Like Robert said, the cloth sheathing in the front has thermoplastic insulation, which doesnt need to be called out. However, the cloth wire behind that appears to a different cloth wiring that might need to be called out. That looks like the type of older cloth wrap that probably has a rubber insulation, with tinned copper conductors. Often times the rubber cracks, and becomes deteriorated. This is the type that insurance is more concerned about. The braided cloth is usually not an issue, but when you see the cloth wrapped around the conductors, like the red one in your photo, that is almost always the rubber insulation that may or may not be an issue, you have to take a closer look at the terminations.
Attached is a pic from some that I saw a couple days ago, and you can see how the rubber is deteriorated, and cracking, leaving the conductor exposed. I did have to mention this one on the 4 point report for Florida.