The 1944 Film Noir, “Double Indemnity, gets its title from the insurance clause which doubles life insurance payouts due to death occurring in a rare way. Whenever I hear the sustainability term “double materiality”, I think of that film and Barbara Stanwick. In the film Stanwick plays a housewife who convinces an insurance agent to kill her husband to get the payout. However, double materiality is a much less sinister process in which you look at your business or property’s impact on the environment AND at the environment’s impact on your business or property. That might not seem necessary from an insurance perspective for our industry. Until that is, you look at Babcock Ranch in Florida.
Babcock Ranch is a town located on Florida’s west coast about fifteen miles northeast of Fort Meyers. It is a sustainable community with a mixture of multifamily, residential, and commercial buildings. Like any good sustainable community, it contains parks and open space and is powered by two solar farms. What is unique about Babcock Ranch is that the developer wanted to work with the environmental features of the location, preserving wetlands and native vegetation (which ultimately function as a natural flood barrier).
Additionally, the developers took into consideration the area’s environmental risks, like hurricanes and flooding, that could affect the town. Large retaining ponds were designed to help with flooding and the streets were constructed to allow flood waters to drain through them. Infrastructure was put underground and buildings were constructed to withstand 150 mile-per-hour winds.
Did double materiality pay off? So far, yes. Babcock Ranch has withstood three major hurricanes: Ian, Helene and Milton with only downed street signs, a few fallen trees, and a damaged EV charging carport to report as losses. There have been no losses of power even when areas surrounding the town have experienced interruptions of service. There have been no flooded homes. In a hurricane-impacted part of Florida where some insurance carriers might consider a policy risky, Babcock Ranch is less risky and in demand.
As we continue to build, rebuild and reposition properties, it will serve us well to look at our buildings with a sense of double materiality. Instead of creating a conflict with nature, perhaps it might be time to embrace it. If not, Mother Nature might become our femme fatale.
