Modelling the Real Estate Investment Performance of Insurance Companies in Curbing Housing Deficit in Nigeria

To simulate how insurance firms in Nigeria perform while investing in real estate to reduce the country's housing shortage as required by the NHF Act. To conduct this research, 37 insurance firms’ information on yearly gross premiums, annual real estate investment premium, and annual real estate investment returns for the years 2000 to 2019 were used. The research will recommend an appropriate permitted maximum rate of return than the 4% in the Act for insurance firms investing in real estate in Nigeria. Normality test and a Monte Carlo simulation utilising a capitalization model were conducted in this research to validate the performance's results. The distribution is a non-normality distribution. The return rate is within the range of 1.60% to 135.63% and the standard deviation is 11.78. The returns have a 5% chance of being less than N3,810,750 (USD 8.386 million), a 90% chance of being in the range of N3810,750 (USD 8.386 million), and N33,091,020 (USD 72.822 million), and a 5% chance of being more than N33,091,020 (USD 72.822 million). The study recommends a 5.60% maximum allowable return; this would aid in enhancing the NHF Act-mandated real estate investment performance of insurance firms in Nigeria. This study also recommended that a database be created for real estate investments made by insurance companies in Nigeria in order to promote further study on this topic.