The life industry returned to profitability in the year to June 30 with a net profit of $1 billion, rebounding from a $1.7 billion loss in the prior corresponding period, according to the latest update from the Australian Prudential Regulation Authority (APRA).

The results were driven by improved investment returns as risk products remain in the red, although their combined losses have narrowed significantly.

Investment revenue reached $6.3 billion, compared with a $900 million deficit from a year earlier.

Risk products made a net loss of $18.8 million during the period, significantly smaller than the $1.46 billion they lost a year earlier.

Individual lump sum is the only line that made a profit, at $403.1 million, while the other three products remain a drag on earnings.

Individual disability income insurance (DII) lost $345.5 million (versus a $1.28 billion loss a year earlier), group lump sum $70.6 million ($352.9 million loss a year earlier) and group disability income insurance $5.9 million ($249.1 million loss a year earlier).

However, for the June quarter, the four risk products made a combined net profit of $168.7 million. Individual DII was the only money-losing product, with a net loss of $161 million.

Individual lump sum made $278 million net profit during the quarter, group lump sum $24.7 million and group disability income insurance $27 million.