ABSTRACT The aim of the project is to evaluate or appraise the investment of insurance funds in the Nigerian economy. In order to carryout this project, some statement of problems were evolved, the purpose of study as the sample size and various instrument used for the collection of data. These helped to direct the course of this project work. The hypothesis were also tested and accepted with the responses received through administering of personal interview questions. On the whole, the purpose of the study were achieved and the problem statement answered. The researcher also received relevant literature that relate to the topic of the research. The review of literature gave detailed information of the development and importance of the insurance industry in Nigeria, as well as the various classes of funds which they invest. There was a view of the legal requirement binding the investment of insurance funds in the Nigerian economy. Some of the reviews were explained in details. In the cause of the study, the researcher was able to note the problems that face the investment of insurance funds in Nigeria. Recommendations were also made on how these problems will be solved. Furthermore, in the course of the study, the data collected from respondents and the hypothesis were analysed and it was discovered that investment of insurance funds enhances the economy. Finally, in chapter five, the researcher concluded his finding, made suggestions for further research, in the area of enlightenment, provision of a developed capital market and recommended that the insurance companies should transact on cash basis, creation of insurance businesses and many other things. CHAPTER ONE INTRODUCTION The image of insurance has become more sensitive than ever, because we are in are in a world full of uncertainties, all kinds of stresses, growing complexities of business in modern day. Nigeria, coupled with the increasing number of business concerns employing many hands, the importance of an insurance scheme can hardly be underestimate. We can also note that every aspect of human life in any dimension one can think of is subject to one risk or the other. The risk involved many be against human life or material possession. Insurance is one of the social science which essentially is designed for risk taking. This process of risk taking entails the pooling together of the resources of many individuals in order word, insurance is the management of a pool of risk whereby, the fortunate members of a group assist the unfortunate few who suffer losses. Adeyemo (1999:12) defined insurance as a social and economic device which provides financial compensation against the effects of any misfortune. This compensation is made from the accumulated contributions of all parties taking part in the insurance scheme. Apart from covering industrial insurance also protects corporate bodies and other business organization from varieties of hazards like burglary, workman compensation indemnity, goods – in – transit, public liability etc.Investment refers to that part of a person’s income or firm’s income that is immediately put to use for a certain return of additional income. The investment of insurance funds in Nigeria is regulated by the insurance decree of 1976 under section 18. the substantial funds held by insures are invested as a funds held by insurers are invested as to earn interest on capital gains. Insurance companies provide funds for investment through the premium they collect from their numerous policy holder. Life insurance companies for instance, invest funds that flow to them from many policy holders thus, becoming important source of capital funds for the Nigerian economy. Insurance companies help to provide the state with a steady flow of investment funds which are essential to the community.The investment of insurance funds helps to contribute profits to the national purse and also provide labour for the working population in a given area.