This paper is an empirical investigation into the relationship between insurance companies’ premium and gross fixed capital formation (GFCF) in Nigeria and specifically how the latter responds to stimuli emanating from the insurance companies. Data were collected from CBN statistical bulletin from 1993-2013 while regression statistical model was used for estimating and analyzing the variables involved. The results revealed that the insurance industry premium insignificantly correlate with Gross Fixed Capital Formation. Some Empirical findings also showed that there is a low insurance market activity in Nigeria and that Nigerians have not fully embrace the insurance industry despite its importance to the growth of the economy. This means that insurance premium is not invested in productive sectors in the economy, thereby making economic growth minimal and thus capital formation. Based on the findings, the paper therefore recommends the formulation and implementation of policy measures that will increase insurance penetration, improve insurance fund mobilization and enlarge the insurance market in the Nigerian economy.