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Last updated: 7/10/2026

Issue:  is the permanent facilities and structures that a society requires to facilitate the orderly operation of its economy.  There is a substantial funding gap between what is required to support infrastructure going forward and planned spending in the United States and over much of the rest of the world. Insurance companies, which are among the world’s largest , already invest hundreds of billions into economic infrastructure, which provides several attractive characteristics for insurers in particular. But insurance companies have been called upon to make infrastructure investments to help fill the .

Background: In the , the American Society of Civil Engineers (ASCE) estimates that U.S. investment needs between 2024 and 2033 will total $9.1 trillion. This amount would be required for all 18 of the Report Card categories (such as bridges, energy, schools, and roads) to reach a state of “good repair.” Of this $9.1 trillion, a projected $5.45 trillion is currently funded by public and private sources, leaving a funding gap of $3.7 trillion over 10 years. 

Traditionally, municipal bonds and private activity bonds (PABs) have been the primary source of financing infrastructure. Private activity bonds are municipal bonds issued by a state or local government to finance a project, run by a private company, nonprofit, or other non-governmental borrower.

Opportunities to invest in infrastructure also include private debt, public and private equity, and direct investment. Federal funding can be critically important. Importantly, the $5.45 trillion of currently projected infrastructure funding assumes spending at current levels. If the U.S. Congress were to “snap back” to investment levels in place prior to recent [post-pandemic] increases in federal spending, the “snapback gap would equal the entirety of the 2025 Report Card gap: .” If all 18 ASCE categories were included, the snapback in funding would be an estimated $4.4 trillion.

Infrastructure projects are asset-intensive and generate predictable and stable cash flows over the long term, which provides a natural match for insurers’ liabilities-driven investment strategies and prevent economic capital erosion arising from duration mismatches, particularly in a low-interest rate environment. Because infrastructure investment can offer portfolio diversification, low-risk and competitive returns over long timeline, institutional investors, such as insurance companies and pension funds, are increasingly seeing infrastructure as a viable and distinct asset class. However, according to some industry professionals, the resilient and credit performance of infrastructure has not been adequately reflected in the standard approaches for credit risk in most regulatory frameworks.

In its report, “” the CIPR documents substantial existing insurance company investments in (physical) infrastructure and a significant capacity for additional infrastructure investment that could meaningfully reduce the infrastructure funding gap. 

Insurance companies have long been a significant presence in infrastructure financing. As of 2019, the latest date for which detailed data are available, U.S. insurers , of which $413 billion was corporate bonds (73%), $144 billion was municipal bonds (25%), and the remaining $9 billion was held in common and preferred stock.” This figure does not include investments in social infrastructure, which are financial investments made with the explicit intention of addressing social concerns .

Insurance industry investments in infrastructure included largely investments in utilities, natural resources, communications, transportation, and power generation). About 95% of insurance industry bond investments in infrastructure are in the broad industry of “energy,” two-thirds of which is in downstream (end user) electric power generation, transmission, and distribution. It does not include investments in social infrastructure. At the time of these calculations, the insurance industry reported $6.99 trillion in total cash and invested assets. Thus, by this measure, infrastructure accounted for roughly 8% of total cash and invested assets. As of year-end 2024, the latest date for which data are available, total cash and invested assets was $8.98 trillion. If infrastructure investment remained at 8% of cash and invested assets, 2024 infrastructure investments by the insurance industry would have been about $727 billion.

Status: Government infrastructure funding is facing significant political headwinds, encouraging a more efficient allocation of capital by shifting the supply of long-term funding to insurers.  Some industry representatives report impediments (i.e. regulatory, procedural, etc.) in the insurance industry from being more active in this asset class.

In 2025, the CIPR published “,” which highlights current, baseline insurance industry “social impact” investments, which are largely investments intended to spur community development and that usually are targeted to low- and moderate-income populations. It provides a baseline estimate of $177 billion in industry social impact investments in 2023, or about 2.8% of total insurance industry cash and invested assets. The document discusses several avenues insurance companies could take to make social impact investments, the largest amounts of which are in municipal bonds, commercial mortgages, and Low-Income Tax Credits.