I have just bought an older Farm house and the service cable insulation is very worn. Where it enters the house there is no plastic/coated insulation. It appears to be wrapped since threads are visible. I am wondering if this could be safely re-insulated/coated or should the service wire be replaced?

Replace the cable.

Any repair will be considered as temporary, and not equal to the integrity of insulation of undamaged cable. This cable is considered to have no overcurrent or short circuit protection, and any failure will be serious.

Also, look into upgrading the entire service entrance.