The 23-year-old scored three goals in 36 Serie A appearances this season and is in Italy’s 23-man World Cup squad.
Insigne has a contract with Napoli until 2018 and the player’s representative admits reaching a deal is unlikely unless the Serie A club no longer view him as a "key player".
“We take into account the praising reports that Wenger has given about the player,” Antonio Ottaiano told Tuttomercatoweb.
“We are honoured that a club like Arsenal could have Lorenzo on their wish list. However, from here to take it to the next level, that is a possible transfer, there is a huge mountain in between named Napoli.
“The club consider him without a shadow of a doubt as one of their key players for their ambitious project.
“Hence, as of today, I don’t see that there can be any further developments unless Arsenal speak to Napoli directly and Napoli change their view on Lorenzo’s role here.”