Total U.S. variable annuity sales increased to $42 billion in the first quarter, up 1.7% from the total for the first quarter of 2007.

Researchers at NAVA, Reston, Va., reported those figures in its latest review of VA results.

The net inflow of cash into U.S. VA contracts increased 12%, to $7.2 billion.

Despite the increase in total sales and net cash inflow, the combined assets of U.S. variable annuities fell 0.5%, to $1.4 trillion.

The percentage of VA assets invested in equity options fell to 56% of assets, down from 60%, while the percentage in fixed options held steady at 19%.

The percentage of assets invested in balanced, bond and money market options rose to 25%, from 21%.