American Funds Insurance Series® Annual report for the year ended December 31, 2020 Investing in global companies for the long term American Funds Insurance Series, by Capital Group, is the underlying investment vehicle for many variable annuities and insurance products. For nearly 90 years, Capital Group has invested with a long-term focus based on thorough research and attention to risk. Investing for short periods makes losses more likely. For current information and month-end results, visit capitalgroup.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract. Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Investing in small-capitalization stocks can involve greater risk than is customarily associated with investing in stocks of larger, more established companies. The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. High-yield bonds are subject to greater fluctuations in value and risk of loss of income and principal than investment-grade bonds. Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor’s, Moody’s and/or Fitch as an indication of an issuer’s creditworthiness. Futures may not provide an effective hedge of the underlying securities because changes in the prices of futures may not track those of the securities they are intended to hedge. In addition, the managed risk strategy may not effectively protect the funds from market declines and will limit the funds’ participation in market gains. The use of the managed risk strategy could cause the funds’ returns to lag those of the applicable underlying funds in certain rising market conditions. Refer to the funds’ prospectuses and the Risk Factors section of this report for more information on these and other risks associated with investing in the funds. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. Fellow investors: Contents Global stocks, as measured by the MSCI in December, after COVID-19 cases ACWI (All Country World Index),1,2 rose accelerated in the fall. The Federal 1 Letter to investors 16.25% in the face of a deadly pandemic, Reserve cut rates 150 basis points in 4 Fund reviews boosted by massive government stimulus March, bringing the lower range of its measures and the rapid development of target rate near zero for the first time Investment portfolios coronavirus vaccines. In a year marked by since 2015. 46 Global Growth Fund unprecedented volatility, stocks declined 50 Global Small Capitalization Fund sharply from February to March, followed European stocks declined in local by a remarkable nine-month rally that currency terms as the eurozone economy 57 Growth Fund lifted many market indexes to all-time suffered the effects of government- 63 International Fund highs. Technology stocks led markets imposed lockdowns and a severe 68 New World Fund® higher, gaining more than 40%, followed recession. Italy was struck hard and early closely by consumer discretionary stocks. by COVID-19, which then spread quickly 80 Blue Chip Income and Digitally focused companies prospered as throughout the continent, crippling key Growth Fund millions of homebound customers industries including tourism, banking and 84 Global Growth and Income Fund switched to online services for food, aircraft manufacturing. Overall, the MSCI 1,4 88 Growth-Income Fund entertainment and other basic needs. Europe Index fell 2.21% in local Conversely, energy stocks and travel- currency terms. However, in U.S. dollar 95 International Growth and Income related stocks plummeted as government- terms, the index registered a 5.38% gain Fund imposed lockdowns brought the global as a weak dollar provided a currency 99 Capital Income Builder® economy to a crawl. tailwind to international equity markets. 115 Asset Allocation Fund Elsewhere among developed markets, U.S. equities showed resilience during a the Japanese economy entered its first 148 Global Balanced Fund volatile year that included civil unrest and recession since 2015 as the pandemic 160 Bond Fund a contentious presidential election on top exacerbated a slowdown that began in 180 Capital World Bond Fund® of pandemic-related pressures, ending late 2019. The Summer Olympics in Tokyo the year at all-time highs, with an increase were postponed to 2021, dealing another 200 High-Income Bond Fund of 21.37% recorded by the MSCI USA blow to the economy. The MSCI Japan 218 American Funds Mortgage Fund® Index1,3. Massive stimulus helped calm Index1,5 gained 14.48% over the year. 224 Ultra-Short Bond Fund markets even as government restrictions aimed at curbing the spread of COVID-19 Emerging markets posted solid gains for 226 U.S. Government/AAA-Rated brought segments of the economy to a a second consecutive year, led by China’s Securities Fund near standstill. In March, Congress passed economic rebound and the technology- 233 Managed Risk Growth Fund the $2 trillion CARES Act, which included export-driven economies of Taiwan and 234 Managed Risk International Fund aid for individuals and businesses most South Korea. A weakening U.S. dollar and economically impacted by the pandemic. strengthening prices for industrial metals 235 Managed Risk Blue Chip Income A $900 billion stimulus package followed and oil further boosted gains, which were and Growth Fund 236 Managed Risk Growth-Income All market returns referenced in this report are unmanaged and, therefore, have no expenses. Investors Fund cannot invest directly in an index. Country returns are based on MSCI indexes, which refl ect reinvestment of distributions and dividends net of withholding taxes, except for the MSCI USA Index, which refl ects 238 Managed Risk Asset Allocation dividends gross of withholding taxes. Source: MSCI. Fund 239 Financial statements 1Source: MSCI. 2The MSCI ACWI is a free fl oat-adjusted market capitalization-weighted index that is designed to measure equity market results in the global developed and emerging markets, consisting of more than 40 developed and emerging market country indexes. Results refl ect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. 3The MSCI USA Index is a free fl oat-adjusted, market capitalization-weighted index that is designed to measure the U.S. portion of the world market. Results refl ect dividends gross of withholding taxes. 4MSCI Europe Index is a free fl oat-adjusted market capitalization-weighted index that is designed to measure results of more than 10 developed equity markets in Europe. Results refl ect dividends net of withholding taxes. 5MSCI Japan Index is a free fl oat-adjusted market capitalization-weighted index that is designed to measure the equity market results of Japan. Results refl ect dividends net of withholding taxes. American Funds Insurance Series 1 led by the information technology and potential end to about a decade of dollar our investment approach, which seeks to health care sectors. Overall, the MSCI strength, the euro rose 9.00% against the appropriately balance risk and return. Emerging Markets Investable Market greenback. Late in the year, the British New individual investors attracted by the Index1,6 bounced back from steep losses pound staged a strong rally as Brexit strong recent results of the stock market in early 2020 to finish up 18.39% for the negotiators approved a new trade may be surprised when a patch of year. Being the first country to shut down agreement governing the relationship volatility inevitably recurs — but with our its economy and the first to reopen between the United Kingdom and the long history and investment horizon, we during the pandemic, China led the European Union. will view any such occurrences as global economic rebound after opportunities. quarantine measures there eased. Looking ahead The future path for stocks remains difficult Our time-tested process, based on Government bonds advanced as central to predict, as always. Investors are extensive research, a long-term outlook banks around the world slashed interest currently counting on a strong economic and close attention to valuation, has rates and ramped up stimulus programs recovery as vaccines roll out and reduce served investors well over time, and will in an attempt to counter the damaging the impact of the coronavirus. They are continue. As always, we thank you for your effects of the pandemic. The U.S. Federal also counting on a continuation of continued support of our efforts and we Reserve cut rates to near zero in March, supportive fiscal and monetary policies look forward to reporting to you again in launched an array of emergency lending from the government, with low, six months. programs, and expanded an aggressive accommodative interest rates. We expect asset purchase program. The Bloomberg these assumptions to hold true, and that Sincerely, Barclays U.S. Corporate Investment Grade we will find plenty of attractive securities Index7,8 and the Bloomberg Barclays U.S. in this environment. Digital-enabled Corporate High Yield 2% Issuer Capped business trends have been accelerated Index7,9 gained 9.89% and 7.05%, due to the pandemic, and many respectively. More broadly, the old-technology businesses should Donald D. O’Neal Bloomberg Barclays Global Aggregate improve as the recovery continues, so Co-President Index7,10 was up 9.20%, while the there is much to be excited about. Bloomberg Barclays U.S. Aggregate Index7,11 advanced 7.51%.