Stabilisation of investment markets has helped a drastic rebound in life insurance profitability, according to statistics from the Australian Prudential Regulation Authority.

Last year was a bumper one for life insurers as profits climbed 121% to reach $3.15 billion in the 12 months to March 2010.

Total revenue in the life insurance sector topped $48.07 billion – a drastic turnabout from a $22.15 billion loss in 2008 – despite a $2 billion drop in net premiums to $39.92 billion.

Investment returns in 2009 witnessed a $68 billion turnabout from the previous year, when life insurers lost $32.87 billion on investments, including $15.23 billion in lost income.

Risk products produced the most profitable returns for life insurers, pulling in $296 million after tax, including $236 million in individual risk lines.

Annuity products returned total profits of $71 million.