Ivy Variable Insurance Portfolios N-CSRCertified annual shareholder report (management investment company)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-5017

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Ivy Variable Insurance Portfolios

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(Exact name of registrant as specified in charter)

100 Independence, 610 Market Street, Philadelphia, PA 19106-2354

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(Address of principal executive offices) (Zip code)

David F. Connor

100 Independence, 610 Market Street

Philadelphia, PA 19106-2354

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(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 523-1918

Date of fiscal year end: December 31

Date of reporting period: December 31, 2021

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ITEM 1.  REPORTS TO STOCKHOLDERS.

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IVY INVESTMENTS^® refers to the investment management and investment advisory services offered by Macquarie Investment Management Business Trust (MIMBT) through its various series.

On December 2, 2020, Waddell & Reed Financial, Inc. (“WDR”), the parent company of Ivy Investment Management Company, the investment adviser of the Ivy Variable Insurance Portfolios (the “VIP Portfolios”), and Macquarie Management Holdings, Inc., the U.S. holding company for Macquarie Group Limited’s U.S. asset management business (“Macquarie”), announced that they had entered into an agreement whereby Macquarie would acquire the investment management business of WDR (the “Transaction”).

The Transaction closed on April 30, 2021. The VIP Portfolios, as part of Delaware Funds by Macquarie, are now managed by Delaware Management Company, a series of Macquarie Investment Management Business Trust, and distributed by Delaware Distributors, L.P.

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Macquarie Investment Management (MIM) is a global asset manager with offices in the United States, Europe, Asia, and Australia. As active managers, we prioritize autonomy and accountability at the investment team level in pursuit of opportunities that matter for clients. Delaware Funds is one of the longest-standing mutual fund families, with more than 80 years in existence.

If you are interested in learning more about creating an investment plan, contact your financial advisor.

You can learn more about Delaware Funds or obtain a prospectus at www.ivyinvestments.com/reports/vip.

To view your shareholder statement online, go to www.ivyinvestments.com, log in to your account, and select “Statements,” or to view a mutual fund fee and expense calculator, visit https://tools.finra.org/fund_analyzer/.

Macquarie Asset Management (MAM) offers a diverse range of products including securities investment management, infrastructure and real asset management, and fund and equity-based structured products. MIM is the marketing name for certain companies comprising the asset management division of Macquarie Group. This includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.

The Portfolios are distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.

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None of the entities noted in this document is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and the obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (Macquarie Bank). Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these entities. In addition, if this document relates to an investment (a) each investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group company guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.

The Portfolios are governed by US laws and regulations. Unless otherwise noted, views expressed herein are current as of December 31, 2021, and subject to change for events occurring after such date. The Portfolios are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.

Advisory services provided by Delaware Management Company, a series of MIMBT, a US registered investment advisor. All third-party marks cited are the property of their respective owners.

^© 2022 Macquarie Management Holdings, Inc.

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(UNAUDITED)

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(UNAUDITED)

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The above illustrations are based on ongoing costs only.

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(UNAUDITED)

On September 13, 2021, the Board of Trustees (Board) of the Ivy Variable Insurance Portfolios approved the appointment of Macquarie Investment Management Austria Kapitalanlage AG portfolio managers Stefan Löwenthal and Jürgen Wurzer and Aaron D. Young of Delaware Management Company (DMC) to join F. Chace Brundige of DMC as portfolio managers for the Portfolio. In connection with this change, the Board approved applicable revisions to the Portfolio’s investment strategies. All changes took effect on November 15, 2021

Below, F. Chace Brundige, Stefan Löwenthal, Jürgen Wurzer and Aaron Young, portfolio managers of Delaware Ivy VIP Asset Strategy, discuss positioning, performance and results for the fiscal year ended December 31, 2021.

Fiscal Year Performance

Please note that the Portfolio returns include applicable investment fees and expense, whereas the index returns do not include any such fees. Also, the Portfolio’s performance data does not take into account any product expenses or charges associated with owning a variable life or annuity policy, which is invested in Ivy Variable Insurance Portfolios.

Risks abound, but the market shrugs

Nearly two years into one of history’s greatest human and economic shocks, we seem to be nearing the later and hopefully last phases of the COVID-19 pandemic. Yet, we are still faced with risks and lasting changes to the global corporate landscape. Some of these shifts are a direct result of the pandemic (the ultimate impact of hybrid work, sustainability of pandemic beneficiaries and recovery of losers, global travel, the supply chain, disappearance of workers in the consumer service sectors, etc.), while others have been percolating and are an indirect result of the pandemic such as the trajectory of inflation and US Federal Reserve (Fed) policy.

While these risks were well documented, by most accounts, markets were not concerned. Many major global equity indexes ended the year at or near all-time highs, fixed-income spreads remained historically tight, and volatility was generally at low levels. Much of this can be attributed to what has been impressive execution by many companies. Yes, certain service industries (airlines, hotels, restaurants, movie theatres, cruise lines, etc.) have struggled, and autos have been supply chain constrained, but many industries are thriving. Technology continues to proliferate as software companies, media, ecommerce, and semi-conductors have done well. Additionally, health care continues to advance, and industrials have been thriving as building products, machinery, and automation are in high demand. And after years of underinvestment, legacy energy businesses are experiencing a resurgence.

The year was not without challenges. Despite COVID-19 vaccine rollouts, the world was challenged with the Delta variant and the emergence of Omicron as the year ended. Areas of the emerging world were hit particularly hard, specifically India and Brazil, which faced real human crises during the Delta variant wave.

Chinese regulators took markets by surprise as they waged a battle with many of their corporate champions as they look to avoid monopolistic dynamics that could hurt small- and medium-sized businesses and consumers. The regulatory framework is still unclear, and valuations remain compressed. Inflationary pressure grew throughout the year, and the Fed became more hawkish. It appears monetary policy is shifting.

Performance review

The Portfolio posted a return in excess of 10% but underperformed its benchmark index for the fiscal year. The Portfolio had an average of roughly 62% in equities throughout the year, with equity holdings outperforming the global equity index. The strategy is run with a risk-managed approach specific to expected volatility.

Equity performance was primarily driven by stock selection in industrials and communication services, while stock selection in financials detracted from relative performance. From a country standpoint, an underweight to China and stock selection in Japan had an outsized positive impact on performance relative to the index. Conversely, an underweight allocation to the US was negative. On an individual stock basis, the top relative contributors were Intuit, Inc., Gartner Inc.,

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and Seagate Technology. The Portfolio no longer holds Gartner Inc. or Seagate Technology. Intuit has continued to execute as demand for their financial management software benefitted through the pandemic. The company has an aggressive growth strategy and has made some strategic acquisitions to gain additional market share. Gartner, which had been seen as a pandemic loser due to its large conference business, was able to transition to virtual and benefitted from significantly lower costs. Seagate is a US-based computer hardware company with a majority of sales in hard disk drives (HDD). While sales stalled for several years as HDD lost share to solid state drives (SSD), HDD growth has reaccelerated with sales into cloud servers. We thought the stock was relatively cheap and bought it at an attractive entry point.

Detracting from relative performance was Ping An Insurance Group Co. of China Ltd., Sarepta Therapeutics, Inc., and our exclusion of Nvidia Corp. The Portfolio no longer holds Ping An Insurance or Sarepta Therapeutics. Ping An Insurance, a Chinese insurance company, struggled as the pandemic-related border control with Hong Kong weighed on the company’s high-growth life insurance business. Sarepta, a biopharmaceutical company, has historically been volatile. While the company has a substantial revenue stream and promising future, investor sentiment has driven large price swings over the short term. Nvidia, which has a significant presence in the index, was up more than 125% over the course of the fiscal year. We have exposure to semiconductors but did not own Nvidia as we believe the stock carries a significant valuation premium that didn’t meet our investment criteria.

The diversification portion of the Portfolio finished the year roughly in-line with investment-grade credit indices. One of the key contributors was Frontier Communications Corp. The bonds, which were opportunistically purchased in a distressed situation were ultimately converted to equity. We continued to own the equities and feel there is significant upside. Other notable areas of fixed income were energy related credits. Gold, which comprises slightly more than 5% of Portfolio assets, finished the fiscal year down 3.8%.

Outlook

As we look ahead to the new fiscal year, we begin to search for more clarity on key issues such as the pandemic, inflation, and central bank policy, and how that will translate to corporate earnings and stock valuations. However, these environments can be particularly fruitful for active managers as overblown stock reactions and volatility may allow investors to capture these opportunities. Our mandate grants us the ability to capitalize on perceived dislocations across various types of businesses. We are hard pressed to make a prediction of how heated inflation will be or when the Fed and other central banks will take action to combat it. In fact, the unpredictability of these risks reiterates our confidence in focusing on stock selection, while neutralizing non-idiosyncratic risks to the extent our investment mandate allows.

We anticipate that certain inflationary pressures will alleviate while others will remain high. However, we are unsure we can handicap those impacts looking out several years. We will keep an eye on inflationary pressures, while gearing our focus on finding opportunities that may drive growth despite outside pressure and where we see perceived significant upside to valuation. One area we believe has opportunity is emerging markets, which was weak through most of 2021. Between harsh and unfortunate COVID-19 waves, particularly in India, Brazil, and South Africa, regulation in China, governmental volatility in Brazil, and the threat of inflation/higher global interest rates, there has been a lot of bad news in emerging markets. As such, we believe it has created an opportunity to invest in strong companies at a discount. We continue to assess the emerging-market landscape.

We believe we could begin to see answers to some of the many question marks hanging over the market. But in the meantime, volatility is creating opportunistic market dislocations and, regardless of what happens through the macro lens, we remain confident in the direction we are taking the Portfolio.

Effective July 1, 2021, the Portfolio name changed from Ivy VIP Asset Strategy.

Significant Event: On December 2, 2020, Waddell & Reed Financial, Inc., the parent company of Ivy Investment Management Company, the investment adviser of the Ivy Variable Insurance Portfolios, and Macquarie Management Holdings, Inc., the US holding company for Macquarie Group Limited’s US asset management business (“Macquarie”), announced that they had entered into an agreement whereby Macquarie would acquire the investment management business of Waddell & Reed Financial, Inc. (the “Transaction”). The Transaction closed on April 30, 2021. The Ivy Variable Insurance Portfolios, as part of Delaware Funds by Macquarie, are now managed by Delaware Management Company and distributed by Delaware Distributors, L.P.

Past performance is not a guarantee of future results. The value of the Portfolio’s shares will change, and you could lose money on your investment.

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Investing involves risk, including the possible loss of principal.

Risk is increased in a concentrated portfolio since it holds a limited number of securities with each investment having a greater effect on the overall performance.

International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue.

Fixed income securities and bond portfolios can lose value, and investors can lose principal as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt. High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult to obtain precise valuations of the high yield securities.

The Portfolio may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivatives transaction depends upon the counterparties’ ability to fulfil their contractual obligations.

Exposure to the commodities markets may subject the Portfolio to greater volatility than investments in traditional securities.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis, and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and can be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Portfolio’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries. These disruptions could prevent the Portfolio from executing advantageous investment decisions in a timely manner and could negatively impact the Portfolio’s ability to achieve its investment objective. Any such event(s) could have a significant adverse impact on the value and risk profile of the Portfolio.

These and other risks are more fully described in the Portfolio’s prospectus.

The opinions expressed in this report are those of the portfolio managers and are current only through the end of the period of the report as stated on the cover. The portfolio managers’ views are subject to change at any time based on market and other conditions, and no forecasts can be guaranteed.

The index noted is unmanaged and include reinvested dividends. One cannot invest directly in an index, nor is an index representative of Delaware Ivy VIP Asset Strategy.

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ALL DATA IS AS OF DECEMBER 31, 2021 (UNAUDITED)

Top 10 Equity Holdings

See your advisor or www.ivyinvestments.com for more information on the Portfolio’s most recently published Top 10 Equity Holdings.

+Cash equivalents are defined as highly liquid securities with maturities of less than three months. Cash equivalents may include U.S. Government Treasury bills, bank certificates of deposit, bankers’ acceptances, corporate commercial paper and other money market instruments.

(a) Effective July 1, 2021, the name of Ivy VIP Asset Strategy changed to Delaware Ivy VIP Asset Strategy.

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(UNAUDITED)

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares. Performance results may include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower.

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DECEMBER 31, 2021

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DECEMBER 31, 2021

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DECEMBER 31, 2021