Australian life insurers’ stories of increasing sales in a looming recession may be true, but nothing will hide the fact that the collapse of investment markets last year hurt them badly.

The latest Australian Prudential Regulation Authority (APRA) data shows total industry December quarter 2008 net profit after tax at $253 million – down 43.9% from $451 million in the September quarter – which was also down 58.1% from the June quarter’s $604 million.

For investment-linked life insurance in the December quarter, the industry recorded a $17.66 billion loss in net investment revenue on top of a $6.41 billion loss in the September quarter.

This was partially offset by a 34.8% rise in December quarter net premiums at $8.23 billion, compared with $6.11 billion in the September quarter.

For non-investment-linked life insurance, December quarter net premiums, at $3.93 billion, were down 11.9% from $4.46 billion in the September quarter.

Net investment revenue fell sharply in this sector, with a loss of $1.45 billion in the December quarter after a gain of $925 million in the September quarter.