This study investigated the relationship between insurance intermediation and capital formation in Nigeria using time series data sourced from the publications of Central Bank of Nigeria Statistical bulletin, annual reports of quoted insurance firms and Nigeria Bureau of Statistics. The ordinary least square method of co-integration, unit root test; Granger causality test and vector error correction model was used as data analysis methods. Capital formation was used as dependent variables   while insurance claims on fire accidents, insurance claims on motor vehicle accidents, insurance employee claims, insurance expenditure on fire accidents, insurance expenditure on motor vehicle accidents and insurance employee expenditure.  The study found that 81.7% and 78.8% variation in capital formation in Nigeria could be traced variation in insurance financial intermediation as formulated in the regression model. The β coefficient shows that intermediation proxy by employee claims and fire accident has negative effect on capital formation  while motor vehicle accidents accident have positive effect on capital formation and  that 98.4% and 98.3% variation in capital formation in Nigeria could be traced variation in insurance financial intermediation as formulated in the regression model.  The study recommends that insurance intermediation relate to capital formation in Nigeria. The authority should create a complain annex where products can reach large population in Nigeria, Proper awareness and sensitization exercise should be embarked upon to enlighten the entire public on the significance of insurance policies on capital formation to encourage insurance product innovation and penetration.