Bermuda life reinsurer Scottish Re Group Ltd. has announced net income of $176.9 million for the second quarter on the back of a strong market recovery that boosted asset values.

The profit broke down to 81 cents per share and compared to a loss of $466 million, or $6.81 per share, for the same period the previous year.

The company said the the gains were driven by net realised and unrealised gains of $133.1 million resulting from an overall market recovery of fixed maturity investments.

The results were also impacted from an additional $59.8 million gain associated with the sale, in the first quarter of 2009, of a block of individual life reinsurance business, acquired by the company from ING, to Hannover Re.

An additional $1.4 million gain, resulting from the sale, may be recognized in the second half of 2009 if additional contingencies are satisfied, Scottish Re said.

Scottish Re is in run off, which means it has ceased to write new business, but continues to operate to meet its obligations.