The Australian life insurance industry is showing signs of recovery from the global economic malaise with profits rising and total expenses dropping, according to the latest Australian Prudential Regulation Authority (APRA) statistics.

The figures for 12 months ending December 31 show a slight increase in net profit after tax of $2.65 billion compared to $2.54 billion in the previous year – a 4.1% improvement.

This is despite the December quarter figures showing a slight drop in net profit from $658 million in the September 2010 quarter to $640 million and compared to $878 million in the December 2009 quarter.

APRA says total revenue for the sector also dropped from $23.5 billion in 2010 compared to $37.65 million in 2009.

Revenue also dropped from $11.7 billion in the September quarter to $8.7 billion. This compares to $8.2 billion for the December 2009 quarter.

The figures also show total expenses for the sector dropped almost by half during 2010, from $33 billion in 2009 to $19.3 billion.