Insurance company incorporated on 13 February 1900, promoted by individuals connected with shipping and mining. Among them were Francisco Martínez Rodas (founder of Marítima Rodas, Marítima Unión and —in September of the same year— Marítima Actividad), Santander capitalists such as Domingo Ortueta Garay, José Mᵃ Avendaño Gándara and Vicente Trápaga Gutiérrez, together with Biscayans such as Pedro D. Arana, Juan Víctor Aguirre Oxangoiti and Pedro Laiseca Arana. The interests of this group, led by Martínez Rodas, appear to lie in the shipping sector, but in fact they the expansion of the mining business into shipping and from there into insurance.
The founding purpose of the company was maritime insurance in all its forms, ship mortgages and “such operations as the Board might deem appropriate”, with maritime insurance always given priority. The company was incorporated with a share capital of twenty million pesetas. Subscribers were required to pay an initial 10%, so the paid-in capital at the outset was two million — an amount that can be regarded, for the time, as mid-range. Payment of the remainder would be determined by the Board, and until half the nominal value had been paid the shares would be registered.
Francisco Martínez Rodas and Darío P. Arana, chairman and vice-chairman respectively, were the first directors and held the key posts for the company’s initial launch.
The 162 initial shareholders subscribed the whole of the issue and, from the beginning of March 1900, the company started operating effectively. On its Board, in addition to several founders, we find prominent members of the Biscayan bourgeoisie: José Antonio Ybarra, Enrique Aresti, Cosme Palacio, appointed managing director, and the Alavese Marquess of Urquijo (Juan Manuel de Urquijo y Urrutia). Problems appeared at this early stage, since neither Ybarra, Aresti nor Urquijo took up their posts; moreover, three other directors (José Mᵃ Avendaño, Pedro Muñoz and Eduardo Téllez) resigned during the first financial year. Thus, at the end of that first year, the governing board consisted of: Francisco Martínez Rodas (chairman), Darío P. Arana (vice-chairman), Domingo Ortueta, Luis Belaunde, José L. de Moyúa, Luis S. del Valle, Hilario Múgica, José Amézola, Luis de Salazar Zubía, Juan T. de Uribe, Martín Berreteaga and Emilio Vallejo Arana.
Francisco Martínez Rodas was a career soldier who reached the rank of infantry colonel, born in Onda (Castellón) in 1847. His military profession brought him to Biscay during the last Carlist War. He married a Biscayan, Eloísa Arana Mendiolea —sister of Pedro D. Arana— and settled in Portugalete, continuing his father-in-law’s mining businesses, one of the leading mining brokers of the mid-nineteenth century.
Martínez Rodas did not devote himself solely to mining; he also had a strong presence in the shipping sector. In a short span of time he founded as many as four shipping companies: Marítima Rodas, in 1898, with three ships; Marítima Cantábrica de Navegación, in 1899, with capital of six million pesetas and four steamers; Compañía Marítima Unión, in 1899, with capital of sixteen million and five vessels dedicated to transatlantic transport; and Marítima Actividad, in 1900, with a further four ships and capital of three million pesetas, in which other major industrialists and merchants of the day, such as Federico Echevarría and Juan Gurtubay, also participated. Except for Marítima Unión, the other three were designed to participate in ore transport.
In another sphere, he was also intensely active in politics, initially under the influence of Víctor Chávarri in the political context of the time: he was elected deputy for the district of Marquina in 1893, then senator for Biscay, together with Chávarri himself, in 1896. In 1898 he was elected senator for Huesca and in 1901 for Santander. At the beginning of 1909 he was appointed senator for life, although he was hardly able to enjoy the post because he died in December of that same year, 1909. His meteoric business career during the 1890s earned him the title of Count of Rodas in February 1901.
His brother-in-law Pedro D. Arana was, like Martínez Rodas, a partner of Víctor Chávarri in mining ventures. He was also active in shipping and in politics, holding posts in the Provincial Council of Biscay, elected for the district of Baracaldo in 1880.
Another well-known figure —more for his progeny than for himself— was José L. Moyúa, father of Federico Moyúa Salazar, later mayor of Bilbao. Luis de Salazar was also connected to Chávarri; in fact he was both his cousin and his brother-in-law, as he married Víctor Chávarri’s sister, Emilia Josefa. In addition to his mining businesses, he engaged in politics, serving as vice-president of the Provincial Council 1905 and 1907 and then as its president from that date until 1909.
Another interesting figure among Aurora’s first directors —who would become chairman 1933 and 1952 (except for a ten-year interval 1928 and 1938)— was Emilio Vallejo Arana, nephew of Pedro Arana and of Francisco Martínez Rodas. Until his death in 1952 he maintained a close relationship with the company, although he combined these businesses with involvement in CVNE (Compañía Vinícola del Norte de España), as he married Sofía Real de Asúa, one of the heirs of CVNE’s founders. In general, therefore, we find people linked to mining businesses (Martínez Rodas, Arana, Salazar, Vallejo, …).
The case of Aurora is especially significant of a key moment: the years around the turn from the nineteenth to the twentieth century, which marked the entry of the Basque Country (or, more precisely, Biscay) into a new phase, of change or widening of interests, and its entry into the channels of modernisation.
Aurora’s immediate-term results could hardly have been better. In a month and a half it made profits of 26,000 pesetas and already had assets of almost 41 million pesetas, with only two million paid in. It should be borne in mind that, quite logically, Martínez Rodas immediately insured his ships with Aurora, which helped to attract clients. The company also put in place an overseas commercial network, reaching agreements with brokers in London, Bordeaux and Paris.
These first good results made successive capital increases inevitable up to June 1900, by which time 50% had been paid up, bringing the total to ten million. That is, in just a few months of existence it had already reached a share capital that placed it among the province’s major companies.
At the close of its first financial year (1900) the results were, apparently, brilliant. It had acquired a building at the start of Bilbao’s Ensanche. It had collected more than a million and a half pesetas in premiums —since March—; the balance-sheet total stood at almost 76 million pesetas and movements across all its accounts approached 950 million pesetas. Such astronomical figures for a company operating for nine months cannot but attract attention, especially bearing in mind that they occurred at a time of declining maritime traffic and freight rates. The reason for such rapid expansion is that Aurora, by decision of its Board, had moved into banking.
Indeed, 1900 and 1901 the city’s financial activity (Bilbao) clearly quickened. Amid other banking initiatives, Aurora also embarked on that venture. The short-term results were certainly splendid. In fact, its balance sheet indicated that only 7% of its liabilities and 5% of its assets related to insurance, the other items being more typical of a bank than of an insurer. Of the 565,250 pesetas profit, 457,575 pesetas came from the banking arm, while the remaining 105,675 pesetas came from the insurance business. These results corresponded, as its first report noted, to a period of feverish industrial and commercial activity in the early months of 1900.
In the midst of a runaway speculative spiral and with the announcement of new capital calls (dividendos pasivos) —when no cash dividend had been paid— its share price fell sharply. In July 1901 its quotations collapsed. The payment of a first dividend, a meagre 4%, and the announcement of a plan to become part of a newly created French bank only worsened the situation. Further measures, such as the announcement of calling up the entirety of the subscribed capital —an operation that had to be suspended—, aggravated matters, culminating in November with the announcement of the bankruptcy of its main promoter, Martínez Rodas, who in those months had done nothing but accumulate losses in his businesses, estimated at around seven million pesetas. Problems at his shipping companies —with ships acquired at high prices in a freight market that soon weakened—, at Aurora —whose shares he bought to support the price—, together with other doubtful investments that also affected the results of his other firms, made plain the failure of a financier whose rise was as swift as his fall.
His ships were insured with Aurora, which also held in its portfolio, besides government debt, securities of his other companies such as Minas de Cala or Crédito Industrial Gijonés. Thus, adverse conditions in one area created problems in others. The result, as noted, was his bankruptcy.
The solution for Aurora, which came close to liquidation, was restructuring. In 1901 it recorded losses of nearly two million pesetas, so it had to reduce its capital to five million pesetas and wound up its banking division. This settlement also included a change of its Board of Directors.
The results for 1901 were disastrous not only in banking but also in insurance, according to the Board, due to the loss represented by the London agency, which was also wound up. By then it already had 30 fire branches and 25 transport branches, both in Spain and abroad, through which it would continue to operate. Luis S. del Valle, Pedro D. Arana, Luis Balunde, Hilario Múgica and José L. Moyúa resigned; the annual report was signed by Martínez Rodas —who remained chairman—, Luis de Salazar, Martín Berreteaga, José Amézola, Domingo Ortueta, Juan Uribe, Emilio Vallejo and the managing director Cosme Palacio.
In any case, Aurora’s “restructuring” was relative: although by 1902 Martínez Rodas had left the utive —while remaining Honorary President—, several founders or directors stayed on, such as the aforementioned Vallejo or Ortueta (Chairman of Aurora 1928 and 1938). From another perspective, the shareholding: as at 30 December 1906, Francisco Martínez Rodas was the largest shareholder with more than four thousand shares, over 10% of the total; Pedro Laiseca Arana held more than 2,500 shares, as did Domingo Ortueta. With around 1,200 shares were Pedro D. Arana, Enrique Aresti and the shipowner Juan Antonio Acha. In short, a significant portion of the capital (approximately 20%) was controlled by the Arana clan.
The years of the Great War were particularly significant, since insurers had obvious difficulties in paying claims. Reinsurance was already common practice, especially in marine, but it was controlled by foreign companies. Hence in 1919, at Aurora’s initiative, the first Spanish company devoted to reinsurance was formed, Sociedad Anónima de Reaseguros Garantía, which grew modestly but operated at least until the 1970s.
Once past its initial troubles and stabilised (in 1921 it had paid-in capital of 4.5 million pesetas), Aurora began to expand within the sector into different lines such as life, fire and theft cover.
It also expanded geographically. In the 1920s, Aurora already had a network of agents elsewhere in Spain and abroad, not only in Europe but also in the Americas (Mexico and Cuba). Its policy of investing in plots did not cover only Bilbao: it also owned buildings in Madrid (Recoletos), Barcelona (Cortes), Seville, Cordoba and Andújar. In 1930 it acquired a plot at the junction of Plaza Diego López de Haro (now Plaza Moyúa), Iparraguirre and Ercilla, where in 1931 it began constructing what would later be its head office (as well as an office building for rent, which still serves that purpose). In short, Aurora had followed —or was following— the sector’s almost general trend of broadening and diversifying activities.
Its good results prompted interest from the Bank of Bilbao in Seguros Aurora. In 1929 Seguros Aurora joined the Bank of Bilbao’s network with the appointment of two directors by the credit institution (Julio Hernández Mendirichaga and Juan Manuel Olavarrieta). Its integration within the Bank of Bilbao’s orbit continued until recent times, when the Bank (by then BBV since 1988) partnered with Seguros Axa; in 1997 a merger process began which culminated in 2000 with BBVA’s sale of its stake in the Axa-Aurora holding company, as a result of which the Aurora brand has disappeared in recent times.
Eduardo ALONSO OLEA (2007)