Nigerian Insurers Sit on N2 Trillion, Miss Infrastructure Boom

In developed markets, insurance companies have emerged as key financiers of national infrastructure, committing between 10 to 15 percent of their investible assets to long-term infrastructure projects. These investments span transport, energy, housing, and broadband systems etc, all critical to driving sustainable growth.

But in Nigeria, a different story is unfolding.

Despite holding over N2 trillion in total investible assets, according to the report the Nigerian insurance industry remains largely absent from the country’s infrastructure financing landscape. This underperformance stands in stark contrast to global best practices, where insurers serve as a reliable source of long-term capital.

In countries like Canada, the UK, and Australia, insurers routinely invest in public-private partnership (PPP) projects, helping governments build and maintain critical infrastructure without excessive debt burdens. Their ability to align long-dated liabilities with long-term assets has made them ideal partners for national development.

By comparison, Nigeria’s infrastructure deficit in estimated at $100 billion annually, with continues to widen, even as local insurers sit on sizeable capital reserves.

Limited Involvement, Missed Opportunities

Several industry analysts and policy experts attribute the limited involvement of insurers in infrastructure development to a combination of regulatory, structural, and market-related constraints.

“There’s a mismatch between the kinds of infrastructure investment opportunities available and the risk appetite or regulatory latitude of insurance firms,” said a senior analyst at one of Nigeria’s leading investment advisory firms.

Other challenges include:

• A lack of investible infrastructure products tailored to the insurance industry;
• High political and repayment risks associated with public-sector projects;
• Limited policy incentives or frameworks to de-risk infrastructure investments for insurers;
• Weak collaboration between government agencies and industry regulators.

Call for Action and Policy Reform

However, momentum for reform is growing. The National Insurance Commission (NAICOM), in collaboration with the Federal Ministry of Finance, is currently exploring the creation of an insurance-linked infrastructure fund, according to someone familiar with the proposal. The initiative aims to unlock capital from the industry and direct it toward priority national projects.

“If Nigerian insurers were to allocate even 5 to 10 percent of their investible assets annually to infrastructure, that’s between N100 billion and N200 billion going into roads, rails, energy, and housing,” said one stakeholder familiar with the plan. “That could be a game changer.”

The move aligns with President Bola Ahmed Tinubu’s broader economic vision of expanding Nigeria’s GDP to $1 trillion through enhanced productivity, infrastructure development, and sectoral collaboration.

A Role Beyond Risk Coverage

While insurance companies in Nigeria have traditionally focused on underwriting and premium growth, industry stakeholders say the time has come for them to take on a more transformative role in the economy.

“Insurers should be more than just underwriters, they should also be builders,” said a NAICOM official. “They have the financial muscle and the long-term horizon needed to finance infrastructure sustainably.”

As Nigeria confronts tough fiscal choices and seeks alternatives to foreign loans, unlocking local capital remains a compelling path forward. The insurance industry, with over N2 trillion at its disposal, could become a critical lever in bridging the infrastructure gap said the report, if policy reforms and investment incentives are aligned.

Until then, Nigeria risks continuing to underutilize one of its most strategic pools of long-term capital, while lagging behind peers in delivering infrastructure that meets the demands of a growing population.

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