Last Updated: 3/3/2026

Issue: Infrastructure is the permanent facilities and structures that a society requires to facilitate the orderly operation of its economy.[i]  There is a substantial funding gap between what is required to support infrastructure going forward and planned spending n the United States and over much of the rest of the world. 

Background: In the 2025 Report Card for America’s Infrastructure, 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.  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: $3.7 trillion.”[ii] 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 provide 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, “Can Insurance Company Investments Help Fill the Infrastructure Gap?” 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. 

Status: Insurance companies have long been a significant presence in infrastructure financing. As of Dec. 31, 2019 U.S. insurers hold approximately $9 billion in U.S. securities ($1 billion in preferred stock, $144 billion of municipal revenue bonds, and $413 billion of corporate bonds in the following infrastructure sectors: utilities; natural resources; communications; transportation; social infrastructure and power generation).[1] Government infrastructure funding is facing significant political headwinds, encouraging a more efficient allocation of capital by shifting the supply of long-term funding ton 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 “Social Impact Investing in the U.S. Insurance Industry,” 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.