Sir David Rowland
Insurance broker who led the rescue of Lloyd’s but could not save Natwest from takeover
SIR DAVID ROWLAND, who has died aged 85, led a rescue of the Lloyd’s insurance market when past losses and scandals threatened to overwhelm it, and went on to tackle another corporate challenge at Natwest.
Rowland was chairman of Sedgwick, a leading City insurance broker, when he declared in 1992 that “anyone sane wouldn’t want the job” of chairman of the committee of Lloyd’s – though he added later that to have let the 300-year-old institution collapse “would have been a disgrace”.
An over-rapid expansion of Lloyd’s underwriting capacity in the 1980s had sown the seeds of its crisis of the early 1990s. US court judgements in asbestosis cases had created billions of dollars of reinsurance claims, as had a series of hurricanes and industrial accidents; losses for the 1990 underwriting year were almost £3 billion.
Meanwhile, accusations of malpractice were rife, particularly in relation to profits made by insiders at the expense of the external underwriting Names who traditionally accepted unlimited liability – and many of whom had joined vociferous “action groups”. Amid rising anger and distress, Sir David Coleridge, Rowland’s predecessor as chairman, asked Rowland to lead a task force to find a way forward.
His January 1992 report offered scant comfort for stricken Names but proposed to bolster the market’s future by introducing corporate membership, modifying the principle of unlimited liability, and creating a new regulatory body. Despite some ructions over these findings, Rowland was the obvious person to succeed as chairman, his nomination having been announced at a heated extraordinary general meeting attended by 2,500 Names.
Such gatherings – in the Albert Hall and elsewhere – punctuated the early phase of Rowland’s tenure, but his brisk courtesy and steely eye were a match for Names’ spokesmen who shouted their grievances from the floor. It was to his advantage, he said later, that “no one believed that I would back away from the task; I was either going to be the last chairman of Lloyd’s or we would solve it.” Fluency as a public speaker helped to turn market opinion in his support.
Working with two forceful chief executives – first the former monk Peter Middleton and later the South African-born Ron Sandler – he steered the introduction of corporate membership and creation of a new vehicle, Equitas, funded by a levy on members, to reinsure the whole market. Names’ exposure became limited and settlements were reached with litigant groups.
By the middle of the decade Lloyd’s was growing again. Rowland received the market’s rarely awarded gold medal in 1996, and retired from the chair the following year.
Despite the City’s recognition of this achievement, Rowland – already 65 – was seen as a surprising choice in September 1998 to succeed the barrister Lord Alexander as chairman of Natwest, the high street bank whose reputation had been battered by a decade of scandals, trading mishaps and unwise overseas ventures.
Under Alexander the bank had scaled back its activities; hopes of further recovery were pinned on chief executive Derek Wanless’s ability to squeeze costs and make a strategic merger to bolster Natwest’s core UK business. But a flirtation with Abbey National came to nothing and the announcement in September 1999 of a takeover of the insurer Legal & General provoked such negative reactions that Natwest itself became a takeover target – first for Bank of Scotland and then for Royal Bank of Scotland. As the bid battle loomed, the first response of Rowland and his board was to ask Wanless to resign.
Rowland himself took on the chief executive role as well as the chair, bringing in his former Lloyd’s colleague Ron Sandler as chief operating officer. They promised to sell off parts of Natwest in order to return cash to shareholders, but Rowland’s eloquence cut little ice with investors and by Valentine’s Day 2000 RBS’S £21 billion bid – accompanied by a plan to slash 18,000 jobs – had prevailed. There was to be no continuing role for Rowland.
John David Rowland was born on August 10 1933. His father Cyril found work as an insurance inspector in London in the 1930s and served in the Indian Army during the Second World War. After the war Cyril rose to be managing director of a City insurance firm and David went on to St Paul’s School and Trinity College, Cambridge, with a view to a medical qualification. However he swiftly decided he lacked the necessary dexterity: “I’d look at a body I had dissected and wonder why there were more bits hanging off than anyone else’s.”
National Service followed in the Royal Horseguards, but was cut short by a kidney complaint. In 1956 Rowland took up an introduction from his father to the insurance broking firm of Matthews Wrightson, where he began as a trainee broker. He was made a director in 1964, at 31, and as a protégé of the firm’s chairman Gordon Henry, was promoted to managing director in 1972. He succeeded as chairman in 1981 of the renamed Stewart Wrightson, having helped steer it through a long expansion in difficult markets.
In 1987 Stewart Wrightson was bought by Willis Faber. Rowland became deputy chairman of the merged group with the expectation of moving up to chairman – but lost out in the ensuing power struggle and left the following year to become chief executive, then chairman, of Sedgwick.
He was also a non-executive director of Royal London Mutual Assurance and the investment bank SG Warburg. During his Natwest chairmanship his weeks were divided between the City and Oxford, where he was president of Templeton College – formerly the Oxford Centre for Management Studies, where he had previously been chairman of council. Among numerous other outside commitments he was deputy chairman of governors at St Paul’s School and a long-serving director of Project Fullemploy, which offered skills training for disadvantaged youths.
David Rowland was knighted in 1997. He gave his recreations as “admiring my wife’s garden” at their country home in Suffolk and “running slowly” – which he did in London in the early mornings before going to his office. He also enjoyed modern art and was a keen golfer.
He married first, in 1957, Giulia Powell. The marriage was dissolved and he married secondly, in 1992, Diana Matthews, née Dickie. She survives him with the son of his first marriage and a stepdaughter and stepson. His daughter from his first marriage and another stepdaughter predeceased him.
Sir David Rowland, born August 10 1933, died February 18 2019