Rated A (excellent) by A.M. Best, the leading insurance rating organization.

THE BARNSTABLE STORY

2016 Annual Report

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The Barnstable was founded in 1833 out of a love of community. A group of Cape Codders banded together to pool their resources and formed Barnstable County Mutual Insurance Company to protect their modest homes from the peril of fire. They shared a common goal of providing insurance to the Cape Cod community with unquestionable reliability, fairness and sustainability. While much has changed since 1833, that same spirit is what drives The Barnstable today. 

For the Company’s first 100 years, the greatest risk to The Barnstable was conflagration; the risk that every home in its portfolio could burn in the same fire. The Company effectively mitigated this risk by keeping a 100-foot minimum distance between any two insured homes. As a result, The Barnstable did not have to hold much capital or money to support its business, and was able to return most of its profits back to policyholders in the form of dividends. The Company was so successful in managing its risks in the initial years, that by 1845 it was returning over 100% of annual premiums back to policyholders. 

The Great New England hurricane of 1938 was the watershed moment for The Barnstable, as well as the entire insurance industry. The ‘38 storm destroyed many homes in New England. Most of the storm damage was uninsured, as very few homeowners bought insurance for wind damage. After the 1938 storm, the market demanded coverage for wind, and the insurance industry responded by introducing the current homeowner policy. 

The Barnstable’s adoption of the homeowner policy in 1956 significantly increased the risks in fulfilling its mission, as now every home in its portfolio could suffer a loss from the same windstorm. Faced with this existential threat, not only could the Company no longer pay policyholder dividends, as it needed to retain capital to fund the potential windstorm damage, but it now had to borrow additional capital in the form of catastrophe reinsurance because the storm potential exceeded its surplus.

THE BARNSTABLE TODAY

Today, capital adequacy, having access to enough money, is the lifeblood of our mission; we must maintain the financial wherewithal to sustain us through another storm like the 1938 hurricane. In addition, we must remain judicious with respect to the size of our insured portfolio to limit the catastrophic loss potential.

Because The Barnstable is organized as a mutual insurance company, we can stay true to our mission of providing high-quality coastal home insurance; we are not pressured by investor demands to produce high returns, which can drive public and venture-capital-backed insurance companies to carry too little capital.

The Barnstable is the only insurance company that was born on Cape Cod and has been serving the Cape and its coastal neighbors consistently since 1833. We live in this community and care about it, and we believe that sets us apart from our competition. We approach policyholder claims as our product and service, and we strive to deliver them with excellence. While you may not think you will ever have an insured loss, The Barnstable is the company you want to be with if you do.

We appreciate the trust and support of our Independent Agents and Policyholders and we look forward to continued success in 2017.

JOHN L. DEMELLO
President & CEO

DIRECTORS
(As of March 1, 2017)

Shawn J. Almeida
David G. Brown
Gary M. DellaPosta
John L. DeMello
Rosemary M. McAndrew
Christine M. Murphy
Jane M. Remy
Charles H. Ritch
William W. Saltonstall
Hamilton N. Shepley
Paul R. Silva
Robert A. Talerman
Gerard P. Williams

Woods Hole, Cape Cod, during the 1938 Hurricane

OFFICERS
(As of March 1, 2017)

John L. DeMello
President and Chief Executive Officer

Christine M. Murphy
Vice President and Chief Financial Officer

Deborah A. Sutton
Assistant Vice President and Secretary

Howard W. Perkins
Assistant Vice President and Treasurer

Barnstable County Mutual Insurance Company

Barnstable County Insurance Company 

All Rights Reserved. The Barnstable ® 2017

915 Route 6A, Yarmouth Port, MA 02675 | 1-800-310-9310 |

Barnstable County Mutual Insurance Company Barnstable County Insurance Company

www.thebarnstable.com

*The maximum coverage limits of all in-force policies, representing coverages A (dwelling), B (other structures), C (contents) and D (loss of use).

** Capital, comprised of surplus and catastrophe reinsurance, as a percentage of the total insured values.

CAPITAL ADEQUACY

FINANCIAL POSITION

2016 was a good year for the Company. As is typical for most years, the winter drove our 2016 results with the Valentine weekend producing nearly a third of the annual losses due to frozen pipes and other winter related damages. Surplus capital grew by 4% in 2016, driven by underwriting profits and good returns on common stocks. We continued to increase our catastrophe reinsurance capital to keep pace with the growth in the total insured value of our portfolio. While the number of homes insured declined by 3% in 2016, the total insured value of the portfolio grew by 4% due to inflationary coverage adjustments.

*Estimated pre-tax cost of a hurricane with a probability of occurrence every 100 years, net of catastrophe reinsurance recoveries.