficult days with the court cases in America that seemed impossible, we were able to assure people that we would get it fixed. That was extremely important.

Louisiana Insurance Commissioner Jim Brown said one of your great qualities was that you were a great salesman.

Oh yes, to my colleagues, to names, to regulators, to everybody. One quality which I'm lucky to be able to do is talk. As a leader and a chairman you have to be able to stand up to any group and talk to them truthfully. We could only say that we intended to solve the problem, but we could make no promises because we didn't know if we could get there. So the question the whole time was whether they actually believed you or not.

Who was your most difficult audience?

It was the early meetings with members -- not just the floodlit meetings in places like the Albert Hall where you needed to control the proceedings -- but the smaller meetings where people were seriously angry and some faced destitution. They were daunting and there wasn't an immediate solution.

What are the most important changes in the market now?

The attitude of the market and blowing the Lloyd's doors open for the first time. There is now a real understanding that we are here to serve the customer.

The capital structure has changed. It may have evolved anyway (toward corporate capital), but in 1993 we faced two years of catastrophic losses and a period of bad publicity and anger. But serious investors were willing even then to invest money into us, about L900 million in the first year, which showed customers that serious people were willing to invest in us, which was important. If something like that hadn't happened, it is unlikely that there would have been an evolution at Lloyd's.

Opening the doors to the new form of capital helped us to accelerate change at Lloyd's.

What do you think will be the major issues for the market in the future?

I hope under Max Taylor, whom I am pleased will be the next chairman, that the market devotes itself to the needs of the customer, and that there will be less arguments about the different sorts of capital providers. The market rather should spend more time on the problems of distribution and how to adapt to the changes in risk transfer.

What has been your priority in this, your last year as chairman?

The key reason I am here at all is because I believe that you shouldn't leave a job until you have appointed a good successor.

I didn't choose Max Taylor at all. He was chosen by a committee led by Sir Jeremy Morse, who considered a number of people related to the market. The Council agreed that Max was the best choice.

As chairman, you have to care about Lloyd's. There are easier ways of earning a living. There are still pressures in this job that are different from those that you find when you are running a company. On good days it is fascinating; on bad days it's bloody difficult. But what carries you through is that you care about it. We were very fortunate that there was such a good range of people who are related to the market to choose from.

Meanwhile, there is a very good team in place. Ron is an excellent chief executive. He offers a range of talents and characteristics that you don't want to duplicate. Max and Ron will be a very good team together.

What will you be doing in your retirement?

Until I have finished this job, I will not comment.