When I work with an insurance matter, I normally begin with simple questions. What was insured? Who owned it? What risk was covered? And what evidence explains the loss?
While reading about the history of insurance in Mexico, I found that these same questions were already important hundreds of years ago.
Many short histories give 1789 as the beginning of insurance in Mexico. This was the year when merchants in Veracruz reportedly organized a marine insurance company. The documents show a longer history.
Historian Hilario Casado Alonso studied more than 200 marine insurance policies connected with trade between Castile and New Spain. The policies cover the years from 1565 to 1586 and are preserved in the Archive of the Consulate of Burgos. They include information about ships, cargo, merchants, consignees, routes and incidents during the voyages.
Insurance connected with Mexico started long before the Veracruz company of 1789.
That year is still relevant. It concerns the effort to organize an insurance company locally in New Spain. It was not the first use of insurance for trade connected with Mexico.
Insurance came through Atlantic trade
Marine insurance existed in European commerce before the conquest of Mexico. Merchants in Mediterranean and Atlantic markets had already developed ways to transfer part of the financial risk of a voyage.
They later applied these methods to commerce with the Americas.
Casado found records of insurance connected with American trade as early as 1507 and 1508. Those examples involved Santo Domingo, not New Spain, but they show that merchants quickly used insurance for Atlantic voyages.
The basic arrangement was easy to understand. A merchant placed goods on a ship and paid a premium. One or several underwriters accepted part of the possible loss. If the vessel or cargo suffered a covered event, the insurer could be required to pay according to the policy.
The details depended on the contract. A policy could identify the ship, captain, route, cargo, destination and period of coverage. It could also explain which maritime risks the underwriters accepted.
The underwriter needed good information. The ship, experience of the captain, route, season and political situation could all affect the risk.
Burgos became important because it had money, merchants, brokers, legal rules and contacts across Europe. Casado describes the city as an important insurance centre for Spanish and Portuguese trade with the Americas during the sixteenth century.
The city was far from Veracruz, but its merchants had information about ships, ports and incidents on different routes. The policy could be signed in Spain while the property and commercial interest were connected with New Spain.
The original research is available in Casado Alonso’s study, “El comercio de Nueva España con Castilla en la época de Felipe II: redes comerciales y seguros marítimos”.
Ships and merchandise were already insured
The Burgos policies covered vessels and merchandise. They also help historians identify which ships travelled toward New Spain, what they carried and what happened during some voyages.
Ships leaving Europe carried textiles, wine, tools, metal products and other goods needed in colonial markets. Return voyages carried silver, hides, dyes and other valuable products from New Spain.
One of these products was cochineal.
This red dye has a strong connection with Oaxaca. During the colonial period, cochineal produced in Oaxaca became one of New Spain’s most valuable exports. Historian Brian Hamnett found that the Oaxaca dye trade reached a position in the export economy second only to silver.
Its production depended mainly on Indigenous communities. Jeremy Baskes has also studied how credit, colonial institutions and Indigenous production were connected in the eighteenth-century Oaxaca cochineal trade.
A shipment of cochineal could pass through many hands. Producers sold it to local or regional merchants. It moved toward Mexico City or Veracruz, entered an Atlantic shipment and was later sold in Europe.
Each part created documents, payments and different financial interests.
A loss at sea could affect the producer indirectly, but also the merchant, buyer, lender, consignee and insurer. The policy showed who could receive payment if the cargo was lost, and under which conditions.
This history has an uncomfortable part too.
Some insurance records studied by Casado involve routes between Africa and Spanish America. The wider Atlantic insurance system protected commercial interests inside an economy that included slavery, forced labour and colonial extraction.
Insurance was a financial method. It did not make the commercial activity fair or ethical. Insurance protected capital, and some of this capital was connected with systems that caused serious harm.
This part should remain in the history.
Commercial decisions in New Spain
Merchants in Mexico City financed mining, gave credit, controlled distribution and handled the movement of silver. They maintained relationships with people in Veracruz, Seville, Cádiz, Manila, Lima and other commercial centres.
Guillermina del Valle Pavón connects the growing power of Mexico City merchants with their role in mining finance, coinage and the transfer of silver to Spain. Her study of the creation of the Consulado de México gives important context for this merchant community.
Research by Arnaud Bartolomei also questions the idea that merchants in Cádiz controlled every part of the Carrera de Indias.
Cádiz merchants dominated much of the Atlantic crossing. Merchant groups in Mexico and Lima controlled important parts of inland distribution and American trade. The profits and commercial control were divided between different groups.
For me, this part is important. Merchants living in New Spain were making decisions about capital, credit, cargo and risk.
They decided what to import, whom to finance, where to sell and how to move merchandise between ports and inland markets.
The Consulado de México gave merchants a court
Insurance needs more than someone with money who accepts risk. It also needs contracts, records and a place to resolve disputes.
Mexico City merchants requested their own consulado during the sixteenth century. The Crown authorized the creation of the Consulado de México in 1592, and the institution began operating with its commercial tribunal in 1594.
The Consulado worked as a merchant corporation and commercial court. It represented the interests of its members and handled disputes between merchants.
This was useful for insurance disputes too. If an insurer refused payment, or if the parties disagreed about the meaning of the policy, they needed evidence and a legal procedure.
The law used by merchants changed over time.
Early commercial practice in New Spain had connections with rules and traditions from Burgos and Seville. The Ordinances of Bilbao of 1737 later gained influence in Spain and the Indies.
Margarita Serna Vallejo found that these rules spread to other consulados and territories of the Spanish monarchy. Her legal-history study is available through the Anuario de Historia del Derecho Español.
It would be incorrect to say that the Bilbao ordinances controlled all insurance activity in New Spain from the beginning.
The legal system developed through royal law, merchant custom, consular rules and different ordinances used during different periods. One famous legal text does not explain the complete practice.
Sea loans combined credit and maritime risk
Merchants did not always separate financing from insurance.
They also used the préstamo a riesgo de mar, or sea loan. This contract provided money for a ship, cargo or voyage, while the lender accepted part of the maritime risk.
If the ship arrived under the agreed conditions, the borrower repaid the capital and the marine interest. If the vessel was completely lost during a covered event, the lender could lose the right to repayment.
This was a credit instrument with an insurance function.
Historian Xabier Lamikiz found that notaries in Cádiz registered 28,333 sea-loan deeds between 1760 and 1785. These contracts were common because they gave merchants access to capital and allowed lenders to charge a higher marine return for accepting the risk.
Things began to change after the commercial reforms of 1778.
More Spanish ports were allowed to trade with the Americas. The number of voyages increased, competition became stronger and commercial profit margins became smaller. Sea loans started to decline after 1785.
Lamikiz considers that merchants increasingly separated the two functions. They obtained ordinary credit from one source and purchased marine insurance from another.
He presents this as a historical explanation based on the available evidence, but he also recognizes that more research is needed. His study, “The Decline of a Credit Instrument That Reigned Supreme,” was published in 2025.
Specialized insurance companies had one advantage. A company could divide a major loss between several shareholders. An individual lender had less capacity to absorb the complete loss of a ship and its cargo.
This gives better context for what happened in Veracruz in 1789.
The Veracruz company of 1789
Mexican insurance-sector histories normally identify the Compañía de Seguros Marítimos de Nueva España, established in Veracruz in 1789, as the first insurance company founded in the territory that later became Mexico.
The available history says the company was announced in the Gazeta de México in December 1788.
According to later reproductions of the notice, merchants sometimes failed to obtain insurance because they could not send instructions to Cádiz or another market before the ship sailed.
A company in Veracruz could make the decision closer to the port. This reduced the delay.
The problem was practical. Communication between Veracruz and Spain required time. A merchant could know that insurance was needed but still lose the opportunity to arrange it before departure.
Local underwriting gave merchants another option.
The evidence about the company’s real operations is limited. Institutional histories repeat the name and founding date, but there is less accessible information about its policies, paid claims, shareholders, losses or final liquidation.
For this reason, I would not describe every detail as completely established. The original announcement gives better evidence than later stories about how long the company survived or why it closed.
Trade connected with New Spain was already insured in the sixteenth century. The Veracruz company of 1789 was an important step toward organizing the insurance business inside New Spain.
These were two different moments.
The Comisión Nacional de Seguros y Fianzas includes the Veracruz company in its history of insurance and surety activity in Mexico. This is an institutional source, not a peer-reviewed study, so its detailed claims should be compared with archival evidence when possible.
Insurance regulation after independence
After independence, Mexico had to develop its own commercial institutions and insurance laws.
Private and foreign insurers operated during the nineteenth century. Mexican insurance-sector histories identify the Law on Insurance Companies of 1892 as the first specific Mexican law for insurance companies.
A more complete federal framework arrived in 1935.
The Ley sobre el Contrato de Seguro was published in the Diario Oficial de la Federación on August 31, 1935. The law regulates the relationship created by an insurance contract and remains in force with later reforms.
Mexico also published the Ley General de Instituciones y Sociedades Mutualistas de Seguros on the same date. That law was later replaced by the Ley de Instituciones de Seguros y de Fianzas, published in 2013.
The current institutional law regulates insurance companies, mutual societies, agents and other participants in the sector.
The current versions can be consulted through the Chamber of Deputies:
The market today is much larger than marine commerce. It includes life, health, vehicles, property, agriculture, liability, transport, credit and catastrophe risks.
Still, some basic work has not changed.
The parties must identify the insured interest. They must describe the risk, agree on the coverage and keep evidence of the contract. When a claim happens, someone must establish what occurred and whether it falls inside the policy.
What the old policies can teach an investigator
My interest in this history is connected with investigation work.
A sixteenth-century marine policy is very different from a modern claim file. But some questions are familiar:
- Who had the financial interest in the property?
- Was the person buying insurance also the owner?
- How was the cargo described and valued?
- When did the coverage start and finish?
- Which risks were accepted?
- What event caused the reported loss?
- Which documents, witnesses or records support the account?
- Were the statements made before the loss consistent with the statements made after it?
Insurance depends on evidence because the insurer is normally not present when the loss happens.
Early underwriters relied on contracts, letters, ship records, merchants, captains and reports from distant ports. Modern insurers have photographs, databases, GPS information, invoices and electronic communications.
More data does not automatically give a better answer. The records still need verification.
The same is true in modern private investigation work in Mexico. The source, method and final use of the evidence all matter.
Fraud can also begin before the claim. A person may misstate ownership, cargo value, the condition of property or the nature of the risk when applying for insurance. Later, the same person may give another version after the loss.
The work is not only to find an inconsistency. An investigator must understand whether it is relevant, whether it affected the insurer’s decision and what the evidence can actually prove.
This is also one difference between the work of a fraud examiner and an investigator. Reviewing documents, testing statements and establishing facts may overlap, but the purpose and final report can be different.
The Burgos policies are valuable because they show how long this problem has existed. Merchants, lenders and insurers needed reliable information about property they could not always see and events that happened far away.
New technology has changed the file. It has not removed the need for careful documentation.
Cover image based on a photo by Abdessalem BENYAHIA from Pexels. Edited for FahadHizam.com.
Selected sources
Bartolomei, A. (2024). The sharing of the profits of the Carrera de Indias: The actors of the Hispanic colonial trade and their monopolistic practices in the second half of the eighteenth century. The Americas, 81(1), 39–66. https://doi.org/10.1017/tam.2023.96
Baskes, J. (2005). Colonial institutions and cross-cultural trade: Repartimiento credit and Indigenous production of cochineal in eighteenth-century Oaxaca, Mexico. The Journal of Economic History, 65(1), 186–210. https://doi.org/10.1017/S0022050705050072
Casado Alonso, H. (2012). El comercio de Nueva España con Castilla en la época de Felipe II: Redes comerciales y seguros marítimos. Historia Mexicana, 61(3), 935–993. https://doi.org/10.2307/41303938
Hamnett, B. R. (1971). Oaxaca: Environment and trade. In Politics and trade in Mexico, 1750–1821 (pp. 9–23). Cambridge University Press. https://doi.org/10.1017/CBO9780511759581.002
Lamikiz, X. (2025). The decline of a credit instrument that reigned supreme: The sea loan in Spanish Atlantic world trade, c. 1740–1820. Revista de Historia Económica / Journal of Iberian and Latin American Economic History, 43(3), 368–389. https://doi.org/10.1017/S0212610925100694
Ley sobre el Contrato de Seguro, Diario Oficial de la Federación [DOF], 31 de agosto de 1935 (México). https://www.diputados.gob.mx/LeyesBiblio/ref/lcs.htm
Minzoni Consorti, A. (2005). Crónica de dos siglos del seguro en México. Comisión Nacional de Seguros y Fianzas. https://www.gob.mx/cms/uploads/attachment/file/74253/Cronica_de_dos_siglos_del_seguro_en_Mexico.pdf
Serna Vallejo, M. (2024). Las ordenanzas del Consulado de Bilbao: Su difusión por España y América. Anuario de Historia del Derecho Español, 94(1), 521–562. https://doi.org/10.53054/ahde.vi94.10673
Valle Pavón, G. del. (2002). Expansión de la economía mercantil y creación del Consulado de México. Historia Mexicana, 51(3), 517–557. https://historiamexicana.colmex.mx/index.php/RHM/article/view/1358
Private investigator and criminal-justice researcher based between Mexico City and Oaxaca. He works on financial crime, due diligence, and asset tracing, and writes on policing, organized crime, corrections, and the law in three languages. More about Fahad →
Have a matter in Mexico that needs verified facts?
Tell me the decision you need to make and what you already have. I reply within 24 hours.
Start a case reviewDiscover more from Fahad Hizam alHarbi
Subscribe to get the latest posts sent to your email.