First-quarter sales of variable annuities dropped 27% from a year earlier, to $30.7 billion, Limra International Inc. reported Wednesday.

Savers backed away from investments linked to stocks during the quarter, the trade group said, and insurers raised prices on the retirement products.

Investors have been increasing their holdings in fixed annuities, which offer more protection when markets decline. First-quarter sales of fixed annuities climbed 74%, to $35.6 billion. They outsold variable annuities for two straight quarters for the first time since 1995.

Consumers are "still leery of the volatile stock market and looking for secure, competitive guaranteed rates of return," Joe Montminy, a research director for Limra, said in a press release.

Insurers such as Hartford Financial Services Group Inc. have been charging more for variable annuities after taking losses on the products, which often provide minimum returns even when stocks fall.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.