In many ways, the Great New England Hurricane of 1938 served as a watershed moment for the Barnstable. This extraordinary storm greatly damaged and radically altered the landscape across the Cape and the rest of the region. It also transformed the entire insurance industry because up to that time, very few homeowners had purchased insurance coverage for wind damage. Demands for wind protection coverage drove the insurance industry to develop the current homeowner’s policy, which The Barnstable adopted in 1956.
Adopting the homeowner’s policy significantly increased the risk relative to fulfilling The Barnstable’s original mission. Every home in its portfolio could suffer a loss from the same windstorm, an existential threat to the company. While catastrophic hurricanes are infrequent on Cape Cod, the ’38 Hurricane and other severe storms over the years have proven that they can and do hit Cape Cod.
What was necessary, and what The Barnstable has achieved, is access to sufficient funds–capital adequacy. When it comes to our mission, capital adequacy is the key, allowing us to maintain sustainability in the event of another super storm like the 1938 Hurricane. At the same time, we carefully manage the size of our insured portfolio to limit the catastrophic loss potential.
To learn more about how we manage our business, please read the financial reports below: