Morgan Stanley Variable Insurance Fund N-CSRS Certified semi-annual shareholder report (management investment company)

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			811-07607
Morgan Stanley Variable Insurance Fund, Inc.
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York					10036
(Address of principal executive offices)					(Zip code)
John H. Gernon 522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant’s telephone number, including area code:				212-296-0289
Date of fiscal year end:	December 31,
Date of reporting period:		June 30, 2018

Item 1 - Report to Shareholders

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Core Plus Fixed Income Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Expense Example		2
Portfolio of Investments		3
Statement of Assets and Liabilities		13
Statement of Operations		14
Statements of Changes in Net Assets		15
Financial Highlights		16
Notes to Financial Statements		18
Investment Advisory Agreement Approval		29
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Expense Example (unaudited)

Core Plus Fixed Income Portfolio

As a shareholder of the Core Plus Fixed Income Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which may include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Core Plus Fixed Income Portfolio Class I	$	1,000.00	$	985.40	$	1,021.37	$	3.40	$	3.46		0.69	%
Core Plus Fixed Income Portfolio Class II		1,000.00		984.50		1,020.13		4.63		4.71		0.94

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Fixed Income Securities (97.7%)
Agency Adjustable Rate Mortgages (0.3%)
Federal Home Loan Mortgage Corporation, Conventional Pool: 12 Month USD LIBOR + 1.62%, 2.50%, 7/1/45		$382		$386
Federal National Mortgage Association, Conventional Pool: 12 Month USD LIBOR + 1.59%, 2.33%, 12/1/45		159		160
				546
Agency Fixed Rate Mortgages (17.5%)
Federal Home Loan Mortgage Corporation, Gold Pools:
3.00%, 3/1/47		1,739		1,686
3.50%, 1/1/44 - 2/1/45		1,150		1,152
4.00%, 12/1/41 - 10/1/44		1,103		1,130
5.41%, 7/1/37 - 8/1/37		22		24
5.44%, 1/1/37 - 6/1/38		63		67
5.46%, 5/1/37 - 1/1/38		92		98
5.48%, 8/1/37 - 10/1/37		50		53
5.50%, 8/1/37 - 4/1/38		87		93
5.52%, 9/1/37 - 10/1/37		18		19
5.62%, 12/1/36 - 12/1/37		87		94
6.00%, 8/1/37 - 5/1/38		26		28
6.50%, 9/1/32		19		22
7.50%, 5/1/35		43		49
8.00%, 8/1/32		28		32
8.50%, 8/1/31		33		39
Federal National Mortgage Association, Conventional Pools:
3.00%, 5/1/30 - 6/1/47		2,142		2,094
3.50%, 3/1/46 - 3/1/47		2,258		2,254
4.00%, 11/1/41 - 1/1/46		3,030		3,099
4.50%, 8/1/40 - 11/1/44		1,578		1,661
5.00%, 7/1/40		165		177
5.62%, 12/1/36		33		34
6.00%, 12/1/38		550		606
6.50%, 11/1/27 - 10/1/38		29		31
7.00%, 6/1/29 - 2/1/33		38		39
7.50%, 8/1/37		75		88
8.00%, 4/1/33		58		67
8.50%, 10/1/32		58		70
9.50%, 4/1/30		8		9
July TBA: 3.00%, 7/1/33 (a)		1,400		1,392
3.50%, 7/1/48 (a)		9,406		9,363
4.00%, 7/1/48 (a)		2,624		2,675
4.50%, 7/1/48 (a)		810		844
Government National Mortgage Association, July TBA:
4.50%, 7/20/48 (a)		800		832
Various Pools: 3.50%, 11/20/40 - 7/20/46		1,007		1,012
4.00%, 7/15/44		436		448

	Face Amount (000)		Value (000)
5.48%, 9/20/37	$	9	$	10
9.00%, 1/15/25		1		1
				31,392
Asset-Backed Securities (10.7%)
Accredited Mortgage Loan Trust, 1 Month USD LIBOR + 0.60%, 2.69%, 4/25/34 (b)		708		685
American Homes 4 Rent Trust, 6.07%, 10/17/45 (c)		490		537
AMSR Trust, 1 Month USD LIBOR + 1.40%, 3.49%, 11/17/33 (b)(c)		700		702
Bayview Opportunity Master Fund IIIa Trust, 3.35%, 11/28/32 (c)		458		457
Blackbird Capital Aircraft Lease Securitization Ltd., 5.68%, 12/16/41 (c)		456		465
CAM Mortgage Trust, 3.96%, 12/1/65 (c)		500		500
Finance of America Structured Securities Trust, 6.00%, 11/25/27 (b)(c)		860		838
GCAT LLC, 4.09%, 6/26/23 (c)		600		600
GMAT Trust, 4.25%, 9/25/20 (c)		321		324
Invitation Homes Trust, 1 Month USD LIBOR + 4.75%, 6.82%, 8/17/32 (b)(c)		945		948
Labrador Aviation Finance Ltd., 5.68%, 1/15/42 (c)		381		375
METAL LLC, 4.58%, 10/15/42 (c)		611		622
MFA Trust, 3.35%, 11/25/47 (c)		651		648
Nationstar HECM Loan Trust, 3.97%, 9/25/27 (b)(c)		600		601
4.70%, 5/25/27 (c)		800		807
NovaStar Mortgage Funding Trust, 1 Month USD LIBOR + 1.06%, 3.02%, 12/25/33 (b)		432		437
NRZ Excess Spread-Collateralized Notes, 4.37%, 1/25/23 (c)		355		352
4.59%, 2/25/23 (c)		590		587
Oak Hill Advisors Residential Loan Trust, 3.00%, 7/25/57 (c)		556		552
PNMAC GMSR Issuer Trust, 6.09%, 8/25/23 (b)(c)		260		262
Pretium Mortgage Credit Partners I LLC, 3.25%, 8/27/32 - 3/28/57 (c)		1,368		1,361
3.33%, 12/30/32 (b)(c)		564		562
Pretium Mortgage Credit Partners LLC, 4.13%, 8/27/33 (c)		600		600
Progress Residential Trust, 1 Month USD LIBOR + 4.22%, 6.31%, 1/17/34 (b)(c)		600		612
RCO Mortgage LLC, 3.38%, 8/25/22 (c)		476		474

The accompanying notes are an integral part of the financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Asset-Backed Securities (cont'd)
S-Jets Ltd., 7.02%, 8/15/42 (c)	$	896	$	901
Tricon American Homes Trust, 5.10%, 1/17/36 (c)		400		406
5.15%, 9/17/34 (c)		300		304
5.77%, 11/17/33 (c)		460		473
U.S. Residential Opportunity Fund IV Trust, 3.35%, 11/27/37 (c)		393		392
Vantage Data Centers Issuer LLC, 4.07%, 2/16/43 (c)		199		200
VOLT LIV LLC, 3.50%, 2/25/47 (c)		60		60
VOLT LIX LLC, 3.25%, 5/25/47 (c)		252		250
VOLT LXIII LLC, 3.00%, 10/25/47 (c)		537		532
VOLT LXIV LLC, 3.38%, 10/25/47 (c)		585		584
VOLT NPL X LLC, 4.75%, 10/26/54 (c)		7		7
VOLT XL LLC, 4.38%, 11/27/45 (c)		119		120
				19,137
Collateralized Mortgage Obligations — Agency Collateral Series (1.7%)
Federal Home Loan Mortgage Corporation, 4.09%, 10/25/48 (b)(c)		750		720
1 Month USD LIBOR + 4.35%, 6.35%, 12/25/26 (b)(c)		172		174
1 Month USD LIBOR + 5.05%, 7.05%, 7/25/23 (b)		232		242
1 Month USD LIBOR + 5.25%, 7.25%, 7/25/26 (b)(c)		207		217
IO 0.46%, 11/25/27 (b)		13,467		374
0.57%, 8/25/27 (b)		8,391		288
IO REMIC 6.00% – 1 Month USD LIBOR, 3.93%, 11/15/43 - 6/15/44 (b)		2,682		393
6.05% – 1 Month USD LIBOR , 3.98%, 4/15/39 (b)		658		45
IO STRIPS 7.50%, 12/15/29		5		1
Federal National Mortgage Association, IO 6.39% – 1 Month USD LIBOR, 4.43%, 9/25/20 (b)		3,115		174
IO REMIC 6.00%, 5/25/33 - 7/25/33		216		50
IO STRIPS 6.50%, 12/25/29 (b)		1		—	@
7.00%, 11/25/19 (b)		1		—	@
8.00%, 4/25/24		2		—	@
8.00%, 6/25/35 (b)		24		4
9.00%, 11/25/26		1		—	@
REMIC 7.00%, 9/25/32		39		44

	Face Amount (000)		Value (000)
Government National Mortgage Association, IO 0.79%, 8/20/58 (b)	$	5,302	$	121
6.10% – 1 Month USD LIBOR, 4.01%, 7/16/33 (b)		1,042		26
5.00%, 2/16/41		125		30
IO PAC 6.15% – 1 Month USD LIBOR, 4.07%, 10/20/41 (b)		1,651		110
				3,013
Commercial Mortgage-Backed Securities (5.7%)
BAMLL Commercial Mortgage Securities Trust, 1 Month USD LIBOR + 4.00%, 6.53%, 12/15/31 (b)(c)		600		593
BXP Trust, 5.07%, 11/15/34 (b)(c)		650		654
Citigroup Commercial Mortgage Trust, 1 Month USD LIBOR + 2.94%, 5.02%, 9/15/27 (b)(c)		650		643
IO 1.03%, 11/10/48 (b)		2,705		119
1.10%, 9/10/58 (b)		4,714		238
COMM Mortgage Trust, 4.90%, 11/10/46 (b)(c)		985		894
5.29%, 8/10/46 (b)(c)		740		715
IO 0.19%, 7/10/45 (b)		11,012		53
1.08%, 10/10/47 (b)		4,084		127
1.31%, 7/15/47 (b)		3,594		149
GS Mortgage Securities Trust, 4.92%, 8/10/46 (b)(c) 500 479 IO 0.95%, 9/10/47 (b)		5,204		185
1.40%, 10/10/49 (b)		7,316		566
1.50%, 10/10/48 (b)		5,202		368
HMH Trust, 6.29%, 7/5/31 (c)		300		290
InTown Hotel Portfolio Trust, 4.12%, 1/15/33 (b)(c)		346		346
JP Morgan Chase Commercial Mortgage Securities Trust, IO 0.64%, 4/15/46 (b)		6,000		140
0.94%, 12/15/49 (b)		3,213		135
1.24%, 7/15/47 (b)		9,345		317
JPMBB Commercial Mortgage Securities Trust, 4.81%, 4/15/47 (b)(c)		704		624
IO 1.19%, 8/15/47 (b)		4,048		196
UBS Commercial Mortgage Trust, IO 1.23%, 12/15/50 (b)		5,976		441
Wells Fargo Commercial Mortgage Trust, 3.94%, 8/15/50 (c)		295		244
IO 1.39%, 11/15/50 (b)		6,966		608

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Commercial Mortgage-Backed Securities (cont'd)
WFRBS Commercial Mortgage Trust, 3.50%, 8/15/47 (c)	$	900	$	719
4.28%, 5/15/45 (b)(c)		385		353
				10,196
Corporate Bonds (37.9%)
Finance (16.6%)
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.75%, 5/15/19		360		362
4.13%, 7/3/23		425		423
Alexandria Real Estate Equities, Inc. 3.95%, 1/15/27		175		169
American International Group, Inc., 4.50%, 7/16/44		300		280
4.88%, 6/1/22		275		288
AvalonBay Communities, Inc., Series G 2.95%, 5/11/26		375		351
Bank of America Corp., 3.97%, 3/5/29		375		370
4.24%, 4/24/38		250		243
6.11%, 1/29/37		100		115
MTN 4.00%, 1/22/25		1,085		1,072
Bank of Montreal 3.80%, 12/15/32		450		417
Bank of New York Mellon Corp. (The), MTN 3.65%, 2/4/24		350		352
BNP Paribas SA 5.00%, 1/15/21		150		156
Boston Properties LP 3.80%, 2/1/24		145		144
BPCE SA 5.15%, 7/21/24 (c)		550		558
Brighthouse Financial, Inc., Series WI 3.70%, 6/22/27		625		556
Brookfield Finance LLC 4.00%, 4/1/24		525		520
Capital One Bank USA NA 3.38%, 2/15/23		510		497
Capital One Financial Corp. 3.30%, 10/30/24		450		428
Cigna Corp. 3.88%, 10/15/47		300		256
Citigroup, Inc., 3.89%, 1/10/28		300		291
4.45%, 9/29/27		175		172
5.50%, 9/13/25		250		266
6.68%, 9/13/43		100		121
Citizens Bank NA, MTN 2.55%, 5/13/21		250		244
Colony Capital, Inc. 5.00%, 4/15/23		275		262

	Face Amount (000)		Value (000)
Compass Bank 3.50%, 6/11/21	$	425	$	425
Cooperatieve Rabobank UA, 3.88%, 2/8/22		25		25
3.95%, 11/9/22		625		620
Credit Agricole SA, 3.75%, 4/24/23 (c)		400		392
3.88%, 4/15/24 (c)		500		500
Credit Suisse Group AG 3.57%, 1/9/23 (c)		275		270
Credit Suisse Group Funding Guernsey Ltd. 4.55%, 4/17/26		600		601
Deutsche Bank AG, 2.70%, 7/13/20		425		414
3.95%, 2/27/23		425		409
Discover Bank 7.00%, 4/15/20		320		338
Discover Financial Services 3.95%, 11/6/24		275		269
Extra Space Storage LP 3.13%, 10/1/35 (c)		250		291
Federal Realty Investment Trust 3.63%, 8/1/46		250		218
Five Corners Funding Trust 4.42%, 11/15/23 (c)		275		283
GE Capital International Funding Co., Unlimited Co. 2.34%, 11/15/20		468		458
Goldman Sachs Group, Inc. (The), 6.75%, 10/1/37		435		517
MTN 4.80%, 7/8/44		175		174
Guardian Life Insurance Co. of America (The) 4.85%, 1/24/77 (c)		325		318
Hartford Financial Services Group, Inc. (The) 5.50%, 3/30/20		365		379
Healthcare Trust of America Holdings LP 3.70%, 4/15/23		325		320
HSBC Holdings PLC 4.25%, 3/14/24		750		747
HSBC USA, Inc. 3.50%, 6/23/24		250		245
Humana, Inc. 3.95%, 3/15/27		225		222
ING Bank N.V. 5.80%, 9/25/23 (c)		520		552
ING Groep N.V. 6.00%, 4/16/20 (b)(d)		200		200
Intesa Sanpaolo SpA 5.25%, 1/12/24		300		293
iStar, Inc. 5.25%, 9/15/22		175		170
Jefferies Finance LLC/JFIN Co-Issuer Corp. 7.38%, 4/1/20 (c)		295		298
JPMorgan Chase & Co., 3.90%, 1/23/49		500		450
4.13%, 12/15/26		550		544
LeasePlan Corp. N.V. 2.88%, 1/22/19 (c)		475		474

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Finance (cont'd)
Liberty Mutual Group, Inc. 4.85%, 8/1/44 (c)	$	125	$	125
Lloyds Banking Group PLC 3.75%, 1/11/27		400		379
Macquarie Bank Ltd. 6.63%, 4/7/21 (c)		260		279
MetLife, Inc. 5.70%, 6/15/35		150		171
MPT Operating Partnership LP/ MPT Finance Corp. 5.00%, 10/15/27		175		168
Nationwide Building Society, 3.90%, 7/21/25 (c)		200		198
4.30%, 3/8/29 (c)(e)		375		362
Prologis LP 3.88%, 9/15/28		325		326
Realty Income Corp., 3.25%, 10/15/22		350		345
3.65%, 1/15/28		325		312
Royal Bank of Scotland Group PLC 3.88%, 9/12/23		625		608
Santander UK Group Holdings PLC 3.57%, 1/10/23		900		875
Spirit Realty Capital, Inc. 3.75%, 5/15/21		175		176
Standard Chartered PLC 3.05%, 1/15/21 (c)		375		370
Synchrony Bank 3.65%, 5/24/21		250		250
Synchrony Financial 3.70%, 8/4/26		250		230
Syngenta Finance N.V. 4.89%, 4/24/25 (c)		550		540
TD Ameritrade Holding Corp. 3.63%, 4/1/25		475		470
Travelers Cos., Inc. (The) 3.75%, 5/15/46		200		184
UBS Group Funding Switzerland AG 2.95%, 9/24/20 (c)		525		520
UnitedHealth Group, Inc., 2.88%, 3/15/23		750		731
3.75%, 7/15/25		300		300
WEA Finance LLC/Westfield UK & Europe Finance PLC 3.25%, 10/5/20 (c)		450		449
Wells Fargo & Co., 3.00%, 10/23/26		800		740
5.61%, 1/15/44		250		270
				29,707
Industrials (19.5%)
Abbott Laboratories 3.75%, 11/30/26		575		566
Air Liquide Finance SA 1.75%, 9/27/21 (c)		225		214
Amazon.com, Inc. 2.80%, 8/22/24		825		796
Andeavor Logistics LP/Tesoro Logistics Finance Corp. 5.20%, 12/1/47		250		242

	Face Amount (000)		Value (000)
Anheuser-Busch InBev Finance, Inc., 3.65%, 2/1/26	$	350	$	343
4.90%, 2/1/46		425		439
Apple, Inc., 2.45%, 8/4/26		400		368
3.85%, 8/4/46		125		118
4.45%, 5/6/44		250		262
AT&T, Inc., 4.25%, 3/1/27		675		662
4.90%, 8/15/37 (c)		225		214
5.15%, 2/15/50 (c)		175		164
Baidu, Inc. 2.75%, 6/9/19		450		448
Bayer US Finance II LLC 4.38%, 12/15/28 (c)		300		301
Becton Dickinson and Co. 2.89%, 6/6/22		425		411
Biogen, Inc. 5.20%, 9/15/45		300		320
Booking Holdings, Inc. 0.90%, 9/15/21 (e)		175		209
BP Capital Markets PLC, 3.12%, 5/4/26		375		359
3.25%, 5/6/22		425		424
Cenovus Energy, Inc. 4.25%, 4/15/27 (e)		350		338
Charter Communications Operating LLC/ Charter Communications Operating Capital, 4.20%, 3/15/28 (e)		525		492
4.91%, 7/23/25		175		177
6.48%, 10/23/45		350		370
CNH Industrial Capital LLC 4.38%, 11/6/20		300		305
CNOOC Finance 2013 Ltd. 3.00%, 5/9/23		420		406
Columbia Pipeline Group, Inc. 4.50%, 6/1/25		375		375
Comcast Corp. 3.55%, 5/1/28 (e)		350		335
Concho Resources, Inc. 4.85%, 8/15/48 (f)		300		305
Crown Castle International Corp., 3.80%, 2/15/28		600		564
5.25%, 1/15/23		5		5
CSC Holdings LLC 5.50%, 4/15/27 (c)		250		239
CVS Health Corp. 4.30%, 3/25/28		550		544
Daimler Finance North America LLC 2.25%, 7/31/19 (c)(e)		465		461
Darden Restaurants, Inc. 3.85%, 5/1/27 (e)		325		315
Dell International LLC/EMC Corp. 6.02%, 6/15/26 (c)		175		184
Delta Air Lines, Inc. 2.88%, 3/13/20		300		298

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Industrials (cont'd)
Deutsche Post AG, Series DPW 0.05%, 6/30/25	$	200	$	228
Deutsche Telekom International Finance BV 3.60%, 1/19/27 (c)		300		283
Discovery Communications LLC 3.95%, 3/20/28		250		237
Dollar General Corp. 3.25%, 4/15/23		300		295
Dollar Tree, Inc., 3.70%, 5/15/23		250		248
4.20%, 5/15/28		100		97
Eldorado Gold Corp. 6.13%, 12/15/20 (c)		295		285
Enable Midstream Partners LP 3.90%, 5/15/24		250		240
Energy Transfer Equity LP 5.50%, 6/1/27		350		351
Energy Transfer Partners LP, 5.15%, 3/15/45		250		224
5.30%, 4/15/47		125		115
Express Scripts Holding Co., 4.50%, 2/25/26 (e)		275		273
4.80%, 7/15/46 (e)		225		215
Exxon Mobil Corp. 4.11%, 3/1/46		325		332
Ford Motor Credit Co., LLC 3.20%, 1/15/21		200		198
General Motors Co. 6.60%, 4/1/36		125		136
Goldcorp, Inc. 3.70%, 3/15/23		436		430
Halliburton Co. 5.00%, 11/15/45		275		294
HCA, Inc. 4.75%, 5/1/23		190		190
Heathrow Funding Ltd. 4.88%, 7/15/23 (c)		435		455
Home Depot, Inc. (The), 4.88%, 2/15/44		175		192
5.88%, 12/16/36		300		365
Illumina, Inc. 0.00%, 6/15/19		207		245
International Paper Co. 3.00%, 2/15/27		500		453
Jaguar Land Rover Automotive PLC 4.50%, 10/1/27 (c)(e)		425		381
Johnson Controls International PLC 3.90%, 2/14/26		350		346
Kraft Heinz Foods Co., 4.38%, 6/1/46		325		282
5.38%, 2/10/20		26		27
Lockheed Martin Corp. 3.10%, 1/15/23		275		272
LyondellBasell Industries N.V. 4.63%, 2/26/55		300		279
Maple Escrow Subsidiary, Inc. 4.60%, 5/25/28 (c)		350		352

	Face Amount (000)		Value (000)
Medtronic, Inc. 4.63%, 3/15/45	$	200	$	212
Microsoft Corp. 3.13%, 11/3/25		350		344
MPLX LP, 4.88%, 6/1/25		175		180
5.20%, 3/1/47		250		249
Newcastle Coal Infrastructure Group Pty Ltd. 4.40%, 9/29/27 (c)		475		439
NOVA Chemicals Corp. 5.25%, 8/1/23 (c)		415		416
Novartis Capital Corp. 4.40%, 5/6/44 (e)		225		240
Nuance Communications, Inc. 1.00%, 12/15/35		275		247
Nucor Corp. 3.95%, 5/1/28		300		300
Nvent Finance Sarl 3.95%, 4/15/23 (c)		450		446
Ooredoo International Finance Ltd. 3.25%, 2/21/23 (c)		350		338
Oracle Corp. 2.95%, 5/15/25		201		192
Philip Morris International, Inc. 2.50%, 8/22/22		190		183
Phillips 66 Partners LP 4.68%, 2/15/45		150		141
QUALCOMM, Inc. 2.10%, 5/20/20		400		400
Resort at Summerlin LP, Series B 13.00%, 12/15/07 (g)(h)(i)(j)(k)		299		—
Rockies Express Pipeline LLC 6.88%, 4/15/40 (c)		150		172
Shell International Finance BV 3.25%, 5/11/25		400		392
Siemens Financieringsmaatschappij N.V. 2.35%, 10/15/26 (c)		525		473
Southern Copper Corp. 5.25%, 11/8/42		350		348
Sprint Spectrum Co., LLC/ Sprint Spectrum Co., II LLC/ Sprint Spectrum Co., III LLC 3.36%, 3/20/23 (c)		862		855
Telefonica Emisiones SAU 4.10%, 3/8/27		550		533
Telenor East Holding II AS, Series VIP 0.25%, 9/20/19		200		193
Teva Pharmaceutical Finance Netherlands III BV, 2.80%, 7/21/23		50		43
6.75%, 3/1/28 (e)		250		255
Thermo Fisher Scientific, Inc. 2.95%, 9/19/26		300		278
Total Capital International SA 2.88%, 2/17/22		50		50
Transurban Finance Co., Pty Ltd. 3.38%, 3/22/27 (c)		325		300
Trimble, Inc. 4.15%, 6/15/23		625		624

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Industrials (cont'd)
Tyson Foods, Inc. 4.88%, 8/15/34	$	250	$	253
Union Pacific Corp. 3.95%, 9/10/28 (e)		165		166
United Airlines Pass-Through Trust, Series A 4.00%, 10/11/27		500		502
United Technologies Corp. 4.50%, 6/1/42		100		99
Verint Systems, Inc. 1.50%, 6/1/21		200		197
Verizon Communications, Inc., 4.13%, 3/16/27		475		471
4.67%, 3/15/55		252		225
Viavi Solutions, Inc. 0.63%, 8/15/33 (e)		175		177
Vodafone Group PLC 4.38%, 5/30/28		425		421
Volkswagen Group of America Finance LLC 2.40%, 5/22/20 (c)		525		517
Walmart, Inc., 3.63%, 12/15/47 (e)		100		93
3.70%, 6/26/28		475		480
Warner Media LLC 3.80%, 2/15/27		275		260
Woodside Finance Ltd. 3.70%, 9/15/26 (c)		500		481
Wyndham Destinations, Inc. 4.15%, 4/1/24 (e)		500		494
Zillow Group, Inc. 2.00%, 12/1/21		200		254
				34,826
Utilities (1.8%)
CMS Energy Corp. 5.05%, 3/15/22		50		52
Duke Energy Corp. 2.65%, 9/1/26		400		361
Enel Chile SA 4.88%, 6/12/28		175		177
Enel Finance International N.V. 3.63%, 5/25/27 (c)		275		252
Entergy Louisiana LLC 3.05%, 6/1/31		400		368
ITC Holdings Corp. 3.35%, 11/15/27		450		423
Mississippi Power Co. 3.95%, 3/30/28		500		496
NRG Energy, Inc. 6.63%, 1/15/27		185		191
Southern Power Co., Series D 1.95%, 12/15/19		375		369
Trans-Allegheny Interstate Line Co. 3.85%, 6/1/25 (c)		550		549
TransAlta Corp. 4.50%, 11/15/22		47		47
				3,285
				67,818

	Face Amount (000)		Value (000)
Mortgages — Other (12.0%)
Alternative Loan Trust, 1 Month USD LIBOR + 0.18%, 2.27%, 5/25/47 (b)	$	151	$	147
5.50%, 2/25/36		9		8
6.00%, 7/25/37		66		60
PAC 5.50%, 2/25/36		5		4
6.00%, 4/25/36		19		16
Banc of America Alternative Loan Trust, 1 Month USD LIBOR + 0.65%, 2.74%, 7/25/46 (b)		209		159
5.86%, 10/25/36		381		226
6.00%, 4/25/36		72		73
Banc of America Funding Trust, 5.25%, 7/25/37		257		254
6.00%, 7/25/37		25		22
ChaseFlex Trust, 6.00%, 2/25/37		438		325
CSFB Mortgage-Backed Pass-Through Certificates, 6.50%, 11/25/35		866		394
Eurosail PLC, 3 Month GBP LIBOR + 0.95%, 1.58%, 6/13/45 (b)	GBP	420		546
Farringdon Mortgages No. 2 PLC, 3 Month GBP LIBOR + 1.50%, 2.29%, 7/15/47 (b)		246		322
Federal Home Loan Mortgage Corporation, 3.00%, 9/25/45 - 5/25/47	$	1,797		1,731
3.50%, 5/25/45 - 5/25/47		2,295		2,264
3.88%, 5/25/45 (b)(c)		168		164
4.00%, 5/25/45		94		94
4.44%, 4/25/30 (b)		700		717
1 Month USD LIBOR + 3.30%, 5.39%, 10/25/27 (b)		400		447
1 Month USD LIBOR + 3.75%, 5.84%, 9/25/24 (b)		600		685
1 Month USD LIBOR + 4.00%, 6.09%, 8/25/24 (b)		264		288
First Horizon Alternative Mortgage Securities Trust, 6.00%, 8/25/36		12		10
Grifonas Finance PLC, 6 Month EURIBOR + 0.28%, 0.01%, 8/28/39 (b)	EUR	457		479
GSR Mortgage Loan Trust, 5.75%, 1/25/37	$	197		183
HarborView Mortgage Loan Trust, 1 Month USD LIBOR + 0.19%, 2.27%, 1/19/38 (b)		395		389
IM Pastor 3 FTH, 3 Month EURIBOR + 0.14%, 0.00%, 3/22/43 (b)	EUR	537		556
JP Morgan Alternative Loan Trust, 6.00%, 12/25/35 - 8/25/36	$	106		104
JP Morgan Mortgage Trust, 4.03%, 6/25/37 (b)		81		77
6.00%, 6/25/37		90		91

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Mortgages — Other (cont'd)
Lehman Mortgage Trust, 5.50%, 11/25/35 - 2/25/36	$	400	$	399
6.50%, 9/25/37		939		697
Paragon Mortgages No. 13 PLC, 3 Month GBP LIBOR + 0.40%, 1.19%, 1/15/39 (b)	GBP	300		378
Paragon Mortgages No. 15 PLC, 3 Month EURIBOR + 0.54%, 0.22%, 12/15/39 (b)	EUR	500		545
PNMAC GMSR Issuer Trust, 4.94%, 2/25/23 (b)(c)	$	200		202
RALI Trust, 5.50%, 12/25/34		576		561
6.00%, 4/25/36 - 1/25/37		261		235
PAC 6.00%, 4/25/36		19		17
Residential Asset Securitization Trust, 6.00%, 7/25/36		27		24
Seasoned Credit Risk Transfer Trust, 3.00%, 7/25/56 - 11/25/57		2,191		2,109
3.50%, 6/25/57 - 11/25/57		1,199		1,181
4.00%, 7/25/56 - 8/25/56 (b)(c)		700		665
4.50%, 6/25/57		1,758		1,835
4.75%, 7/25/56 - 6/25/57 (b)(c)		650		640
Structured Asset Securities Corp. Reverse Mortgage Loan Trust, 1 Month USD LIBOR + 1.85%, 3.94%, 5/25/47 (b)(c)		771		660
TDA 27 FTA, 3 Month EURIBOR + 0.19%, 0.00%, 12/28/50 (b)	EUR	500		508
				21,491
Municipal Bonds (1.0%)
Chicago O'Hare International Airport, IL, O'Hare International Airport Revenue 6.40%, 1/1/40	$	115		151
City of New York, NY, Series G-1 5.97%, 3/1/36		245		305
Illinois State Toll Highway Authority, IL, Highway Revenue, Build America Bonds 6.18%, 1/1/34		705		882
Municipal Electric Authority of Georgia, GA 6.66%, 4/1/57		434		545
				1,883
Sovereign (9.7%)
Argentine Republic Government International Bond, 7.50%, 4/22/26		834		772
Australia Government Bond, 2.75%, 11/21/27	AUD	1,400		1,048

	Face Amount (000)		Value (000)
Cyprus Government International Bond, 3.88%, 5/6/22	EUR	840	$	1,078
Egypt Government International Bond, 6.59%, 2/21/28 (c)	$	775		714
Export-Import Bank of India, 3.88%, 2/1/28 (c)		945		889
Indonesia Government International Bond, 3.85%, 7/18/27		750		713
Indonesia Treasury Bond, 8.25%, 7/15/21	IDR	17,804,000		1,268
KazMunayGas National Co., JSC, 6.38%, 10/24/48 (c)	$	425		430
Mexican Bonos, Series M 7.50%, 6/3/27	MXN	28,000		1,402
Mexico Government International Bond, 3.60%, 1/30/25 (e)	$	500		484
New Zealand Government Bond, 4.50%, 4/15/27	NZD	1,500		1,163
Perusahaan Listrik Negara PT, 6.15%, 5/21/48 (c)	$	260		262
Petroleos Mexicanos, 6.38%, 1/23/45		375		346
Portugal Obrigacoes do Tesouro OT, 5.65%, 2/15/24 (c)	EUR	1,054		1,560
Republic of Poland Government Bond, 2.25%, 4/25/22	PLN	8,500		2,275
Russian Federal Bond — OFZ, 7.00%, 8/16/23	RUB	73,000		1,149
South Africa Government Bond, 8.00%, 1/31/30	ZAR	15,450		1,029
Ukraine Government International Bond, 7.75%, 9/1/26	$	866		806
				17,388
U.S. Treasury Security (1.2%)
U.S. Treasury Note 2.75%, 2/15/28		2,150		2,132
Total Fixed Income Securities (Cost $176,268)				174,996
	Shares
Short-Term Investments (10.8%)
Securities held as Collateral on Loaned Securities (1.2%)
Investment Company (1.2%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note H) (Cost $2,133)		2,132,625		2,133
Investment Company (9.1%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note H) (Cost $16,330)		16,330,229		16,330

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
U.S. Treasury Security (0.5%)
U.S. Treasury Bill 2.02%, 11/1/18 (l)(m) (Cost $827)	$	833	$	827
Total Short-Term Investments (Cost $19,290)				19,290
Total Investments (108.5%) (Cost $195,558) Including $4,900 of Securities Loaned (n)(o)				194,286
Liabilities in Excess of Other Assets (–8.5%)				(15,238	)
Net Assets (100.0%)			$	179,048

@  Value is less than $500.

(a)  Security is subject to delayed delivery.

(b)  Floating or Variable rate securities: The rates disclosed are as of June 30, 2018. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description in the Portfolio of Investments. Certain variable rate securities may not be based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description in the Portfolio of Investments.

(c)  144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(d)  Perpetual — One or more securities do not have a predetermined maturity date. Rates for these securities are fixed for a period of time, after which they revert to a floating rate. Interest rates in effect are as of June 30, 2018.

(e)  All or a portion of this security was on loan at June 30, 2018.

(f)  When-issued security.

(g)  Security has been deemed illiquid at June 30, 2018.

(h)  Issuer in bankruptcy.

(i)  Acquired through exchange offer.

(j)  Non-income producing security; bond in default.

(k)  At June 30, 2018, the Fund held a fair valued security valued at $0, representing 0.0% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's Directors.

(l)  Rate shown is the yield to maturity at June 30, 2018.

(m)  All or a portion of the security was pledged to cover margin requirements for swap agreements.

(n)  Securities are available for collateral in connection with purchase of when-issued securities, securities purchased on a forward commitment basis, open foreign currency forward exchange contracts, futures contracts and swap agreements.

(o)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $6,154,000 and the aggregate gross unrealized depreciation is approximately $5,281,000, resulting in net unrealized depreciation of approximately $873,000.

EURIBOR  Euro Interbank Offered Rate.

IO  Interest Only.

LIBOR  London Interbank Offered Rate.

MTN  Medium Term Note.

OFZ  Obilgatsyi Federal'novo Zaima (Russian Federal Loan Obligation).

PAC  Planned Amortization Class.

REMIC  Real Estate Mortgage Investment Conduit.

STRIPS  Separate Trading of Registered Interest and Principal of Securities.

TBA  To Be Announced.

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2018:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
Australia and New Zealand Banking Group	AUD	3,821	$	2,951	7/12/18	$	123
Australia and New Zealand Banking Group	GBP	879	$	1,242	7/12/18		82
Australia and New Zealand Banking Group	PLN	1,644	$	455	7/12/18		16
Australia and New Zealand Banking Group	PLN	2,074	$	581	7/12/18		27
Australia and New Zealand Banking Group	$	447	PLN	1,626	7/12/18		(13	)
Australia and New Zealand Banking Group	ZAR	5,272	$	416	7/12/18		33
Bank of America NA	BRL	5,738	$	1,675	7/12/18		196
Bank of America NA	CHF	913	$	946	7/12/18		23
Bank of America NA	IDR	15,120,671	$	1,085	7/12/18		31
Bank of America NA	MXN	16,406	$	878	7/12/18		53
Bank of America NA	MXN	1,062	$	51	7/12/18		(2	)
Bank of America NA	NZD	1,681	$	1,222	7/12/18		83
Bank of America NA	PLN	2,114	$	594	7/12/18		30
Bank of America NA	RUB	45,361	$	736	7/12/18		14
Bank of America NA	$	14	AUD	19	7/12/18		(—	@)
Bank of America NA	$	464	CHF	456	7/12/18		(3	)
Bank of America NA	$	49	EUR	41	7/12/18		(1	)
Bank of America NA	$	2,081	EUR	1,757	7/12/18		(29	)
Bank of America NA	$	469	PLN	1,580	7/12/18		(48	)
Barclays Bank PLC	EUR	104	$	126	7/12/18		5

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

Foreign Currency Forward Exchange Contracts: (cont'd)

Counterparty	Contracts to Deliver (000)			In Exchange For (000)			Delivery Date	Unrealized Appreciation (Depreciation) (000)
Barclays Bank PLC	$	525		MYR	2,078		7/12/18	$	(11	)
Barclays Bank PLC	$	306		MYR	1,221		7/12/18		(3	)
BNP Paribas SA	ARS	9,075		$	381		7/12/18		71
BNP Paribas SA	BRL	1,911		$	517		7/12/18		24
BNP Paribas SA	EUR	104		$	129		7/12/18		7
BNP Paribas SA	EUR	104		$	128		7/12/18		7
BNP Paribas SA	MXN	12,298		$	633		7/12/18		14
BNP Paribas SA	PEN	1,234		$	376		7/12/18		—	@
BNP Paribas SA	$	130		IDR	1,853,928		7/12/18		(—	@)
BNP Paribas SA	$	462		PEN	1,519		7/12/18		—	@
BNP Paribas SA	ZAR	9,848		$	815		7/12/18		98
Goldman Sachs International	EUR	7,595		$	9,426		7/12/18		551
Goldman Sachs International	PLN	1,639		$	446		7/12/18		8
Goldman Sachs International	PLN	2,175		$	613		7/12/18		32
Goldman Sachs International	PLN	2,112		$	589		7/12/18		25
Goldman Sachs International	$	402		BRL	1,483		7/12/18		(20	)
Goldman Sachs International	$	1,567		BRL	5,882		7/12/18		(51	)
Goldman Sachs International	$	458		CHF	457		7/12/18		4
Goldman Sachs International	$	457		JPY	49,724		7/12/18		(8	)
Goldman Sachs International	$	452		MXN	8,776		7/12/18		(10	)
Goldman Sachs International	$	52		MXN	1,062		7/12/18		2
JPMorgan Chase Bank NA	IDR	6,500,000		$	459		7/12/18		5
JPMorgan Chase Bank NA	JPY	753		$	7		7/12/18		—	@
JPMorgan Chase Bank NA	$	431		ARS	9,075		7/12/18		(120	)
JPMorgan Chase Bank NA	$	1,459		EUR	1,247		7/12/18		(2	)
JPMorgan Chase Bank NA	$	182		EUR	156		7/12/18		(—	@)
JPMorgan Chase Bank NA	$	457		PLN	1,671		7/12/18		(11	)
Royal Bank of Canada	$	22		EUR	19		7/12/18		—	@
Royal Bank of Canada	$	—	@	EUR	—	@	7/12/18		—	@
Royal Bank of Canada	$	2		GBP	2		7/12/18		(—	@)
Royal Bank of Canada	$	15		GBP	11		7/12/18		(—	@)
Royal Bank of Canada	$	51		MXN	1,062		7/12/18		2
Royal Bank of Canada	$	8		SEK	66		7/12/18		(1	)
State Street Bank and Trust Co.	PEN	285		$	88		7/12/18		2
UBS AG	GBP	67		$	89		7/12/18		1
UBS AG	MYR	3,701		$	949		7/12/18		33
UBS AG	$	128		EUR	105		7/12/18		(5	)
UBS AG	$	350		EUR	296		7/12/18		(5	)
UBS AG	$	952		NOK	7,400		7/12/18		(43	)
								$	1,216

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

Futures Contracts:

The Fund had the following futures contracts open at June 30, 2018:

	Number of Contracts		Expiration Date	Notional Amount (000)			Value (000)			Unrealized Appreciation (Depreciation) (000)
Long:
Australian 10 yr. Bond		12	Sep-18		1,200		$	1,149		$	15
U.S. Treasury 2 yr. Note		143	Sep-18		28,600			30,291			12
U.S. Treasury 30 yr. Bond		32	Sep-18		3,200			4,640			83
U.S. Treasury 5 yr. Note		27	Sep-18		2,700			3,068			11
U.S. Treasury Ultra Bond		98	Sep-18		9,800			15,637			375
Short:
German Euro Bund		10	Sep-18		(1,000	)		(1,898	)		(28	)
German Euro OAT		10	Sep-18		(1,000	)		(1,805	)		(30	)
U.S. Treasury 10 yr. Note		24	Sep-18		(2,400	)		(2,884	)		(27	)
U.S. Treasury 10 yr. Ultra Long Bond		51	Sep-18		(5,100	)		(6,540	)		(67	)
										$	344

Interest Rate Swap Agreements:

The Fund had the following interest rate swap agreements open at June 30, 2018:

Swap Counterparty	Floating Rate Index	Pay/Receive Floating Rate	Fixed Rate			Payment Frequency Paid/ Received	Maturity Date	Notional Amount (000)		Value (000)			Upfront Payment Paid (000)		Unrealized Appreciation (Depreciation) (000)
Morgan Stanley & Co., LLC*	3 Month LIBOR	Receive		2.26	%	Semi-Annual/Quarterly	12/7/26	$	2,580	$	132		$	—	$	132
Morgan Stanley & Co., LLC*	3 Month LIBOR	Receive		2.48		Semi-Annual/Quarterly	12/21/26		2,602		82			—		82
Morgan Stanley & Co., LLC*	3 Month LIBOR	Receive		3.17		Semi-Annual/Quarterly	5/18/28		828		(17	)		—		(17	)
Morgan Stanley & Co., LLC*	3 Month LIBOR	Receive		2.48		Semi-Annual/Quarterly	5/23/47		2,189		223			—		223
Morgan Stanley & Co., LLC*	3 Month LIBOR	Receive		2.56		Semi-Annual/Quarterly	11/9/47		2,200		188			—		188
Morgan Stanley & Co., LLC*	3 Month LIBOR	Receive		3.19		Semi-Annual/Quarterly	5/18/48		442		(23	)		—		(23	)
										$	585		$	—	$	585

@  Value is less than $500.

*  Cleared swap agreement, the broker is Morgan Stanley & Co., LLC.

LIBOR  London Interbank Offered Rate.

OAT  Obligations Assimilables du Trésor (French Treasury Obligation).

ARS  — Argentine Peso

AUD  — Australian Dollar

BRL  — Brazilian Real

CHF  — Swiss Franc

EUR  — Euro

GBP  — British Pound

IDR  — Indonesian Rupiah

JPY  — Japanese Yen

MXN  — Mexican Peso

MYR  — Malaysian Ringgit

NOK  — Norwegian Krone

NZD  — New Zealand Dollar

PEN  — Peruvian Nuevo Sol

PLN  — Polish Zloty

RUB  — Russian Ruble

SEK  — Swedish Krona

USD  — United States Dollar

ZAR  — South African Rand

Portfolio Composition**

Classification	Percentage of Total Investments
Industrials		18.1	%
Agency Fixed Rate Mortgages		16.3
Finance		15.5
Mortgages — Other		11.2
Asset-Backed Securities		10.0
Sovereign		9.0
Short-Term Investments		8.9
Other***		5.7
Commercial Mortgage-Backed Securities		5.3
Total Investments		100.0	%****

**  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2018.

***  Industries and/or investment types representing less than 5% of total investments.

****  Does not include open long/short futures contracts with a value of approximately $67,912,000 and net unrealized appreciation of approximately $344,000. Does not include open foreign currency forward exchange contracts with net unrealized appreciation of approximately $1,216,000 and does not include open swap agreements with net unrealized appreciation of approximately $585,000.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Core Plus Fixed Income Portfolio

Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $177,095)	$	175,823
Investment in Security of Affiliated Issuer, at Value (Cost $18,463)		18,463
Total Investments in Securities, at Value (Cost $195,558)		194,286
Receivable for Investments Sold		2,317
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		1,602
Interest Receivable		1,272
Receivable for Variation Margin on Futures Contracts		458
Receivable for Fund Shares Sold		117
Receivable from Affiliate		25
Tax Reclaim Receivable		2
Receivable from Securities Lending Income		1
Dividends Receivable		—	@
Other Assets		20
Total Assets		200,100
Liabilities:
Payable for Investments Purchased		17,484
Collateral on Securities Loaned, at Value		2,133
Due to Broker		530
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		386
Payable for Fund Shares Redeemed		195
Payable for Advisory Fees		146
Payable for Servicing Fees		54
Payable for Professional Fees		44
Payable for Distribution Fees — Class II Shares		20
Payable for Administration Fees		12
Payable for Custodian Fees		10
Payable for Directors' Fees and Expenses		4
Payable for Variation Margin on Swap Agreements		4
Payable for Transfer Agency Fees		3
Deferred Capital Gain Country Tax		—	@
Other Liabilities		27
Total Liabilities		21,052
NET ASSETS	$	179,048
Net Assets Consist of:
Paid-in-Capital	$	174,098
Accumulated Undistributed Net Investment Income		6,477
Accumulated Net Realized Loss		(2,393	)
Unrealized Appreciation (Depreciation) on:
Investments (Net of $—@ of Deferred Capital Gain Country Tax)		(1,272	)
Futures Contracts		344
Swap Agreements		585
Foreign Currency Forward Exchange Contracts		1,216
Foreign Currency Translation		(7	)
Net Assets	$	179,048
CLASS I:
Net Assets	$	75,291
Net Asset Value, Offering and Redemption Price Per Share Applicable to 6,958,450 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	10.82
CLASS II:
Net Assets	$	103,757
Net Asset Value, Offering and Redemption Price Per Share Applicable to 9,634,884 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	10.77
(1) Including:
Securities on Loan, at Value:	$	4,900

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Core Plus Fixed Income Portfolio

Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers (Net of $16 of Foreign Taxes Withheld)	$	3,252
Dividends from Security of Affiliated Issuer (Note H)		117
Income from Securities Loaned — Net		11
Total Investment Income		3,380
Expenses:
Advisory Fees (Note B)		343
Distribution Fees — Class II Shares (Note E)		133
Servicing Fees (Note D)		107
Administration Fees (Note C)		73
Professional Fees		73
Pricing Fees		25
Custodian Fees (Note G)		23
Shareholder Reporting Fees		14
Transfer Agency Fees (Note F)		5
Directors' Fees and Expenses		4
Other Expenses		11
Total Expenses		811
Waiver of Advisory Fees (Note B)		(39	)
Rebate from Morgan Stanley Affiliate (Note H)		(13	)
Net Expenses		759
Net Investment Income		2,621
Realized Loss:
Investments Sold		(725	)
Foreign Currency Forward Exchange Contracts		(247	)
Foreign Currency Translation		(19	)
Futures Contracts		(1,113	)
Swap Agreements		(176	)
Net Realized Loss		(2,280	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net Decrease in Deferred Capital Gain Country Tax of $9)		(5,371	)
Foreign Currency Forward Exchange Contracts		1,220
Foreign Currency Translation		(13	)
Futures Contracts		223
Swap Agreements		740
Net Change in Unrealized Appreciation (Depreciation)		(3,201	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(5,481	)
Net Decrease in Net Assets Resulting from Operations	$	(2,860	)

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Core Plus Fixed Income Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	2,621		$	5,540
Net Realized Gain (Loss)		(2,280	)		1,333
Net Change in Unrealized Appreciation (Depreciation)		(3,201	)		4,072
Net Increase (Decrease) in Net Assets Resulting from Operations		(2,860	)		10,945
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(2,535	)
Class II:
Net Investment Income		—			(3,067	)
Total Distributions		—			(5,602	)
Capital Share Transactions:(1)
Class I:
Subscribed		4,837			6,683
Distributions Reinvested		—			2,535
Redeemed		(8,160	)		(14,523	)
Class II:
Subscribed		11,044			24,640
Distributions Reinvested		—			3,067
Redeemed		(17,150	)		(22,893	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(9,429	)		(491	)
Total Increase (Decrease) in Net Assets		(12,289	)		4,852
Net Assets:
Beginning of Period		191,337			186,485
End of Period (Including Accumulated Undistributed Net Investment Income of $6,477 and $3,856)	$	179,048		$	191,337
(1) Capital Share Transactions:
Class I:
Shares Subscribed		447			614
Shares Issued on Distributions Reinvested		—			236
Shares Redeemed		(754	)		(1,337	)
Net Decrease in Class I Shares Outstanding		(307	)		(487	)
Class II:
Shares Subscribed		1,024			2,276
Shares Issued on Distributions Reinvested		—			286
Shares Redeemed		(1,590	)		(2,114	)
Net Increase (Decrease) in Class II Shares Outstanding		(566	)		448

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Core Plus Fixed Income Portfolio

	Class I
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	10.98		$	10.67		$	10.25		$	10.68		$	10.21		$	10.64
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.16			0.34			0.33			0.20			0.30			0.29
Net Realized and Unrealized Gain (Loss)		(0.32	)		0.32			0.30			(0.27	)		0.49			(0.33	)
Total from Investment Operations		(0.16	)		0.66			0.63			(0.07	)		0.79			(0.04	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.35	)		(0.21	)		(0.36	)		(0.32	)		(0.39	)
Net Asset Value, End of Period	$	10.82		$	10.98		$	10.67		$	10.25		$	10.68		$	10.21
Total Return(3)		(1.46	)%(6)		6.24	%		6.11	%(4)		(0.65	)%		7.85	%		(0.32	)%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	75,291		$	79,752		$	82,746		$	88,018		$	100,671		$	105,420
Ratio of Expenses to Average Net Assets(8)		0.69	%(5)(7)		0.68	%(5)		0.61	%(5)		0.69	%(5)		0.65	%(5)		0.69	%(5)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			0.61	%(5)		N/A			0.68	%(5)		N/A
Ratio of Net Investment Income to Average Net Assets(8)		3.01	%(5)(7)		3.10	%(5)		3.06	%(5)		1.89	%(5)		2.83	%(5)		2.75	%(5)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(7)		0.02	%		0.02	%		0.01	%		0.02	%		0.01	%
Portfolio Turnover Rate		102	%(6)		277	%		376	%		400	%		320	%		249	%
(8) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		0.74	%(7)		0.76	%		0.72	%		0.76	%		0.80	%		0.78	%
Net Investment Income to Average Net Assets		2.96	%(7)		3.02	%		2.95	%		1.82	%		2.68	%		2.66	%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses to Average Net Assets would have been 0.07% higher and the Ratio of Net Investment Income to Average Net Assets would have been 0.07% lower had the Custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  Performance was positively impacted by approximately 1.77% due to the receipt of proceeds from the settlement of class action suits involving the Fund's past holdings. These were one-time settlements, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had these settlements not occurred, the total return for Class I shares would have been approximately 4.34%.

(5)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Core Plus Fixed Income Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	10.94		$	10.64		$	10.22		$	10.65		$	10.19		$	10.62
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.15			0.31			0.30			0.17			0.27			0.26
Net Realized and Unrealized Gain (Loss)		(0.32	)		0.31			0.30			(0.26	)		0.49			(0.33	)
Total from Investment Operations		(0.17	)		0.62			0.60			(0.09	)		0.76			(0.07	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.32	)		(0.18	)		(0.34	)		(0.30	)		(0.36	)
Net Asset Value, End of Period	$	10.77		$	10.94		$	10.64		$	10.22		$	10.65		$	10.19
Total Return(3)		(1.55	)%(6)		5.89	%		5.86	%(4)		(0.83	)%		7.57	%		(0.58	)%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	103,757		$	111,585		$	103,739		$	104,736		$	104,837		$	66,560
Ratio of Expenses to Average Net Assets(8)		0.94	%(5)(7)		0.93	%(5)		0.86	%(5)		0.94	%(5)		0.90	%(5)		0.94	%(5)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			0.86	%(5)		N/A			0.93	%(5)		N/A
Ratio of Net Investment Income to Average Net Assets(8)		2.76	%(5)(7)		2.85	%(5)		2.81	%(5)		1.64	%(5)		2.58	%(5)		2.50	%(5)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(7)		0.02	%		0.02	%		0.01	%		0.02	%		0.01	%
Portfolio Turnover Rate		102	%(6)		277	%		376	%		400	%		320	%		249	%
(8) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		0.99	%(7)		1.01	%		0.97	%		1.04	%		1.15	%		1.13	%
Net Investment Income to Average Net Assets		2.71	%(7)		2.77	%		2.70	%		1.54	%		2.33	%		2.31	%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets would have been 0.07% higher and the Ratio of Net Investment Income to Average Net Assets would have been 0.07% lower had the Custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  Performance was positively impacted by approximately 1.77% due to the receipt of proceeds from the settlement of class action suits involving the Portfolio's past holdings. These were one-time settlements, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had these settlements not occurred, the total return for Class II shares would have been approximately 4.09%.

(5)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Core Plus Fixed Income Portfolio. The Fund seeks above-average total return over a market cycle of three to five years by investing primarily in a diversified portfolio of fixed income securities. The Fund offers two classes of shares — Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) Certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (2) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (3) over-the-counter ("OTC") swaps may be valued by an outside pricing service approved by the Directors or quotes from a broker or

dealer. Swaps cleared on a clearinghouse or exchange may be valued using the closing price provided by the clearinghouse or exchange; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular

18

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Fixed Income Securities
Agency Adjustable Rate Mortgages	$	—	$	546	$	—		$	546
Agency Fixed Rate Mortgages		—		31,392		—			31,392
Asset-Backed Securities		—		19,137		—			19,137
Collateralized Mortgage Obligations — Agency Collateral Series		—		3,013		—			3,013
Commercial Mortgage- Backed Securities		—		10,196		—			10,196
Corporate Bonds		—		67,818		—	†		67,818	†
Mortgages — Other		—		21,491		—			21,491
Municipal Bonds		—		1,883		—			1,883
Sovereign		—		17,388		—			17,388
U.S. Treasury Security		—		2,132		—			2,132
Total Fixed Income Securities		—		174,996		—	†		174,996	†
Short-Term Investments
Investment Company		18,463		—		—			18,463
U.S. Treasury Security		—		827		—			827
Total Short-Term Investments		18,463		827		—			19,290

19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)			Total (000)
Foreign Currency Forward Exchange Contracts	$	—		$	1,602		$	—		$	1,602
Futures Contracts		496			—			—			496
Interest Rate Swap Agreements		—			625			—			625
Total Assets		18,959			178,050			—	†		197,009	†
Liabilities:
Foreign Currency Forward Exchange Contracts		—			(386	)		—			(386	)
Futures Contracts		(152	)		—			—			(152	)
Interest Rate Swap Agreements		—			(40	)		—			(40	)
Total Liabilities		(152	)		(426	)		—			(578	)
Total	$	18,807		$	177,624		$	—	†	$	196,431	†

†  Includes one security which is valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, the Fund did not have any investments transfer between investment levels.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Corporate Bond (000)
Beginning Balance	$	—	†
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		—
Realized gains (losses)		—
Ending Balance	$	—	†
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2018	$	—

†  Includes one security which is valued at zero.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from sales and maturities of foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated

20

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio

positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. In addition, the Fund may use cross currency hedging or proxy hedging with respect to currencies in which the Fund has or expects to have portfolio or currency exposure. Cross currency hedges involve the sale of one currency against the positive exposure to a different currency and may be used for hedging purposes or to establish an active exposure to the exchange rate between any two currencies. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with

21

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

Swaps: The Fund may enter into OTC swap contracts or cleared swap transactions. A swap contract is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indices, reference rates, currencies or other instruments. Typically swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). The Fund's obligations or rights under a swap contract entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each party. Cleared swap transactions may help reduce counterparty credit

risk. In a cleared swap, the Fund's ultimate counterparty is a clearinghouse rather than a swap dealer, bank or other financial institution. OTC swap agreements are not entered into or traded on exchanges and often there is no central clearing or guaranty function for OTC swaps. These OTC swaps are often subject to credit risk or the risk of default or non-performance by the counterparty. Both OTC and cleared swaps could result in losses if interest rates, foreign currency exchange rates or other factors are not correctly anticipated by the Fund or if the reference index, security or investments do not perform as expected. During the period swap agreements are open, payments are received from or made to the clearinghouse or counterparty based upon changes in the value of the contract (variation margin). The Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulatory developments require the clearing and exchange-trading of certain standardized swap transactions. Mandatory exchange-trading and clearing is occurring on a phased-in basis.

The Fund's use of swaps during the period included those based on the credit of an underlying security commonly referred to as "credit default swaps." The Fund may be either the buyer or seller in a credit default swap. Where the Fund is the buyer of a credit default swap contract, it would typically be entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the contract only in the event of a default or similar event by the issuer of the debt obligation. If no default occurs, the Fund would have paid to the counterparty a periodic stream of payments over the term of the contract and received no benefit from the contract. When the Fund is the seller of a credit default swap contract, it typically receives the stream of payments but is obligated to pay an amount equal to the par (or other agreed-upon) value of a referenced debt obligation upon the default or similar event by the issuer of the referenced debt obligation. The use of credit default swaps could result in losses to the Fund if the Adviser fails to correctly evaluate the creditworthiness of the issuer of the referenced debt obligation.

If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap agreement and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap agreement less the recovery value of the referenced obligation or underlying securities

22

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

comprising the referenced index. If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap agreement and deliver the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap agreement less the recovery value of the referenced obligation or underlying securities comprising the referenced index. Recovery values are estimated by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specified valuation method, are used to calculate the settlement value. The Fund's maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the swap agreement.

The current credit rating of each individual issuer is included in the table following the Portfolio of Investments and serves as an indicator of the current status of the payment/performance risk of the credit derivative. Alternatively, for credit default swaps on an index of credits, the quoted market prices and current values serve as an indicator of the current status of the payment/performance risk of the credit derivative. Generally, lower credit ratings and increasing market values, in absolute terms, represent a deterioration of the credit and a greater likelihood of an adverse credit event of the issuer.

When the Fund has an unrealized loss on a swap agreement, the Fund has instructed the custodian to pledge cash or liquid securities as collateral with a value approximately equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate. If applicable, cash collateral is included with "Due from (to) Broker" in the Statement of Assets and Liabilities.

Upfront payments paid or received by the Fund will be reflected as an asset or liability, respectively, in the Statement of Assets and Liabilities.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments

are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2018:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Appreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	1,602
Futures Contracts	Variation Margin on Futures Contracts	Interest Rate Risk		496	(a)
Swap Agreements	Variation Margin on Swap Agreements	Interest Rate Risk		625	(a)
Total			$	2,723
	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Depreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	(386	)
Futures Contracts	Variation Margin on Futures Contracts	Interest Rate Risk		(152	)(a)
Swap Agreements	Variation Margin on Swap Agreements	Interest Rate Risk		(40	)(a)
Total			$	(578	)

(a)  This amount represents the cumulative appreciation (depreciation) as reported in the Portfolio of Investments. The Statement of Assets and Liabilities only reflects the current day's net variation margin.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2018 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(247	)
Interest Rate Risk	Futures Contracts		(1,113	)
Credit Risk	Swap Agreements		(144	)
Interest Rate Risk	Swap Agreements		(32	)
Total		$	(1,536	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	1,220
Interest Rate Risk	Futures Contracts		223
Credit Risk	Swap Agreements		201
Interest Rate Risk	Swap Agreements		539
Total		$	2,183

23

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

At June 30, 2018, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(b)	Assets(c) (000)		Liabilities(c) (000)
Foreign Currency Forward Exchange Contracts	$	1,602	$	(386	)

(b)  Excludes exchange traded derivatives.

(c)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Received (000)			Net Amount (not less than $0) (000)
Australia and New Zealand Banking Group	$	281		$	(13	)	$	—		$	268
Bank of America NA		430			(83	)		—			347
Barclays Bank PLC		5			(5	)		—			0
BNP Paribas SA		221			(—	@)		—			221
Goldman Sachs International		622			(89	)		(530	)		3
JPMorgan Chase Bank NA		5			(5	)		—			0
Royal Bank of Canada		2			(1	)		—			1
State Street Bank and Trust Co.		2			—			—			2
UBS AG		34			(34	)		—			0
Total	$	1,602		$	(230	)	$	(530	)	$	842
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Pledged (000)			Net Amount (not less than $0) (000)
Australia and New Zealand Banking Group	$	13		$	(13	)	$	—		$	0
Bank of America NA		83			(83	)		—			0
Barclays Bank PLC		14			(5	)		—			9
BNP Paribas SA		—	@		(—	@)		—			0
Goldman Sachs International		89			(89	)		—			0
JPMorgan Chase Bank NA		133			(5	)		—			128
Royal Bank of Canada		1			(1	)		—			0
UBS AG		53			(34	)		—			19
Total	$	386		$	(230	)	$	—		$	156

@  Amount is less than $500.

24

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

For the six months ended June 30, 2018, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	31,213,000
Futures Contracts:
Average monthly original value	$	60,801,000
Swap Agreements:
Average monthly notional amount	$	11,188,000

5.  When-Issued/Delayed Delivery Securities: The Fund purchases and sells when-issued and delayed delivery securities. Securities purchased on a when-issued or delayed delivery basis are purchased for delivery beyond the normal settlement date at a stated price and yield, and no income accrues to the Fund on such securities prior to delivery date. Payment and delivery for when-issued and delayed delivery securities can take place a month or more after the date of the transaction. When the Fund enters into a purchase transaction on a when-issued or delayed delivery basis, securities are available for collateral in an amount at least equal in value to the Fund's commitments to purchase such securities. Purchasing securities on a when-issued or delayed delivery basis may involve a risk that the market price at the time of delivery may be lower than the agreed upon purchase price, in which case there could be an unrealized loss at the time of delivery. Purchasing investments on a when-issued or delayed delivery basis may be considered a form of leverage which may increase the impact that gains (losses) may have on the Fund.

6.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of

Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	4,900	(d)	$	—	$	(4,900	)(e)(f)	$	0

(d)  Represents market value of loaned securities at period end.

(e)  The Fund received cash collateral of approximately $2,133,000, which was subsequently invested in Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $2,868,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(f)  The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2018:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Corporate Bonds	$	2,133	$	—	$	—	$	—	$	2,133
Total Borrowings	$	2,133	$	—	$	—	$	—	$	2,133
Gross amount of recognized liabilities for securities lending transactions									$	2,133

25

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

7.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Fund holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Fund to further risk of loss in the event of a failure to complete the transaction by the counterparty.

9.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.375	%		0.30	%

For the six months ended June 30, 2018, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.32% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.70% for Class I shares and 0.95% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2018, approximately $39,000 of advisory fees were waived pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares.

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other

26

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $35,992,000 and $191,746,000, respectively. For the six months ended June 30, 2018, purchases and sales of long-term U.S. Government securities were approximately $148,255,000 and $6,288,000, respectively.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by approximately $13,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	19,488	$	34,097	$	35,122	$	117

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	18,463

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director

generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	5,602	$	—	$	3,385	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

27

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, swap transactions, paydown adjustments and an expired capital loss carryforward, resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Undistributed Net Investment Income (000)			Accumulated Net Realized Loss (000)		Paid-in- Capital (000)
$	(1,232	)	$	30,163	$	(28,931	)

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	4,326	$	—

During the year ended December 31, 2017, capital loss carryforwards of approximately $28,930,000 expired for federal income tax purposes.

In addition, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $2,804,000 during the year ended December 31, 2017.

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 65.6%.

L. Accounting Pronouncement: In March 2017, FASB issued an Accounting Standard Update, ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities (the "ASU") which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The ASU does not require any accounting change

for debt securities held at a discount; the discount continues to be accreted to maturity. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. At this time, management is evaluating the implications of these changes on the financial statements.

28

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee was lower than its peer group average and the Fund's total expense ratio was higher than but close to its peer group average. After discussion, the Board concluded that the Fund's (i) performance was competitive with its peer group average and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

29

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited) (cont'd)

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

30

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
30 Rockefeller Plaza
New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFCPFISAN
2191001 EXP. 08.31.19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Emerging Markets Debt Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Expense Example		2
Portfolio of Investments		3
Statement of Assets and Liabilities		8
Statement of Operations		9
Statements of Changes in Net Assets		10
Financial Highlights		11
Notes to Financial Statements		13
Investment Advisory Agreement Approval		22
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Expense Example (unaudited)

Emerging Markets Debt Portfolio

As a shareholder of the Emerging Markets Debt Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which may include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Debt Portfolio Class I	$	1,000.00	$	933.20	$	1,019.34	$	5.27	$	5.51		1.10	%
Emerging Markets Debt Portfolio Class II		1,000.00		933.90		1,019.09		5.51		5.76		1.15

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments

Emerging Markets Debt Portfolio

	Face Amount (000)		Value (000)
Fixed Income Securities (95.5%)
Angola (0.8%)
Sovereign (0.8%)
Angolan Government International Bond, 9.38%, 5/8/48 (a)	$	1,690	$	1,711
Argentina (7.2%)
Corporate Bonds (4.3%)
Province of Santa Fe, 6.90%, 11/1/27 (a)		1,210		1,014
Provincia de Buenos Aires, BADLAR + 3.75%, 30.66%, 4/12/25 (b)	ARS	22,350		604
BADLAR + 3.83%, 35.19%, 5/31/22 (b)		19,454		567
Provincia de Cordoba, 7.45%, 9/1/24 (a)	$	1,100		991
Provincia de Entre Rios Argentina, 8.75%, 2/8/25 (a)		2,220		1,954
Provincia de Mendoza Argentina, BADLAR + 4.38%, 36.06%, 6/9/21 (b)	ARS	17,180		514
Provincia de Rio Negro, 7.75%, 12/7/25 (a)	$	600		470
Provincia del Chaco Argentina, 9.38%, 8/18/24 (a)		2,370		1,997
YPF SA, 8.50%, 7/28/25		1,160		1,109
				9,220
Sovereign (2.9%)
Argentine Republic Government International Bond, 6.88%, 1/26/27 - 1/11/48		4,010		3,281
7.13%, 7/6/36		720		581
7.13%, 6/28/17 (c)		1,000		765
7.50%, 4/22/26		580		537
Republic of Argentina, 2.50%, 12/31/38 (d)		1,850		1,056
				6,220
				15,440
Bahrain (0.3%)
Sovereign (0.3%)
Bahrain Government International Bond, 7.00%, 10/12/28		630		566
Belarus (0.4%)
Sovereign (0.4%)
Republic of Belarus International Bond, 6.20%, 2/28/30 (a)		920		872
Brazil (5.1%)
Corporate Bonds (1.9%)
Minerva Luxembourg SA, 5.88%, 1/19/28 (a)		1,430		1,254
8.75%, 4/3/19 (a)(e)		1,400		1,417
Petrobras Global Finance BV, 6.13%, 1/17/22		218		222
Rumo Luxembourg Sarl, 7.38%, 2/9/24		1,110		1,124
				4,017

	Face Amount (000)		Value (000)
Sovereign (3.2%)
Brazilian Government International Bond, 5.00%, 1/27/45	$	3,309	$	2,627
6.00%, 4/7/26		4,100		4,201
				6,828
				10,845
Chile (1.4%)
Corporate Bonds (1.0%)
Colbun SA, 4.50%, 7/10/24 (a)		1,030		1,029
Geopark Ltd., 6.50%, 9/21/24 (a)		890		858
Latam Finance Ltd., 6.88%, 4/11/24 (a)		340		334
				2,221
Sovereign (0.4%)
Empresa Nacional del Petroleo, 4.75%, 12/6/21		761		775
				2,996
China (3.7%)
Sovereign (3.7%)
Sinopec Group Overseas Development 2013 Ltd., 4.38%, 10/17/23		4,970		5,098
Three Gorges Finance I Cayman Islands Ltd., 2.30%, 6/2/21 (a)		2,090		2,027
3.70%, 6/10/25 (a)		838		820
				7,945
Colombia (2.0%)
Sovereign (2.0%)
Colombia Government International Bond, 4.38%, 7/12/21		530		542
5.00%, 6/15/45		2,350		2,317
11.75%, 2/25/20		1,250		1,425
				4,284
Costa Rica (0.7%)
Sovereign (0.7%)
Costa Rica Government International Bond, 7.16%, 3/12/45		1,500		1,489
Croatia (0.5%)
Sovereign (0.5%)
Croatia Government International Bond, 5.50%, 4/4/23		990		1,043
Dominican Republic (1.2%)
Sovereign (1.2%)
Dominican Republic International Bond, 6.88%, 1/29/26 (a)		1,600		1,699
7.45%, 4/30/44 (a)		739		770
				2,469

The accompanying notes are an integral part of the financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Debt Portfolio

	Face Amount (000)		Value (000)
Ecuador (1.5%)
Sovereign (1.5%)
Ecuador Government International Bond, 8.75%, 6/2/23 (a)	$	1,210	$	1,138
8.88%, 10/23/27 (a)		1,100		976
10.75%, 3/28/22 (a)		1,050		1,082
				3,196
Egypt (2.4%)
Sovereign (2.4%)
Egypt Government International Bond, 4.75%, 4/16/26	EUR	510		549
5.88%, 6/11/25	$	1,000		933
6.13%, 1/31/22 (a)		1,310		1,291
7.50%, 1/31/27 (a)		890		877
7.90%, 2/21/48 (a)		1,560		1,425
				5,075
El Salvador (0.7%)
Sovereign (0.7%)
El Salvador Government International Bond, 6.38%, 1/18/27		721		675
8.63%, 2/28/29 (a)		760		815
				1,490
Gabon (0.3%)
Sovereign (0.3%)
Republic of Gabon, 6.95%, 6/16/25 (a)		610		554
Ghana (1.8%)
Sovereign (1.8%)
Ghana Government International Bond, 8.63%, 6/16/49 (a)		1,460		1,425
10.75%, 10/14/30		2,000		2,436
				3,861
Guatemala (0.4%)
Sovereign (0.4%)
Guatemala Government Bond, 4.50%, 5/3/26 (a)		940		901
Honduras (0.2%)
Sovereign (0.2%)
Honduras Government International Bond, 8.75%, 12/16/20		400		434
Hungary (1.7%)
Sovereign (1.7%)
Hungary Government International Bond, 7.63%, 3/29/41 (c)		2,710		3,713
India (0.3%)
Sovereign (0.3%)
Export-Import Bank of India, 3.38%, 8/5/26 (a)		790		727

	Face Amount (000)		Value (000)
Indonesia (9.0%)
Sovereign (9.0%)
Indonesia Government International Bond, 4.13%, 1/15/25	$	2,950	$	2,903
4.75%, 1/8/26		500		508
4.75%, 1/8/26 (a)		1,430		1,452
4.75%, 7/18/47 (a)(c)		810		766
5.13%, 1/15/45 (a)		1,050		1,034
5.88%, 1/15/24 (a)		460		493
5.88%, 1/15/24		4,250		4,558
5.95%, 1/8/46 (a)		330		363
7.75%, 1/17/38		2,475		3,188
Pertamina Persero PT, 4.88%, 5/3/22		500		509
6.45%, 5/30/44 (a)		1,870		1,960
Perusahaan Listrik Negara PT, 6.15%, 5/21/48 (a)		1,300		1,312
				19,046
Iraq (0.4%)
Sovereign (0.4%)
Iraq International Bond, 6.75%, 3/9/23 (a)		890		857
Jamaica (1.3%)
Corporate Bond (0.2%)
Digicel Ltd., 6.00%, 4/15/21		540		491
Sovereign (1.1%)
Jamaica Government International Bond, 7.63%, 7/9/25 (c)		520		592
7.88%, 7/28/45		520		577
8.00%, 3/15/39		1,010		1,135
				2,304
				2,795
Jordan (0.3%)
Sovereign (0.3%)
Jordan Government International Bond, 7.38%, 10/10/47 (a)		780		718
Kazakhstan (3.3%)
Sovereign (3.3%)
KazAgro National Management Holding JSC, 4.63%, 5/24/23 (a)		1,420		1,370
Kazakhstan Government International Bond, 5.13%, 7/21/25 (a)		2,000		2,112
KazMunayGas National Co., JSC, 6.38%, 10/24/48 (a)		3,420		3,462
				6,944
Kenya (0.3%)
Sovereign (0.3%)
Kenya Government International Bond, 8.25%, 2/28/48 (a)		570		535

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Debt Portfolio

	Face Amount (000)		Value (000)
Mexico (13.5%)
Corporate Bond (0.5%)
Mexichem SAB de CV, 5.50%, 1/15/48 (a)	$	1,240	$	1,085
Sovereign (13.0%)
Banco Nacional de Comercio Exterior SNC, 3.80%, 8/11/26 (a)		2,230		2,151
Mexican Bonos, Series M 10.00%, 12/5/24	MXN	36,620		2,072
Mexico Government International Bond, 3.75%, 1/11/28	$	1,490		1,411
4.15%, 3/28/27		1,398		1,380
4.35%, 1/15/47		1,100		986
4.60%, 1/23/46		2,530		2,334
6.05%, 1/11/40		1,482		1,638
Petroleos Mexicanos, 4.88%, 1/24/22		1,730		1,749
5.63%, 1/23/46		2,200		1,862
6.35%, 2/12/48 (a)		910		826
6.38%, 1/23/45		3,463		3,198
6.50%, 3/13/27 - 6/2/41		4,470		4,394
6.63%, 6/15/38		1,176		1,123
6.75%, 9/21/47		990		936
8.63%, 12/1/23		1,350		1,535
				27,595
				28,680
Mongolia (1.0%)
Sovereign (1.0%)
Mongolia Government International Bond, 8.75%, 3/9/24 (a)		640		688
8.75%, 3/9/24		1,400		1,506
				2,194
Nigeria (1.2%)
Sovereign (1.2%)
Nigeria Government International Bond, 6.38%, 7/12/23		670		663
6.50%, 11/28/27 (a)		920		858
7.14%, 2/23/30 (a)		1,060		1,004
				2,525
Panama (1.5%)
Sovereign (1.5%)
Aeropuerto Internacional de Tocumen SA, 5.63%, 5/18/36 (a)		1,600		1,684
Panama Government International Bond, 4.00%, 9/22/24		294		297
8.88%, 9/30/27		883		1,190
				3,171
Paraguay (1.5%)
Sovereign (1.5%)
Paraguay Government International Bond, 4.63%, 1/25/23 (a)(c)		320		325
4.70%, 3/27/27 (a)		1,160		1,137
6.10%, 8/11/44 (a)		1,580		1,623
				3,085

	Face Amount (000)		Value (000)
Peru (2.6%)
Corporate Bond (0.5%)
Union Andina de Cementos SAA, 5.88%, 10/30/21 (a)(c)	$	1,040	$	1,069
Sovereign (2.1%)
Corporación Financiera de Desarrollo SA, 5.25%, 7/15/29 (a)		1,298		1,291
Peruvian Government International Bond, 6.55%, 3/14/37		1,400		1,753
Petroleos del Peru SA, 4.75%, 6/19/32 (a)(c)		1,490		1,430
				4,474
				5,543
Philippines (2.8%)
Sovereign (2.8%)
Philippine Government International Bond, 3.95%, 1/20/40		1,396		1,338
8.38%, 6/17/19 (c)		146		154
9.50%, 2/2/30		2,981		4,356
				5,848
Poland (1.4%)
Sovereign (1.4%)
Republic of Poland Government International Bond, 3.00%, 3/17/23		2,040		1,996
4.00%, 1/22/24		650		661
5.00%, 3/23/22		250		264
				2,921
Russia (8.4%)
Corporate Bond (1.0%)
Sibur Securities DAC, 4.13%, 10/5/23 (a)		2,120		2,031
Sovereign (7.4%)
Russian Federal Bond — OFZ, 6.40%, 5/27/20	RUB	208,950		3,295
Russian Foreign Bond — Eurobond, 4.50%, 4/4/22	$	10,400		10,596
5.63%, 4/4/42		1,800		1,887
				15,778
				17,809
Senegal (0.5%)
Sovereign (0.5%)
Senegal Government International Bond, 6.25%, 5/23/33 (a)(c)		1,170		1,040
South Africa (3.2%)
Sovereign (3.2%)
Eskom Holdings SOC Ltd., 7.13%, 2/11/25		2,210		2,117
Republic of South Africa Government Bond, 9.00%, 1/31/40	ZAR	13,600		933
South Africa Government International Bond, 5.88%, 9/16/25	$	3,570		3,670
				6,720

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Debt Portfolio

	Face Amount (000)		Value (000)
Turkey (4.6%)
Sovereign (4.6%)
Export Credit Bank of Turkey, 5.88%, 4/24/19 (a)	$	1,960	$	1,964
Turkey Government International Bond, 3.25%, 3/23/23 (c)		1,340		1,191
4.88%, 4/16/43		1,600		1,196
5.63%, 3/30/21		4,342		4,326
6.88%, 3/17/36		1,200		1,133
				9,810
Ukraine (4.0%)
Sovereign (4.0%)
Ukraine Government International Bond, 7.38%, 9/25/32 (a)		1,810		1,556
7.75%, 9/1/23 - 9/1/26		7,190		6,838
				8,394
Uruguay (0.5%)
Sovereign (0.5%)
Uruguay Government International Bond, 5.10%, 6/18/50 (c)		1,160		1,145
Venezuela (1.6%)
Sovereign (1.6%)
Petroleos de Venezuela SA, 6.00%, 11/15/26 (f)(g)		15,740		3,384
Total Fixed Income Securities (Cost $213,919)				202,775
	No. of Warrants
Warrants (0.0%)
Nigeria (0.0%)
Central Bank of Nigeria Bond, 0.00%, expires 11/15/20 (b)(h)		750		48
Venezuela (0.0%)
Venezuela Government International Bond, Oil-Linked Payment Obligation, 0.005, expires 4/15/20 (b)(h)		3,750		9
Total Warrants (Cost $—)				57
	Shares
Short-Term Investments (5.5%)
Securities held as Collateral on Loaned Securities (2.2%)
Investment Company (1.8%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note H)		3,800,428		3,800
	Face Amount (000)
Repurchase Agreements (0.4%)
Barclays Capital, Inc., (2.10%, dated 6/29/18, due 7/2/18; proceeds $218; fully collateralized by U.S. Government obligations; 1.00% - 1.88% due 3/31/22 - 2/15/46; valued at $222)	$	218		218

	Face Amount (000)		Value (000)
HSBC Securities USA, Inc., (2.10%, dated 6/29/18, due 7/2/18; proceeds $319; fully collateralized by U.S. Government obligations; 0.00% due 5/15/19 - 2/15/23; valued at $326)	$	319	$	319
Merrill Lynch & Co., Inc., (2.12%, dated 6/29/18, due 7/2/18; proceeds $290; fully collateralized by U.S. Government agency securities; 3.00% - 4.00% due 8/1/32 - 12/1/44; valued at $296)		290		290
				827
Total Securities held as Collateral on Loaned Securities (Cost $4,627)				4,627
	Shares
Investment Company (2.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note H) (Cost $4,231)		4,231,072		4,231
	Face Amount (000)
Nigeria (1.3%)
Sovereign (1.3%)
Nigeria Treasury Bill, 22.45%, 8/16/18 (Cost $2,859)	NGN	1,060,000		2,864
Total Short-Term Investments (Cost $11,717)				11,722
Total Investments (101.0%) (Cost $225,636) Including $7,861 of Securities Loaned (i)(j)				214,554
Liabilities in Excess of Other Assets (-1.0%)				(2,036	)
Net Assets (100.0%)			$	212,518

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(b)  Floating or Variable rate securities: The rates disclosed are as of June 30, 2018. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description in the Portfolio of Investments. Certain variable rate securities may not be based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description in the Portfolio of Investments.

(c)  All or a portion of this security was on loan at June 30, 2018.

(d)  Multi-step — Coupon rate changes in predetermined increments to maturity. Rate disclosed is as of June 30, 2018. Maturity date disclosed is the ultimate maturity date.

(e)  Perpetual — One or more securities do not have a predetermined maturity date. Rates for these securities are fixed for a period of time, after which they revert to a floating rate. Interest rates in effect are as of June 30, 2018.

(f)  Issuer in bankruptcy.

(g)  Non-income producing security; bond in default.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Debt Portfolio

(h)  Security has been deemed illiquid at June 30, 2018.

(i)  Securities are available for collateral in connection with an open foreign currency forward exchange contract.

(j)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $3,610,000 and the aggregate gross unrealized depreciation is approximately $14,875,000, resulting in net unrealized depreciation of approximately $11,265,000.

BADLAR  Buenos Aires Deposits of Large Amount Rate.

OFZ  Obilgatsyi Federal'novo Zaima (Russian Federal Loan Obligation).

Foreign Currency Forward Exchange Contract:

The Fund had the following foreign currency forward exchange contract open at June 30, 2018:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Depreciation (000)
JPMorgan Chase Bank NA	NGN	942,000	$	2,408	8/20/18	$	(183	)

ARS  — Argentine Peso

EUR  — Euro

MXN  — Mexican Peso

NGN  — Nigerian Naira

RUB  — Russian Ruble

ZAR  — South African Rand

Portfolio Composition*

Classification	Percentage of Total Investments
Sovereign		88.4	%
Corporate Bonds		9.6
Other**		2.0
Total Investments		100.0	%***

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2018.

**  Industries and/or investment types representing less than 5% of total investments.

***  Does not include an open foreign currency forward exchange contract with unrealized depreciation of approximately $183,000.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Emerging Markets Debt Portfolio

Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $217,605)	$	206,523
Investment in Security of Affiliated Issuer, at Value (Cost $8,031)		8,031
Total Investments in Securities, at Value (Cost $225,636)		214,554
Foreign Currency, at Value (Cost $297)		289
Cash		9
Interest Receivable		3,681
Receivable for Investments Sold		124
Due from Broker		40
Receivable for Fund Shares Sold		31
Receivable from Affiliate		7
Receivable from Securities Lending Income		3
Other Assets		20
Total Assets		218,758
Liabilities:
Collateral on Securities Loaned, at Value		4,636
Payable for Fund Shares Redeemed		570
Payable for Advisory Fees		411
Payable for Investments Purchased		256
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		183
Payable for Servicing Fees		62
Payable for Professional Fees		42
Deferred Capital Gain Country Tax		32
Payable for Administration Fees		14
Payable for Transfer Agency Fees		3
Payable for Custodian Fees		2
Payable for Directors' Fees and Expenses		2
Payable for Distribution Fees — Class II Shares		1
Other Liabilities		26
Total Liabilities		6,240
NET ASSETS	$	212,518
Net Assets Consist of:
Paid-in-Capital	$	228,115
Accumulated Undistributed Net Investment Income		16,958
Accumulated Net Realized Loss		(21,246	)
Unrealized Appreciation (Depreciation) on:
Investments (Net of $32 of Deferred Capital Gain Country Tax)		(11,114	)
Foreign Currency Forward Exchange Contracts		(183	)
Foreign Currency Translation		(12	)
Net Assets	$	212,518
CLASS I:
Net Assets	$	192,171
Net Asset Value, Offering and Redemption Price Per Share Applicable to 25,480,316 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	7.54
CLASS II:
Net Assets	$	20,347
Net Asset Value, Offering and Redemption Price Per Share Applicable to 2,718,387 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	7.49
(1) Including:
Securities on Loan, at Value:	$	7,861

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Emerging Markets Debt Portfolio

Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers	$	6,095
Dividends from Security of Affiliated Issuer (Note H)		23
Income from Securities Loaned — Net		20
Dividends from Securities of Unaffiliated Issuers		11
Total Investment Income		6,149
Expenses:
Advisory Fees (Note B)		848
Servicing Fees (Note D)		189
Administration Fees (Note C)		90
Professional Fees		61
Distribution Fees — Class II Shares (Note E)		26
Custodian Fees (Note G)		12
Shareholder Reporting Fees		12
Pricing Fees		7
Transfer Agency Fees (Note F)		5
Directors' Fees and Expenses		4
Other Expenses		11
Expenses Before Non Operating Expenses		1,265
Bank Overdraft Expense		1
Total Expenses		1,266
Waiver of Distribution Fees — Class II Shares (Note E)		(21	)
Rebate from Morgan Stanley Affiliate (Note H)		(3	)
Net Expenses		1,242
Net Investment Income		4,907
Realized Loss:
Investments Sold		(179	)
Foreign Currency Forward Exchange Contracts		(1	)
Foreign Currency Translation		(50	)
Net Realized Loss		(230	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net Increase in Deferred Capital Gain Country Tax of $32)		(20,350	)
Foreign Currency Forward Exchange Contracts		(14	)
Foreign Currency Translation		(5	)
Net Change in Unrealized Appreciation (Depreciation)		(20,369	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(20,599	)
Net Decrease in Net Assets Resulting from Operations	$	(15,692	)

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Emerging Markets Debt Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	4,907		$	12,333
Net Realized Loss		(230	)		(2,891	)
Net Change in Unrealized Appreciation (Depreciation)		(20,369	)		12,101
Net Increase (Decrease) in Net Assets Resulting from Operations		(15,692	)		21,543
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(11,836	)
Class II:
Net Investment Income		—			(1,115	)
Total Distributions		—			(12,951	)
Capital Share Transactions:(1)
Class I:
Subscribed		12,914			24,150
Distributions Reinvested		—			11,836
Redeemed		(26,500	)		(24,268	)
Class II:
Subscribed		1,637			4,550
Distributions Reinvested		—			1,115
Redeemed		(1,979	)		(3,953	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(13,928	)		13,430
Total Increase (Decrease) in Net Assets		(29,620	)		22,022
Net Assets:
Beginning of Period		242,138			220,116
End of Period (Including Accumulated Undistributed Net Investment Income of $16,958 and $12,051)	$	212,518		$	242,138
(1) Capital Share Transactions:
Class I:
Shares Subscribed		1,648			2,994
Shares Issued on Distributions Reinvested		—			1,520
Shares Redeemed		(3,383	)		(3,023	)
Net Increase (Decrease) in Class I Shares Outstanding		(1,735	)		1,491
Class II:
Shares Subscribed		212			568
Shares Issued on Distributions Reinvested		—			144
Shares Redeemed		(253	)		(493	)
Net Increase (Decrease) in Class II Shares Outstanding		(41	)		219

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Emerging Markets Debt Portfolio

	Class I
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	8.08		$	7.79		$	7.45		$	7.95		$	8.22		$	9.52
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.17			0.42			0.45			0.41			0.39			0.40
Net Realized and Unrealized Gain (Loss)		(0.71	)		0.32			0.34			(0.48	)		(0.13	)		(1.23	)
Total from Investment Operations		(0.54	)		0.74			0.79			(0.07	)		0.26			(0.83	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.45	)		(0.45	)		(0.43	)		(0.47	)		(0.36	)
Net Realized Gain		—			—			—			—			(0.06	)		(0.11	)
Total Distributions		—			(0.45	)		(0.45	)		(0.43	)		(0.53	)		(0.47	)
Net Asset Value, End of Period	$	7.54		$	8.08		$	7.79		$	7.45		$	7.95		$	8.22
Total Return(3)		(6.68	)%(6)		9.71	%		10.55	%		(1.12	)%		2.93	%		(8.75	)%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	192,171		$	219,994		$	200,455		$	209,794		$	243,906		$	272,200
Ratio of Expenses to Average Net Assets(8)		1.10	%(4)(7)		1.10	%(4)		1.05	%(4)		1.09	%(4)		1.08	%(4)		1.06	%(4)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.10	%(4)(7)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income to Average Net Assets(8)		4.34	%(4)(7)		5.22	%(4)		5.72	%(4)		5.24	%(4)		4.69	%(4)		4.48	%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%(5))(7)		0.01	%		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		17	%(6)		46	%		53	%		37	%		81	%		88	%
(8) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			N/A			1.08	%		N/A			N/A			N/A
Net Investment Income to Average Net Assets		N/A			N/A			5.69	%		N/A			N/A			N/A

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses to Average Net Assets would have been 0.03% higher and the Ratio of Net Investment Income to Average Net Assets would have been 0.03% lower had the Custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Emerging Markets Debt Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	8.02		$	7.74		$	7.40		$	7.90		$	8.17		$	9.46
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.17			0.41			0.44			0.40			0.39			0.39
Net Realized and Unrealized Gain (Loss)		(0.70	)		0.32			0.34			(0.48	)		(0.13	)		(1.22	)
Total from Investment Operations		(0.53	)		0.73			0.78			(0.08	)		0.26			(0.83	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.45	)		(0.44	)		(0.42	)		(0.47	)		(0.35	)
Net Realized Gain		—			—			—			—			(0.06	)		(0.11	)
Total Distributions		—			(0.45	)		(0.44	)		(0.42	)		(0.53	)		(0.46	)
Net Asset Value, End of Period	$	7.49		$	8.02		$	7.74		$	7.40		$	7.90		$	8.17
Total Return(3)		(6.61	)%(6)		9.58	%		10.58	%		(1.17	)%		2.89	%		(8.76	)%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	20,347		$	22,144		$	19,661		$	18,270		$	19,506		$	20,540
Ratio of Expenses to Average Net Assets(8)		1.15	%(4)(7)		1.15	%(4)		1.10	%(4)		1.14	%(4)		1.13	%(4)		1.11	%(4)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.15	%(4)(7)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income to Average Net Assets(8)		4.29	%(4)(7)		5.17	%(4)		5.67	%(4)		5.19	%(4)		4.64	%(4)		4.43	%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%(5)(7)		0.01	%		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		17	%(6)		46	%		53	%		37	%		81	%		88	%
(8) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.35	%(7)		1.36	%		1.33	%		1.37	%		1.43	%		1.41	%
Net Investment Income to Average Net Assets		4.09	%(7)		4.96	%		5.44	%		4.96	%		4.34	%		4.13	%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets would have been 0.03% higher and the Ratio of Net Investment Income to Average Net Assets would have been 0.03% lower had the Custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Emerging Markets Debt Portfolio. The Fund seeks high total return by investing primarily in fixed income securities of government and government-related issuers and, to a lesser extent, of corporate issuers in emerging market countries. The Fund offers two classes of shares — Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) Certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (2) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the

mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (3) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (4) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or

13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for

exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Fixed Income Securities
Corporate Bonds	$	—	$	20,134		$	—	$	20,134
Sovereign		—		182,641			—		182,641
Total Fixed Income Securities		—		202,775			—		202,775
Warrants		—		57			—		57
Short-Term Investments
Investment Company		8,031		—			—		8,031
Repurchase Agreements		—		827			—		827
Sovereign		—		2,864			—		2,864
Total Short-Term Investments		8,031		3,691			—		11,722
Total Assets		8,031		206,523			—		214,554
Liabilities:
Foreign Currency Forward Exchange Contract		—		(183	)		—		(183	)
Total	$	8,031	$	206,340		$	—	$	214,371

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, the Fund did not have any investments transfer between investment levels.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a

14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition

of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Structured Investments: The Fund invested a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Fund will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or

15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Fund is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Fund's illiquidity to the extent that the Fund, at a particular time, may be unable to find qualified buyers for these securities.

6.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives,

there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses

16

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2018:

	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Depreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	(183	)

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2018 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(1	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(14	)

At June 30, 2018, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contract	$	—	$	(183	)

(a)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or

potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Pledged (000)		Net Amount (not less than $0) (000)
JPMorgan Chase Bank NA	$	(183	)	$	—	$	—	$	(183	)

For the six months ended June 30, 2018, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	2,408,000

7.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to

17

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	7,861	(b)	$	—	$	(7,861	)(c)(d)	$	0

(b)  Represents market value of loaned securities at period end.

(c)  The Fund received cash collateral of approximately $4,636,000, of which approximately $4,627,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2018, there was uninvested cash of approximately $9,000, which is not reflected in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $3,462,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(d)  The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations

by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2018:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Sovereign	$	4,636	$	—	$	—	$	—	$	4,636
Total Borrowings	$	4,636	$	—	$	—	$	—	$	4,636
Gross amount of recognized liabilities for securities lending transactions									$	4,636

8.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

9.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Fund holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Fund to further risk of loss in the event

18

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

of a failure to complete the transaction by the counterparty.

10.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2018, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.75% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.30% for Class I shares and 1.35% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect during the most recent reporting period.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.20% of the 0.25% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action is inappropriate. For the six months ended June 30, 2018, this waiver amounted to approximately $21,000.

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $36,589,000 and $40,421,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2018.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by approximately $3,000 relating to the Fund's investment in the Liquidity Funds.

19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	16,562	$	33,786	$	42,317	$	23

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	8,031

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	12,951	$	—	$	13,254	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and foreign capital gains tax, resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Undistributed Net Investment Income (000)			Accumulated Net Realized Loss (000)		Paid-in- Capital (000)
$	(159	)	$	159	$	—

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	12,224	$	—

20

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

At December 31, 2017, the Fund had available for federal income tax purposes unused short term and long term capital losses of approximately $1,409,000 and $18,421,000, respectively, that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 68.9%.

L. Accounting Pronouncement: In March 2017, FASB issued an Accounting Standard Update, ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities (the "ASU") which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The ASU does not require any accounting change for debt securities held at a discount; the discount continues to be accreted to maturity. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. At this time, management is evaluating the implications of these changes on the financial statements.

21

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's management fee was higher than its peer group average and the Fund's total expense ratio was higher than but close to its peer group average. After discussion, the Board concluded that the Fund's (i) performance was competitive with its peer group average, (ii) management fee was acceptable and (iii) total expense ratio was competitive with its peer group average.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser

22

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Investment Advisory Agreement Approval (unaudited) (cont'd)

and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

23

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
30 Rockefeller Plaza
New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFEMDSAN
2190836 EXP. 08.31.19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Emerging Markets Equity Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Expense Example		2
Portfolio of Investments		3
Statement of Assets and Liabilities		6
Statement of Operations		7
Statements of Changes in Net Assets		8
Financial Highlights		9
Notes to Financial Statements		11
Investment Advisory Agreement Approval		20
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Expense Example (unaudited)

Emerging Markets Equity Portfolio

As a shareholder of the Emerging Markets Equity Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which may include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Equity Portfolio Class I	$	1,000.00	$	905.30	$	1,018.70	$	5.81	$	6.16		1.23	%
Emerging Markets Equity Portfolio Class II		1,000.00		905.00		1,018.45		6.05		6.41		1.28

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments

Emerging Markets Equity Portfolio

	Shares		Value (000)
Common Stocks (94.7%)
Argentina (0.4%)
Grupo Financiero Galicia SA ADR		29,835	$	984
Austria (0.8%)
Erste Group Bank AG (a)		49,591		2,070
Brazil (4.8%)
B3 SA — Brasil Bolsa Balcao		369,327		1,949
Banco Bradesco SA (Preference)		504,328		3,500
Itau Unibanco Holding SA (Preference)		396,719		4,129
Petroleo Brasileiro SA		376,454		1,886
Petroleo Brasileiro SA (Preference)		433,032		1,921
				13,385
Chile (1.8%)
Banco Santander Chile		21,411,659		1,677
Banco Santander Chile ADR		8,148		256
SACI Falabella		318,771		2,921
				4,854
China (26.0%)
AAC Technologies Holdings, Inc. (b)		61,000		859
Alibaba Group Holding Ltd. ADR (a)		51,314		9,520
Baidu, Inc. ADR (a)		2,700		656
Bank of China Ltd. H Shares (b)		11,414,000		5,659
Brilliance China Automotive Holdings Ltd. (b)		518,000		935
China Construction Bank Corp. H Shares (b)		8,405,230		7,767
China Mengniu Dairy Co., Ltd. (a)(b)		689,000		2,336
China Mobile Ltd. (b)		140,000		1,244
China Overseas Land & Investment Ltd. (b)		376,000		1,239
China Pacific Insurance Group Co., Ltd. H Shares (b)		786,200		3,041
China Resources Land Ltd. (b)		202,000		681
China Unicom Hong Kong Ltd. (b)		886,000		1,107
CSPC Pharmaceutical Group Ltd. (b)		924,000		2,791
JD.com, Inc. ADR (a)		31,842		1,240
Kweichow Moutai Co., Ltd., Class A		4,598		508
New Oriental Education & Technology Group, Inc. ADR		22,903		2,168
PetroChina Co., Ltd. H Shares (b)		2,076,000		1,580
Shenzhou International Group Holdings Ltd. (b)		232,000		2,864
Sino Biopharmaceutical Ltd. (b)		1,651,000		2,534
Sinopharm Group Co., Ltd. H Shares (b)		128,000		515
Sogou, Inc. ADR (a)(c)		74,633		853
TAL Education Group ADR (a)		31,552		1,161
Tencent Holdings Ltd. (b)		409,900		20,574
				71,832
Egypt (0.7%)
Commercial International Bank Egypt SAE		396,535		1,875
Germany (0.9%)
Adidas AG		10,800		2,358
Hong Kong (1.1%)
Samsonite International SA (a)		874,500		3,093

	Shares		Value (000)
Hungary (1.1%)
OTP Bank Nyrt		87,436	$	3,166
India (8.1%)
Ashok Leyland Ltd.		1,606,339		2,949
Eicher Motors Ltd.		3,680		1,536
HDFC Bank Ltd. ADR		15,800		1,659
ICICI Bank Ltd.		283,983		1,142
ICICI Bank Ltd. ADR		97,505		783
IndusInd Bank Ltd.		107,555		3,033
Marico Ltd.		707,828		3,426
Maruti Suzuki India Ltd.		25,245		3,252
Shree Cement Ltd.		9,154		2,078
Zee Entertainment Enterprises Ltd.		334,473		2,656
				22,514
Indonesia (3.9%)
Astra International Tbk PT		4,606,600		2,122
Bank Mandiri Persero Tbk PT		3,620,800		1,731
Bumi Serpong Damai Tbk PT		9,924,100		1,084
Semen Indonesia Persero Tbk PT		3,273,600		1,628
Telekomunikasi Indonesia Persero Tbk PT		7,908,400		2,069
Unilever Indonesia Tbk PT		677,700		2,180
				10,814
Korea, Republic of (7.8%)
CJ Corp.		5,253		669
Coway Co., Ltd.		16,533		1,285
Hanssem Co., Ltd.		7,142		673
Hugel, Inc. (a)		2,336		1,010
Hyundai Motor Co.		14,513		1,634
KB Financial Group, Inc.		20,984		994
Korea Electric Power Corp.		45,695		1,312
NAVER Corp.		3,064		2,098
Samsung Electronics Co., Ltd.		212,574		8,898
Samsung Electronics Co., Ltd. (Preference)		59,123		1,997
Shinhan Financial Group Co., Ltd.		26,797		1,041
				21,611
Malaysia (5.0%)
Gamuda Bhd		624,000		505
Genting Malaysia Bhd		2,523,800		3,049
IHH Healthcare Bhd		2,425,200		3,662
Malayan Banking Bhd		999,001		2,226
Malaysia Airports Holdings Bhd		1,038,000		2,261
Sime Darby Plantation Bhd		1,370,600		1,808
Sime Darby Property Bhd		1,395,200		415
				13,926
Mexico (5.4%)
Alsea SAB de CV		558,662		1,925
America Movil SAB de CV, Class L ADR		162,933		2,714
Fomento Economico Mexicano SAB de CV ADR		35,224		3,092
Grupo Financiero Banorte SAB de CV Series O		718,085		4,222
Wal-Mart de Mexico SAB de CV		1,179,603		3,114
				15,067

The accompanying notes are an integral part of the financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Equity Portfolio

	Shares		Value (000)
Pakistan (0.4%)
United Bank Ltd.		819,600	$	1,137
Peru (0.9%)
Credicorp Ltd.		10,846		2,442
Philippines (2.8%)
Ayala Corp.		73,150		1,261
Ayala Land, Inc.		1,541,900		1,095
Metropolitan Bank & Trust Co.		2,132,591		2,933
SM Investments Corp.		149,724		2,455
				7,744
Poland (4.5%)
Bank Zachodni WBK SA		23,694		2,110
CCC SA		32,180		1,778
Jeronimo Martins SGPS SA		148,816		2,150
LPP SA		881		1,996
Powszechna Kasa Oszczednosci Bank Polski SA (a)		285,499		2,819
Powszechny Zaklad Ubezpieczen SA		153,502		1,598
				12,451
Russia (4.9%)
LUKOIL PJSC ADR		47,602		3,255
MMC Norilsk Nickel PJSC ADR		126,042		2,262
Sberbank of Russia PJSC ADR		267,447		3,861
X5 Retail Group N.V. GDR		80,955		2,144
Yandex N.V., Class A (a)		58,690		2,107
				13,629
South Africa (5.8%)
AVI Ltd.		326,897		2,578
Bidvest Group Ltd. (The)		145,216		2,086
Capitec Bank Holdings Ltd. (c)		33,276		2,106
Clicks Group Ltd. (c)		137,854		1,975
Imperial Holdings Ltd.		124,715		1,781
Naspers Ltd., Class N		4,395		1,116
Reunert Ltd.		195,809		1,146
Sanlam Ltd.		439,439		2,245
Tiger Brands Ltd. (c)		36,516		882
				15,915
Taiwan (7.6%)
ASE Technology Holding Co., Ltd.		418,738		983
CTBC Financial Holding Co. Ltd.		908,000		654
Hon Hai Precision Industry Co., Ltd.		274,965		750
Largan Precision Co., Ltd.		17,000		2,504
MediaTek, Inc.		162,000		1,594
Nanya Technology Corp.		562,000		1,534
Nien Made Enterprise Co., Ltd.		170,000		1,452
President Chain Store Corp.		110,000		1,247
Taiwan Semiconductor Manufacturing Co., Ltd.		1,467,000		10,417
				21,135
Total Common Stocks (Cost $210,298)				262,002

	Shares		Value (000)
Short-Term Investments (7.1%)
Securities held as Collateral on Loaned Securities (1.8%)
Investment Company (1.8%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note H) (Cost $4,968)		4,968,318	$	4,968
Investment Company (5.3%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note H) (Cost $14,620)		14,619,648		14,620
Total Short-Term Investments (Cost $19,588)				19,588
Total Investments (101.8%) (Cost $229,886) Including $4,862 of Securities Loaned (d)				281,590
Liabilities in Excess of Other Assets (-1.8%)				(5,031	)
Net Assets (100.0%)			$	276,559

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  All or a portion of this security was on loan at June 30, 2018.

(d)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $65,751,000 and the aggregate gross unrealized depreciation is approximately $14,069,000, resulting in net unrealized appreciation of approximately $51,682,000.

ADR  American Depositary Receipt.

GDR  Global Depositary Receipt.

PJSC  Public Joint Stock Company.

Foreign Currency Forward Exchange Contract:

The Fund had the following foreign currency forward exchange contract open at June 30, 2018:

Counterparty	Contract to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Depreciation (000)
State Street Bank and Trust Co.	HKD	332,722	$	42,435	9/13/18	$	(22	)

HKD  — Hong Kong Dollar

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Equity Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		52.9	%
Banks		23.6
Internet Software & Services		12.9
Short-Term Investment		5.3
Semiconductors & Semiconductor Equipment		5.3
Total Investments		100.0	%***

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2018.

**  Industries and/or investment types representing less than 5% of total investments.

***  Does not include an open foreign currency forward exchange contract with unrealized depreciation of approximately $22,000.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Emerging Markets Equity Portfolio

Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $210,298)	$	262,002
Investment in Security of Affiliated Issuer, at Value (Cost $19,588)		19,588
Total Investments in Securities, at Value (Cost $229,886)		281,590
Foreign Currency, at Value (Cost $13)		12
Dividends Receivable		907
Receivable for Fund Shares Sold		157
Tax Reclaim Receivable		64
Receivable for Investments Sold		40
Receivable from Affiliate		18
Receivable from Securities Lending Income		3
Other Assets		32
Total Assets		282,823
Liabilities:
Collateral on Securities Loaned, at Value		4,968
Payable for Advisory Fees		654
Payable for Fund Shares Redeemed		206
Payable for Custodian Fees		140
Payable for Servicing Fees		108
Payable for Professional Fees		44
Payable for Investments Purchased		31
Deferred Capital Gain Country Tax		30
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		22
Payable for Administration Fees		19
Payable for Directors' Fees and Expenses		6
Payable for Transfer Agency Fees		5
Payable for Distribution Fees — Class II Shares		1
Other Liabilities		30
Total Liabilities		6,264
NET ASSETS	$	276,559
Net Assets Consist of:
Paid-in-Capital	$	207,065
Accumulated Undistributed Net Investment Income		2,476
Accumulated Undistributed Net Realized Gain		15,375
Unrealized Appreciation (Depreciation) on:
Investments (Net of $30 of Deferred Capital Gain Country Tax)		51,674
Foreign Currency Forward Exchange Contracts		(22	)
Foreign Currency Translation		(9	)
Net Assets	$	276,559
CLASS I:
Net Assets	$	199,346
Net Asset Value, Offering and Redemption Price Per Share Applicable to 12,479,103 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	15.97
CLASS II:
Net Assets	$	77,213
Net Asset Value, Offering and Redemption Price Per Share Applicable to 4,851,566 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	15.91
(1) Including:
Securities on Loan, at Value:	$	4,862

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Emerging Markets Equity Portfolio

Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $454 of Foreign Taxes Withheld)	$	3,125
Dividends from Security of Affiliated Issuer (Note H)		78
Income from Securities Loaned — Net		24
Total Investment Income		3,227
Expenses:
Advisory Fees (Note B)		1,360
Servicing Fees (Note D)		255
Custodian Fees (Note G)		119
Administration Fees (Note C)		128
Distribution Fees — Class II Shares (Note E)		111
Professional Fees		62
Shareholder Reporting Fees		21
Transfer Agency Fees (Note F)		8
Pricing Fees		5
Directors' Fees and Expenses		6
Other Expenses		10
Expenses Before Non Operating Expenses		2,085
Bank Overdraft Expense		1
Total Expenses		2,086
Waiver of Distribution Fees — Class II Shares (Note E)		(88	)
Rebate from Morgan Stanley Affiliate (Note H)		(8	)
Net Expenses		1,990
Net Investment Income		1,237
Realized Gain (Loss):
Investments Sold		23,034
Foreign Currency Translation		(102	)
Net Realized Gain		22,932
Change in Unrealized Appreciation (Depreciation):
Investments (Net Decrease in Deferred Capital Gain Country Tax of $277)		(53,246	)
Foreign Currency Forward Exchange Contracts		(22	)
Foreign Currency Translation		(8	)
Net Change in Unrealized Appreciation (Depreciation)		(53,276	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(30,344	)
Net Decrease in Net Assets Resulting from Operations	$	(29,107	)

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Emerging Markets Equity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,237		$	1,631
Net Realized Gain		22,932			17,193
Net Change in Unrealized Appreciation (Depreciation)		(53,276	)		68,183
Net Increase (Decrease) in Net Assets Resulting from Operations		(29,107	)		87,007
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(1,590	)
Class II:
Net Investment Income		—			(640	)
Total Distributions		—			(2,230	)
Capital Share Transactions:(1)
Class I:
Subscribed		25,276			32,549
Distributions Reinvested		—			1,590
Redeemed		(43,052	)		(30,630	)
Class II:
Subscribed		11,194			20,588
Distributions Reinvested		—			640
Redeemed		(15,027	)		(33,054	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(21,609	)		(8,317	)
Total Increase (Decrease) in Net Assets		(50,716	)		76,460
Net Assets:
Beginning of Period		327,275			250,815
End of Period (Including Accumulated Undistributed Net Investment Income of $2,476 and $1,239)	$	276,559		$	327,275
(1) Capital Share Transactions:
Class I:
Shares Subscribed		1,432			2,061
Shares Issued on Distributions Reinvested		—			101
Shares Redeemed		(2,440	)		(1,930	)
Net Increase (Decrease) in Class I Shares Outstanding		(1,008	)		232
Class II:
Shares Subscribed		627			1,364
Shares Issued on Distributions Reinvested		—			41
Shares Redeemed		(850	)		(2,155	)
Net Decrease in Class II Shares Outstanding		(223	)		(750	)

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Emerging Markets Equity Portfolio

	Class I
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	17.65		$	13.16		$	12.39		$	13.98		$	14.69		$	15.03
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.07			0.09			0.10			0.08			0.08			0.08
Net Realized and Unrealized Gain (Loss)		(1.75	)		4.52			0.73			(1.56	)		(0.73	)		(0.24	)
Total from Investment Operations		(1.68	)		4.61			0.83			(1.48	)		(0.65	)		(0.16	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.12	)		(0.06	)		(0.11	)		(0.06	)		(0.18	)
Net Asset Value, End of Period	$	15.97		$	17.65		$	13.16		$	12.39		$	13.98		$	14.69
Total Return(3)		(9.47	)%(8)		35.06	%		6.74	%		(10.69	)%		(4.49	)%		(1.02	)%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	199,346		$	238,026		$	174,423		$	204,032		$	268,121		$	271,285
Ratio of Expenses to Average Net Assets(10)		1.23	%(4)(9)		1.25	%(4)		1.28	%(4)(6)		1.40	%(4)(5)		1.42	%(4)		1.41	%(4)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.23	%(4)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income to Average Net Assets(10)		0.80	%(4)(9)		0.56	%(4)		0.74	%(4)		0.55	%(4)		0.53	%(4)		0.57	%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.01	%
Portfolio Turnover Rate		19	%(8)		37	%		34	%		38	%		45	%		48	%
(10) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			1.32	%		1.39	%		1.64	%		1.70	%		1.71	%
Net Investment Income to Average Net Assets		N/A			0.49	%		0.63	%		0.31	%		0.25	%		0.27	%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class I shares. Prior to September 30, 2015, the maximum ratio was 1.42% for Class I shares.

(6)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class I shares. Prior to September 30, 2016, the maximum ratio was 1.35% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Emerging Markets Equity Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	17.59		$	13.11		$	12.35		$	13.93		$	14.64		$	14.98
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.06			0.08			0.09			0.07			0.07			0.08
Net Realized and Unrealized Gain (Loss)		(1.74	)		4.51			0.73			(1.55	)		(0.73	)		(0.25	)
Total from Investment Operations		(1.68	)		4.59			0.82			(1.48	)		(0.66	)		(0.17	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.11	)		(0.06	)		(0.10	)		(0.05	)		(0.17	)
Net Asset Value, End of Period	$	15.91		$	17.59		$	13.11		$	12.35		$	13.93		$	14.64
Total Return(3)		(9.50	)%(8)		35.06	%		6.62	%		(10.71	)%		(4.55	)%		(1.10	)%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	77,213		$	89,249		$	76,392		$	73,325		$	87,934		$	101,815
Ratio of Expenses to Average Net Assets(10)		1.28	%(4)(9)		1.30	%(4)		1.33	%(4)(6)		1.45	%(4)(5)		1.47	%(4)		1.46	%(4)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.28	%(4)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income to Average Net Assets(10)		0.75	%(4)(9)		0.51	%(4)		0.69	%(4)		0.50	%(4)		0.48	%(4)		0.52	%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.01	%
Portfolio Turnover Rate		19	%(8)		37	%		34	%		38	%		45	%		48	%
(10) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.48	%(9)		1.57	%		1.64	%		1.92	%		2.05	%		2.06	%
Net Investment Income (Loss) to Average Net Assets		0.55	%(9)		0.24	%		0.38	%		0.03	%		(0.10	)%		(0.08	)%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class II shares. Prior to September 30, 2015, the maximum ratio was 1.47% for Class II shares.

(6)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.30% for Class II shares. Prior to September 30, 2016, the maximum ratio was 1.40% for Class II shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Emerging Markets Equity Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries. The Fund offers two classes of shares — Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing

price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Company ("MSIM Company") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates

11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 — unadjusted quoted prices in active markets for identical investments

•  Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 — significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Automobiles	$	7,943	$	—	$	—	$	7,943
Banks		65,322		—		—		65,322
Beverages		3,600		—		—		3,600
Biotechnology		1,010		—		—		1,010
Capital Markets		1,949		—		—		1,949
Commercial Banks		654		—		—		654
Construction & Engineering		505		—		—		505
Construction Materials		3,706		—		—		3,706
Distributors		1,781		—		—		1,781
Diversified Consumer Services		3,329		—		—		3,329
Diversified Financial Services		1,261		—		—		1,261
Diversified Telecommunication Services		3,176		—		—		3,176
Electric Utilities		1,312		—		—		1,312
Electronic Equipment, Instruments & Components		4,113		—		—		4,113
Food & Staples Retailing		10,630		—		—		10,630
Food Products		7,604		—		—		7,604
Health Care Providers & Services		4,177		—		—		4,177
Hotels, Restaurants & Leisure		4,974		—		—		4,974
Household Durables		3,410		—		—		3,410
Household Products		2,180		—		—		2,180
Industrial Conglomerates		6,356		—		—		6,356
Insurance		6,884		—		—		6,884
Internet & Direct Marketing Retail		1,240		—		—		1,240
Internet Software & Services		35,808		—		—		35,808
Machinery		4,485		—		—		4,485
Media		3,772		—		—		3,772
Metals & Mining		2,262		—		—		2,262
Multi-Line Retail		2,921		—		—		2,921
Oil, Gas & Consumable Fuels		8,642		—		—		8,642
Personal Products		3,426		—		—		3,426
Pharmaceuticals		5,325		—		—		5,325
Real Estate Management & Development		4,514		—		—		4,514
Semiconductors & Semiconductor Equipment		14,528		—		—		14,528

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Tech Hardware, Storage & Peripherals	$	10,895	$	—		$	—	$	10,895
Textiles, Apparel & Luxury Goods		12,089		—			—		12,089
Transportation Infrastructure		2,261		—			—		2,261
Wireless Telecommunication Services		3,958		—			—		3,958
Total Common Stocks		262,002		—			—		262,002
Short-Term Investment
Investment Company		19,588		—			—		19,588
Total Assets		281,590		—			—		281,590
Liabilities:
Foreign Currency Forward Exchange Contract		—		(22	)		—		(22	)
Total	$	281,590	$	(22	)	$	—	$	281,568

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, securities with a total value of approximately $196,371,000 transferred from Level 2 to Level 1. Securities that were valued using other significant observable inputs at December 31, 2017 were valued using unadjusted quoted prices at June 30, 2018. At December 31, 2017, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the

13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for

investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser and/or Sub-Adviser seek to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities,

14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2018:

	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Depreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	(22	)

The following table sets forth by primary risk exposure the change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2018 in accordance with ASC 815:

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contract	$	(22	)

At June 30, 2018, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contract	$	—	$	(22	)

(a)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms

15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Pledged (000)		Net Amount (not less than $0) (000)
State Street Bank and Trust Co.	$	(22	)	$	—	$	—	$	(22	)

For the six months ended June 30, 2018, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	7,073,000

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agree-

ments. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	4,862	(b)	$	—	$	(4,862	)(c)(d)	$	0

(b)  Represents market value of loaned securities at period end.

(c)  The Fund received cash collateral of approximately $4,968,000, which was subsequently invested in Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments.

(d)  The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining

16

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

contractual maturity of those transactions as of June 30, 2018:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	4,862	$	—	$	—	$	—	$	4,862
Total Borrowings	$	4,862	$	—	$	—	$	—	$	4,862
Gross amount of recognized liabilities for securities lending transactions									$	4,862

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Fund holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Fund to further risk of loss in the event of a failure to complete the transaction by the counterparty.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Next $1.5 billion			Over $2.5 billion
	0.85	%		0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2018, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.84% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.25% for Class I shares and 1.30% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect for the six months ended June 30, 2018.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's

17

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.20% of the 0.25% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action is appropriate. For the six months ended June 30, 2018, this waiver amounted to approximately $88,000.

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $59,924,000 and $89,546,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2018.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due

to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by approximately $8,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	7,801	$	58,153	$	46,366	$	78

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	19,588

During the six months ended June 30, 2018, the Fund incurred less than $500 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator, Sub-Adviser and Distributor, for portfolio transactions executed on behalf of the Fund.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

18

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	2,230	$	—	$	1,267	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, foreign capital gains tax and an expired capital loss carryforward,

resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Undistributed Net Investment Income (000)			Accumulated Net Realized Loss (000)		Paid-in- Capital (000)
$	(295	)	$	23,678	$	(23,383	)

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	1,272	$	—

At December 31, 2017, the Fund had available for federal income tax purposes unused short term capital losses of approximately $6,470,000 that do not have an expiration date.

During the year ended December 31, 2017, capital loss carryforwards of approximately $23,383,000 expired for federal income tax purposes.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2017, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $17,351,000.

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 37.5%.

19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser

20

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited) (cont'd)

and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

21

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Adviser

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
30 Rockefeller Plaza
New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFEMESAN
2190869 EXP. 08.31.19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Global Infrastructure Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Expense Example		2
Portfolio of Investments		3
Statement of Assets and Liabilities		5
Statement of Operations		6
Statements of Changes in Net Assets		7
Financial Highlights		8
Notes to Financial Statements		10
Investment Advisory Agreement Approval		17
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Expense Example (unaudited)

Global Infrastructure Portfolio

As a shareholder of the Global Infrastructure Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which may include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Infrastructure Portfolio Class I	$	1,000.00	$	981.00	$	1,020.48	$	4.27	$	4.36		0.87	%
Global Infrastructure Portfolio Class II		1,000.00		979.60		1,019.24		5.50		5.61		1.12

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments

Global Infrastructure Portfolio

	Shares		Value (000)
Common Stocks (98.0%)
Australia (8.2%)
APA Group		101,142	$	737
Atlas Arteria Ltd.		291,189		1,386
Spark Infrastructure Group		444,008		749
Sydney Airport		291,450		1,544
Transurban Group		315,350		2,794
				7,210
Brazil (0.3%)
Energisa SA (Units) (a)		29,900		225
Canada (15.1%)
Canadian Pacific Railway Ltd.		8,510		1,560
Enbridge, Inc. (b)		139,269		4,979
Hydro One Ltd.		125,256		1,909
Pembina Pipeline Corp.		62,640		2,169
TransCanada Corp. (b)		63,090		2,730
				13,347
China (1.2%)
ENN Energy Holdings Ltd. (c)		110,000		1,082
France (8.1%)
Aeroports de Paris (ADP)		2,980		674
Getlink		172,900		2,371
Vinci SA		42,780		4,115
				7,160
Germany (0.3%)
Fraport AG Frankfurt Airport Services Worldwide		2,880		278
India (0.9%)
Azure Power Global Ltd. (d)		58,054		839
Italy (3.6%)
Atlantia SpA		61,306		1,813
Infrastrutture Wireless Italiane SpA		50,760		391
Italgas SpA		73,357		404
Snam SpA		140,970		589
				3,197
Japan (1.1%)
East Japan Railway Co.		7,200		690
West Japan Railway Co.		4,000		295
				985
Mexico (4.7%)
Grupo Aeroportuario del Pacifico SAB de CV		49,717		461
Promotora y Operadora de Infraestructura SAB de CV		407,290		3,646
				4,107
Netherlands (1.5%)
Koninklijke Vopak N.V.		28,500		1,317
New Zealand (0.7%)
Auckland International Airport Ltd.		133,219		612

	Shares		Value (000)
Spain (8.9%)
Aena SME SA		3,690	$	670
Atlantica Yield PLC		256,024		5,167
Ferrovial SA		81,341		1,669
Red Electrica Corp., SA (b)		15,010		306
				7,812
United Kingdom (11.9%)
John Laing Group PLC		712,893		2,593
National Grid PLC		375,161		4,151
Pennon Group PLC		46,196		484
Severn Trent PLC		27,086		708
United Utilities Group PLC		251,969		2,538
				10,474
United States (31.5%)
American Tower Corp. REIT		29,980		4,322
American Water Works Co., Inc.		12,300		1,050
Atmos Energy Corp.		13,520		1,219
Cheniere Energy, Inc. (d)		20,710		1,350
Crown Castle International Corp. REIT		27,455		2,960
CSX Corp.		17,050		1,088
Edison International		27,900		1,765
Enbridge Energy Management LLC (d)		77,251		793
Eversource Energy		17,519		1,027
Kinder Morgan, Inc.		174,813		3,089
NiSource, Inc.		18,053		474
PG&E Corp.		37,037		1,576
Sempra Energy		25,886		3,006
Targa Resources Corp.		19,000		940
Union Pacific Corp.		10,300		1,459
Williams Cos., Inc. (The)		62,286		1,689
				27,807
Total Common Stocks (Cost $76,632)				86,452
Short-Term Investments (1.9%)
Securities held as Collateral on Loaned Securities (0.2%)
Investment Company (0.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note H)		169,634		170
	Face Amount (000)
Repurchase Agreements (0.0%)
Barclays Capital, Inc., (2.10%, dated 6/29/18, due 7/2/18; proceeds $10; fully collateralized by U.S. Government obligations; 1.00% - 1.88% due 3/31/22 - 2/15/46; valued at $10)	$	10		10
HSBC Securities USA, Inc., (2.10%, dated 6/29/18, due 7/2/18; proceeds $14; fully collateralized by U.S. Government obligations; 0.00% due 5/15/19 - 2/15/23; valued at $15)		14		14

The accompanying notes are an integral part of the financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Global Infrastructure Portfolio

	Face Amount (000)		Value (000)
Repurchase Agreements (cont'd)
Merrill Lynch & Co., Inc., (2.12%, dated 6/29/18, due 7/2/18; proceeds $13; fully collateralized by U.S. Government agency securities; 3.00% - 4.00% due 8/1/32 - 12/1/44; valued at $13)	$	13	$	13
				37
Total Securities held as Collateral on Loaned Securities (Cost $207)				207
	Shares
Investment Company (1.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note H) (Cost $1,478)		1,478,345		1,478
Total Short-Term Investments (Cost $1,685)				1,685
Total Investments (99.9%) (Cost $78,317) Including $6,560 of Securities Loaned (e)				88,137
Other Assets in Excess of Liabilities (0.1%)				95
Net Assets (100.0%)			$	88,232

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Consists of one or more classes of securities traded together as a unit; stocks with attached warrants.

(b)  All or a portion of this security was on loan at June 30, 2018.

(c)  Security trades on the Hong Kong exchange.

(d)  Non-income producing security.

(e)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $12,025,000 and the aggregate gross unrealized depreciation is approximately $2,205,000, resulting in net unrealized appreciation of approximately $9,820,000.

REIT  Real Estate Investment Trust.

Portfolio Composition*

Classification	Percentage of Total Investments
Oil & Gas Storage & Transportation		30.2	%
Toll Roads		13.7
Electricity Transmission & Distribution		13.3
Diversified		9.5
Communications		8.7
Renewables		6.8
Other**		6.5
Railroads		5.8
Water		5.5
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2018.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Global Infrastructure Portfolio

Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $76,669)	$	86,489
Investment in Security of Affiliated Issuer, at Value (Cost $1,648)		1,648
Total Investments in Securities, at Value (Cost $78,317)		88,137
Foreign Currency, at Value (Cost $214)		213
Cash		—	@
Dividends Receivable		470
Receivable for Investments Sold		265
Receivable for Fund Shares Sold		65
Tax Reclaim Receivable		20
Receivable from Affiliate		2
Receivable from Securities Lending Income		1
Other Assets		21
Total Assets		89,194
Liabilities:
Payable for Investments Purchased		500
Collateral on Securities Loaned, at Value		207
Payable for Advisory Fees		89
Payable for Fund Shares Redeemed		51
Payable for Professional Fees		51
Payable for Servicing Fees		37
Payable for Distribution Fees — Class II Shares		9
Payable for Administration Fees		6
Payable for Transfer Agency Fees		2
Payable for Custodian Fees		1
Other Liabilities		9
Total Liabilities		962
NET ASSETS	$	88,232
Net Assets Consist of:
Paid-in-Capital	$	68,957
Accumulated Undistributed Net Investment Income		4,158
Accumulated Undistributed Net Realized Gain		5,299
Unrealized Appreciation (Depreciation) on:
Investments		9,820
Foreign Currency Translation		(2	)
Net Assets	$	88,232
CLASS I:
Net Assets	$	45,960
Net Asset Value, Offering and Redemption Price Per Share Applicable to 5,925,695 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	7.76
CLASS II:
Net Assets	$	42,272
Net Asset Value, Offering and Redemption Price Per Share Applicable to 5,493,217 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	7.70
(1) Including:
Securities on Loan, at Value:	$	6,560

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Global Infrastructure Portfolio

Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $134 of Foreign Taxes Withheld)	$	1,876
Dividends from Security of Affiliated Issuer (Note H)		16
Income from Securities Loaned — Net		8
Total Investment Income		1,900
Expenses:
Advisory Fees (Note B)		379
Servicing Fees (Note D)		66
Professional Fees		61
Distribution Fees — Class II Shares (Note E)		53
Administration Fees (Note C)		36
Custodian Fees (Note G)		26
Shareholder Reporting Fees		9
Transfer Agency Fees (Note F)		3
Directors' Fees and Expenses		3
Pricing Fees		3
Other Expenses		6
Total Expenses		645
Waiver of Advisory Fees (Note B)		(203	)
Rebate from Morgan Stanley Affiliate (Note H)		(2	)
Net Expenses		440
Net Investment Income		1,460
Realized Gain (Loss):
Investments Sold		3,442
Foreign Currency Translation		(34	)
Net Realized Gain		3,408
Change in Unrealized Appreciation (Depreciation):
Investments		(6,790	)
Foreign Currency Translation		(3	)
Net Change in Unrealized Appreciation (Depreciation)		(6,793	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(3,385	)
Net Decrease in Net Assets Resulting from Operations	$	(1,925	)

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Global Infrastructure Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,460		$	2,688
Net Realized Gain		3,408			3,553
Net Change in Unrealized Appreciation (Depreciation)		(6,793	)		4,921
Net Increase (Decrease) in Net Assets Resulting from Operations		(1,925	)		11,162
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(1,193	)
Net Realized Gain		—			(2,396	)
Class II:
Net Investment Income		—			(921	)
Net Realized Gain		—			(2,005	)
Total Distributions		—			(6,515	)
Capital Share Transactions:(1)
Class I:
Subscribed		700			1,883
Distributions Reinvested		—			3,589
Redeemed		(3,870	)		(9,806	)
Class II:
Subscribed		3,439			13,845
Distributions Reinvested		—			2,926
Redeemed		(5,462	)		(11,267	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(5,193	)		1,170
Total Increase (Decrease) in Net Assets		(7,118	)		5,817
Net Assets:
Beginning of Period		95,350			89,533
End of Period (Including Accumulated Undistributed Net Investment Income of $4,158 and $2,698)	$	88,232		$	95,350
(1) Capital Share Transactions:
Class I:
Shares Subscribed		91			241
Shares Issued on Distributions Reinvested		—			474
Shares Redeemed		(505	)		(1,249	)
Net Decrease in Class I Shares Outstanding		(414	)		(534	)
Class II:
Shares Subscribed		453			1,774
Shares Issued on Distributions Reinvested		—			389
Shares Redeemed		(720	)		(1,441	)
Net Increase (Decrease) in Class II Shares Outstanding		(267	)		722

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Global Infrastructure Portfolio

	Class I
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(2)			2015			2014(1)			2013
Net Asset Value, Beginning of Period	$	7.91		$	7.53		$	7.08		$	9.31		$	9.64		$	9.19
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.13			0.23			0.22			0.22			0.20			0.20
Net Realized and Unrealized Gain (Loss)		(0.28	)		0.72			0.88			(1.36	)		1.16			1.32
Total from Investment Operations		(0.15	)		0.95			1.10			(1.14	)		1.36			1.52
Distributions from and/or in Excess of:
Net Investment Income		—			(0.19	)		(0.18	)		(0.16	)		(0.25	)		(0.26	)
Net Realized Gain		—			(0.38	)		(0.47	)		(0.93	)		(1.44	)		(0.81	)
Total Distributions		—			(0.57	)		(0.65	)		(1.09	)		(1.69	)		(1.07	)
Net Asset Value, End of Period	$	7.76		$	7.91		$	7.53		$	7.08		$	9.31		$	9.64
Total Return(4)		(1.90	)%(7)		12.96	%		15.27	%		(13.76	)%		15.63	%		17.91	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	45,960		$	50,116		$	51,786		$	52,323		$	72,815		$	57,746
Ratio of Expenses to Average Net Assets(9)		0.87	%(5)(8)		0.86	%(5)		0.86	%(5)		0.87	%(5)		0.87	%(5)		0.90	%(5)
Ratio of Net Investment Income to Average Net Assets(9)		3.39	%(5)(8)		2.98	%(5)		2.87	%(5)		2.56	%(5)		2.12	%(5)		2.12	%(5)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%(6)(8)		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		30	%(7)		43	%		51	%		50	%		40	%		25	%
(9) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.33	%(8)		1.34	%		1.29	%		1.35	%		1.26	%		N/A
Net Investment Income to Average Net Assets		2.93	%(8)		2.50	%		2.44	%		2.08	%		1.73	%		N/A

(1)  On April 28, 2014, the Fund acquired substantially all of the assets and liabilities of the Morgan Stanley Select Dimensions Investment Series — Global Infrastructure Portfolio ("SD Global Infrastructure") and Morgan Stanley Variable Investment Series — Global Infrastructure Portfolio ("VIS Global Infrastructure"). The Fund adopted the financial and performance history of VIS Global Infrastructure. Therefore, the per share data and the ratios of Class I shares reflect the historical per share data of Class X shares of VIS Global Infrastructure for periods prior to April 28, 2014.

(2)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(5)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Global Infrastructure Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(2)			2015			2014(1)			2013
Net Asset Value, Beginning of Period	$	7.85		$	7.49		$	7.05		$	9.27		$	9.60		$	9.16
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.12			0.21			0.20			0.19			0.17			0.17
Net Realized and Unrealized Gain (Loss)		(0.27	)		0.71			0.87			(1.34	)		1.16			1.32
Total from Investment Operations		(0.15	)		0.92			1.07			(1.15	)		1.33			1.49
Distributions from and/or in Excess of:
Net Investment Income		—			(0.18	)		(0.16	)		(0.14	)		(0.22	)		(0.24	)
Net Realized Gain		—			(0.38	)		(0.47	)		(0.93	)		(1.44	)		(0.81	)
Total Distributions		—			(0.56	)		(0.63	)		(1.07	)		(1.66	)		(1.05	)
Net Asset Value, End of Period	$	7.70		$	7.85		$	7.49		$	7.05		$	9.27		$	9.60
Total Return(4)		(2.04	)%(7)		12.54	%		14.97	%		(13.88	)%		15.28	%		17.54	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	42,272		$	45,234		$	37,747		$	23,427		$	24,330		$	14,511
Ratio of Expenses to Average Net Assets(9)		1.12	%(5)(8)		1.11	%(5)		1.11	%(5)		1.12	%(5)		1.12	%(5)		1.15	%(5)
Ratio of Net Investment Income to Average Net Assets(9)		3.14	%(5)(8)		2.73	%(5)		2.62	%(5)		2.31	%(5)		1.87	%(5)		1.87	%(5)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%(6)(8)		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		30	%(7)		43	%		51	%		50	%		40	%		25	%
(9) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.58	%(8)		1.59	%		1.54	%		1.63	%		1.59	%		N/A
Net Investment Income to Average Net Assets		2.68	%(8)		2.25	%		2.19	%		1.80	%		1.40	%		N/A

(1)  On April 28, 2014, the Fund acquired substantially all of the assets and liabilities of the Morgan Stanley Select Dimensions Investment Series — Global Infrastructure Portfolio ("SD Global Infrastructure") and Morgan Stanley Variable Investment Series — Global Infrastructure Portfolio ("VIS Global Infrastructure"). The Fund adopted the financial and performance history of VIS Global Infrastructure. Therefore, the per share data and the ratios of Class II shares reflect the historical per share data of Class Y shares of VIS Global Infrastructure for periods prior to April 28, 2014.

(2)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(5)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Infrastructure Portfolio. The Fund seeks both capital appreciation and current income. The Fund offers two classes of shares — Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is

valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), each a wholly-owned subsidiary of Morgan Stanley, determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated

10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Airports	$	4,239	$	—	$	—	$	4,239
Communications		7,673		—		—		7,673
Diversified		8,377		—		—		8,377
Electricity Transmission & Distribution		11,708		—		—		11,708
Oil & Gas Storage & Transportation		26,567		—		—		26,567
Railroads		5,092		—		—		5,092
Renewables		6,006		—		—		6,006
Toll Roads		12,010		—		—		12,010
Water		4,780		—		—		4,780
Total Common Stocks		86,452		—		—		86,452
Short-Term Investments
Investment Company		1,648		—		—		1,648
Repurchase Agreements		—		37		—		37
Total Short-Term Investments		1,648		37		—		1,685
Total Assets	$	88,100	$	37	$	—	$	88,137

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, securities with a total value of approximately $33,269,000 transferred from Level 2 to Level 1. Securities that were valued using other significant observable inputs at December 31, 2017 were valued using unadjusted quoted prices at June 30, 2018. At December 31, 2017, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued

interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized

12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	6,560	(a)	$	—	$	(6,560	)(b)(c)	$	0

(a)  Represents market value of loaned securities at period end.

(b)  The Fund received cash collateral of approximately $207,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2018, there was uninvested cash of less than $500, which is not reflected in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $6,405,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(c)  The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2018:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	207	$	—	$	—	$	—	$	207
Total Borrowings	$	207	$	—	$	—	$	—	$	207
Gross amount of recognized liabilities for securities lending transactions									$207

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund owns shares of real estate investment trusts ("REITs"), which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally

associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Fund holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Fund to further risk of loss in the event of a failure to complete the transaction by the counterparty.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.85% of the daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.87% for Class I shares and 1.12% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2018, approximately $203,000 of advisory fees were waived pursuant to this arrangement.

The Adviser has entered into Sub-Advisory Agreements with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Fund with advisory services subject to the overall supervision of the Adviser and the Company's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares.

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $25,896,000 and $27,693,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2018.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by ap-

proximately $2,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	7,023	$	17,366	$	22,741	$	16

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	1,648

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign

15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	2,199	$	4,316	$	1,856	$	5,082

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and REIT basis adjustments, resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Undistributed Net Investment Income (000)			Accumulated Undistributed Net Realized Gain (000)		Paid-in- Capital (000)
$	(225	)	$	225	$	—

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	3,078	$	2,899

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 62.0%.

16

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Advisers and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that while the Fund's contractual management fee was higher than its peer group average, the Fund's actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was competitive with its peer group average and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which does not include breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

17

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited) (cont'd)

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

18

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
30 Rockefeller Plaza
New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFGINSAN
2190890 EXP. 08.31.19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Global Franchise Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Expense Example		2
Portfolio of Investments		3
Statement of Assets and Liabilities		4
Statement of Operations		5
Statements of Changes in Net Assets		6
Financial Highlights		7
Notes to Financial Statements		8
Investment Advisory Agreement Approval		14
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Expense Example (unaudited)

Global Franchise Portfolio

As a shareholder of the Global Franchise Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Franchise Portfolio Class II	$	1,000.00	$	1,033.50	$	1,018.84	$	6.05	$	6.01		1.20	%

*  Expenses are calculated using the Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments

Global Franchise Portfolio

	Shares		Value (000)
Common Stocks (98.6%)
France (7.7%)
L'Oreal SA		6,372	$	1,574
Pernod Ricard SA		7,891		1,289
				2,863
Germany (4.4%)
SAP SE		14,252		1,647
Italy (1.4%)
Davide Campari-Milano SpA		62,907		518
Netherlands (4.0%)
Heineken N.V.		10,013		1,006
RELX N.V.		21,875		466
				1,472
United Kingdom (24.5%)
British American Tobacco PLC		33,057		1,671
Experian PLC		34,502		853
Reckitt Benckiser Group PLC		35,545		2,927
RELX PLC		44,589		955
Unilever PLC		48,202		2,667
				9,073
United States (56.6%)
Abbott Laboratories		16,625		1,014
Accenture PLC, Class A		15,101		2,470
Altria Group, Inc.		13,452		764
Automatic Data Processing, Inc.		8,847		1,187
Baxter International, Inc.		2,544		188
Coca-Cola Co. (The)		30,689		1,346
Danaher Corp.		11,508		1,136
Factset Research Systems, Inc.		2,409		477
Fidelity National Information Services, Inc.		7,471		792
Microsoft Corp.		25,690		2,533
Moody's Corp.		2,845		485
NIKE, Inc., Class B		14,031		1,118
Philip Morris International, Inc.		20,223		1,633
Twenty-First Century Fox, Inc., Class A		31,950		1,588
Twenty-First Century Fox, Inc., Class B		24,446		1,204
Visa, Inc., Class A		12,949		1,715
Zoetis, Inc.		15,776		1,344
				20,994
Total Common Stocks (Cost $24,317)				36,567

	Shares		Value (000)
Short-Term Investment (1.5%)
Investment Company (1.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note H) (Cost $554)		554,186	$	554
Total Investments (100.1%) (Cost $24,871) (a)				37,121
Liabilities in Excess of Other Assets (-0.1%)				(21	)
Net Assets (100.0%)			$	37,100

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $12,591,000 and the aggregate gross unrealized depreciation is approximately $341,000, resulting in net unrealized appreciation of approximately $12,250,000.

Portfolio Composition

Classification	Percentage of Total Investments
Information Technology Services		16.6	%
Personal Products		11.4
Software		11.3
Beverages		11.2
Tobacco		11.0
Other*		10.7
Household Products		7.9
Media		7.5
Health Care Equipment & Supplies		6.3
Professional Services		6.1
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Global Franchise Portfolio

Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $24,317)	$	36,567
Investment in Security of Affiliated Issuer, at Value (Cost $554)		554
Total Investments in Securities, at Value (Cost $24,871)		37,121
Dividends Receivable		88
Tax Reclaim Receivable		36
Receivable from Affiliate		1
Other Assets		17
Total Assets		37,263
Liabilities:
Payable for Fund Shares Redeemed		62
Payable for Professional Fees		41
Payable for Advisory Fees		28
Payable for Servicing Fees		12
Payable for Distribution Fees — Class II Shares		8
Payable for Custodian Fees		2
Payable for Administration Fees		2
Payable for Transfer Agency Fees		1
Other Liabilities		7
Total Liabilities		163
NET ASSETS	$	37,100
Net Assets Consist of:
Paid-in-Capital	$	15,237
Accumulated Undistributed Net Investment Income		584
Accumulated Undistributed Net Realized Gain		9,029
Unrealized Appreciation (Depreciation) on:
Investments		12,250
Foreign Currency Translation		—-	@
Net Assets	$	37,100
CLASS II:
Net Asset Value, Offering and Redemption Price Per Share Applicable to 2,615,177 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	14.19

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Global Franchise Portfolio

Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $11 of Foreign Taxes Withheld)	$	429
Dividends from Security of Affiliated Issuer (Note H)		4
Total Investment Income		433
Expenses:
Advisory Fees (Note B)		150
Professional Fees		55
Distribution Fees — Class II Shares (Note E)		47
Servicing Fees (Note D)		25
Administration Fees (Note C)		15
Custodian Fees (Note G)		9
Shareholder Reporting Fees		7
Directors' Fees and Expenses		2
Transfer Agency Fees (Note F)		2
Pricing Fees		1
Other Expenses		7
Total Expenses		320
Waiver of Advisory Fees (Note B)		(95	)
Rebate from Morgan Stanley Affiliate (Note H)		(1	)
Net Expenses		224
Net Investment Income		209
Realized Gain (Loss):
Investments Sold		3,141
Foreign Currency Translation		(8	)
Net Realized Gain		3,133
Change in Unrealized Appreciation (Depreciation):
Investments		(2,147	)
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		(2,148	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		985
Net Increase in Net Assets Resulting from Operations	$	1,194

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Global Franchise Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	209		$	377
Net Realized Gain		3,133			6,023
Net Change in Unrealized Appreciation (Depreciation)		(2,148	)		2,547
Net Increase in Net Assets Resulting from Operations		1,194			8,947
Distributions from and/or in Excess of:
Class II:
Net Investment Income		—			(505	)
Net Realized Gain		—			(4,878	)
Total Distributions		—			(5,383	)
Capital Share Transactions:(1)
Class II:
Subscribed		186			563
Distributions Reinvested		—			5,383
Redeemed		(3,598	)		(8,033	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(3,412	)		(2,087	)
Total Increase (Decrease) in Net Assets		(2,218	)		1,477
Net Assets:
Beginning of Period		39,318			37,841
End of Period (Including Accumulated Undistributed Net Investment Income of $584 and $375)	$	37,100		$	39,318
(1) Capital Share Transactions:
Class II:
Shares Subscribed		13			42
Shares Issued on Distributions Reinvested		—			425
Shares Redeemed		(261	)		(596	)
Net Decrease in Class II Shares Outstanding		(248	)		(129	)

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Global Franchise Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	13.73		$	12.64		$	14.02		$	16.04		$	18.31		$	17.26
Income from Investment Operations:
Net Investment Income(2)		0.08			0.13			0.16			0.19			0.30			0.25
Net Realized and Unrealized Gain		0.38			2.96			0.63			0.76			0.57			2.93
Total from Investment Operations		0.46			3.09			0.79			0.95			0.87			3.18
Distributions from and/or in Excess of:
Net Investment Income		—			(0.19	)		(0.21	)		(0.35	)		(0.39	)		(0.50	)
Net Realized Gain		—			(1.81	)		(1.96	)		(2.62	)		(2.75	)		(1.63	)
Total Distributions		—			(2.00	)		(2.17	)		(2.97	)		(3.14	)		(2.13	)
Net Asset Value, End of Period	$	14.19		$	13.73		$	12.64		$	14.02		$	16.04		$	18.31
Total Return(3)		3.35	%(6)		25.75	%		5.42	%		6.20	%		4.51	%		19.66	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	37,100		$	39,318		$	37,841		$	45,673		$	53,347		$	67,209
Ratio of Expenses to Average Net Assets(8)		1.20	%(4)(7)		1.20	%(4)		1.20	%(4)		1.20	%(4)		1.20	%(4)		1.20	%(4)
Ratio of Net Investment Income to Average Net Assets(8)		1.11	%(4)(7)		0.96	%(4)		1.19	%(4)		1.25	%(4)		1.73	%(4)		1.66	%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		18	%(6)		26	%		24	%		26	%		20	%		17	%
(8) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.70	%(7)		1.73	%		1.60	%		1.65	%		1.66	%		1.63	%
Net Investment Income to Average Net Assets		0.61	%(7)		0.43	%		0.79	%		0.80	%		1.27	%		1.23	%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Franchise Portfolio. The Company seeks long-term capital appreciation. The Fund currently offers Class II shares only, although Class I shares may be offered in the future.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are

unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

  The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

  The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to

distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	4,159	$	—	$	—	$	4,159
Capital Markets		962		—		—		962
Health Care Equipment & Supplies		2,338		—		—		2,338
Household Products		2,927		—		—		2,927

9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Information Technology Services	$	6,164	$	—	$	—	$	6,164
Media		2,792		—		—		2,792
Personal Products		4,241		—		—		4,241
Pharmaceuticals		1,344		—		—		1,344
Professional Services		2,274		—		—		2,274
Software		4,180		—		—		4,180
Textiles, Apparel & Luxury Goods		1,118		—		—		1,118
Tobacco		4,068		—		—		4,068
Total Common Stocks		36,567		—		—		36,567
Short-Term Investment
Investment Company		554		—		—		554
Total Assets	$	37,121	$	—	$	—	$	37,121

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, securities with a total value of approximately $14,567,000 transferred from Level 2 to Level 1. Securities that were valued using other significant observable inputs at December 31, 2017 were valued using unadjusted quoted prices at June 30, 2018. At December 31, 2017, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of

changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

4.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Fund holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Fund to further risk of loss in the event of a failure to complete the transaction by the counterparty.

6.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.80	%		0.75	%		0.70	%

For the six months ended June 30, 2018, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.29% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that the total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.20% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2018, approximately $95,000 of advisory fees were waived pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and

11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares.

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $6,835,000 and $10,062,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2018.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	653	$	3,505	$	3,604	$	4

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	554

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as

well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of

12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	505	$	4,878	$	612	$	5,783

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Undistributed Net Investment Income (000)			Accumulated Undistributed Net Realized Gain (000)		Paid-in- Capital (000)
$	(9	)	$	9	$	—

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	439	$	5,927

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 87.8%.

13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one- and five-year periods but better than its peer group average for the three-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee was higher than but close to its peer group average, the actual management fee was lower than its peer group average and the Fund's total expense ratio was higher than its peer group average. After discussion, the Board concluded that the Fund's (i) performance was acceptable, (ii) management fee was competitive with its peer group average and (iii) total expense ratio was acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited) (cont'd)

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.

522 Fifth Avenue

New York, New York 10036

Sub-Adviser

Morgan Stanley Investment Management Limited

25 Cabot Square, Canary Wharf

London, E14 4QA, England

Distributor

Morgan Stanley Distribution, Inc.

522 Fifth Avenue

New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.

2000 Crown Colony Drive

Quincy, Massachusetts 02169

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Custodian

State Street Bank and Trust Company

One Lincoln Street

Boston, Massachusetts 02111

Legal Counsel

Dechert LLP

1095 Avenue of the Americas

New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP

30 Rockefeller Plaza

New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP

200 Clarendon Street

Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

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You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFGFSAN
2190880 EXP. 08.31.19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Global Real Estate Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Expense Example		2
Portfolio of Investments		3
Statement of Assets and Liabilities		6
Statement of Operations		7
Statements of Changes in Net Assets		8
Financial Highlights		9
Notes to Financial Statements		10
Investment Advisory Agreement Approval		17
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Expense Example (unaudited)

Global Real Estate Portfolio

As a shareholder of the Global Real Estate Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Real Estate Portfolio Class II	$	1,000.00	$	1,000.90	$	1,017.85	$	6.95	$	7.00		1.40	%

*  Expenses are calculated using the Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments

Global Real Estate Portfolio

	Shares		Value (000)
Common Stocks (99.2%)
Australia (3.7%)
Dexus REIT		63,464	$	456
Goodman Group REIT		67,538		481
GPT Group (The) REIT		75,007		281
Mirvac Group REIT		154,334		248
Scentre Group REIT		256,198		832
Stockland REIT		83,375		245
Vicinity Centres REIT		167,270		320
				2,863
Austria (0.1%)
Atrium European Real Estate Ltd. (a)		22,066		100
Canada (1.6%)
Boardwalk REIT		3,564		124
Crombie Real Estate Investment Trust REIT		9,771		95
Extendicare, Inc.		3,100		17
First Capital Realty, Inc.		22,042		346
H&R Real Estate Investment Trust REIT		7,133		109
RioCan Real Estate Investment Trust REIT		24,556		451
SmartCentres Real Estate Investment Trust REIT		3,250		76
				1,218
China (0.9%)
A-Living Services Co., Ltd. H Share (a)(b)(c)		17,250		32
China Overseas Land & Investment Ltd. (b)		72,000		237
China Resources Land Ltd. (b)		14,000		47
China Vanke Co., Ltd. H Shares (b)		28,600		100
Country Garden Holdings Co., Ltd. (b)		66,000		116
Country Garden Services Holdings Co. Ltd. (a)(b)		6,206		8
Guangzhou R&F Properties Co., Ltd. H Shares (b)		81,200		164
Longfor Properties Co., Ltd. (b)		4,000		11
				715
Finland (0.4%)
Citycon Oyj		67,064		145
Kojamo Oyj (a)		15,587		167
				312
France (4.7%)
Carmila SA REIT		1,921		53
Covivio REIT		1,507		157
Gecina SA REIT		3,451		577
ICADE REIT		2,603		244
Klepierre SA REIT		18,709		705
Mercialys SA REIT		14,391		251
Unibail-Rodamco-Westfield REIT (a)		1,865		411
Unibail-Rodamco-Westfield REIT		5,588		1,230
				3,628
Germany (2.4%)
ADO Properties SA		1,386		75
Alstria Office AG REIT		5,731		86
Deutsche EuroShop AG		1,342		48
Deutsche Wohnen SE		11,054		535
LEG Immobilien AG		1,944		211
Vonovia SE		19,577		932
				1,887

	Shares		Value (000)
Hong Kong (12.2%)
Champion REIT		328,000	$	218
CK Asset Holdings Ltd.		113,500		902
Henderson Land Development Co., Ltd.		36,666		194
Hongkong Land Holdings Ltd.		192,900		1,379
Hysan Development Co., Ltd.		110,921		619
Link REIT		164,664		1,504
New World Development Co., Ltd.		310,585		437
Sino Land Co., Ltd.		152,000		247
Sun Hung Kai Properties Ltd.		117,893		1,779
Swire Properties Ltd.		263,700		975
Wharf Holdings Ltd. (The)		144,816		465
Wharf Real Estate Investment Co., Ltd.		101,420		722
				9,441
Ireland (0.5%)
Green REIT PLC		165,136		285
Hibernia REIT PLC		59,886		105
				390
Italy (0.0%)
Beni Stabili SpA SIIQ REIT		33,126		29
Japan (8.1%)
Activia Properties, Inc. REIT		42		193
Advance Residence Investment Corp. REIT		84		215
Daiwa Office Investment Corp. REIT		8		46
GLP J-REIT		244		259
Hulic Co., Ltd.		27,600		295
Hulic REIT, Inc.		17		26
Invincible Investment Corp. REIT		322		145
Japan Hotel REIT Investment Corp.		153		115
Japan Real Estate Investment Corp. REIT		70		371
Japan Retail Fund Investment Corp. REIT		173		312
Kenedix Office Investment Corp. REIT		8		50
Mitsubishi Estate Co., Ltd.		74,200		1,298
Mitsui Fudosan Co., Ltd.		55,700		1,345
Nippon Building Fund, Inc. REIT		92		531
Nippon Prologis, Inc. REIT		23		48
Nomura Real Estate Master Fund, Inc. REIT		241		340
Orix, Inc. J-REIT		15		24
Sumitomo Realty & Development Co., Ltd.		12,000		443
United Urban Investment Corp. REIT		149		231
				6,287
Malta (0.0%)
BGP Holdings PLC (a)(d)(e)		5,886,464		7
Netherlands (0.5%)
Eurocommercial Properties N.V. CVA REIT		9,454		401
Norway (0.4%)
Entra ASA		20,313		277
Norwegian Property ASA		35,401		47
				324
Singapore (1.0%)
APAC Realty Ltd.		131,500		80
Ascendas Real Estate Investment Trust REIT		68,200		132

The accompanying notes are an integral part of the financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

	Shares		Value (000)
Singapore (cont'd)
CapitaLand Commercial Trust REIT		116,692	$	142
CapitaLand Mall Trust REIT		89,400		136
EC World Real Estate Investment Trust Unit REIT		8,700		5
Keppel REIT		128,047		104
Mapletree Logistics Trust REIT		24,300		22
Suntec Real Estate Investment Trust REIT		53,000		67
UOL Group Ltd.		14,874		83
				771
Spain (0.9%)
Hispania Activos Inmobiliarios SOCIMI SA REIT		4,076		87
Inmobiliaria Colonial Socimi SA REIT		7,820		87
Merlin Properties Socimi SA REIT		34,810		506
				680
Sweden (0.9%)
Atrium Ljungberg AB, Class B		7,539		121
Castellum AB		9,814		159
Hufvudstaden AB, Class A		22,476		322
Kungsleden AB		9,245		64
				666
Switzerland (0.5%)
PSP Swiss Property AG (Registered)		4,304		400
United Kingdom (5.6%)
British Land Co., PLC (The) REIT		114,263		1,014
Capital & Regional PLC REIT		1,876		1
Derwent London PLC REIT		15,875		651
Grainger PLC		9,665		39
Great Portland Estates PLC REIT		62,456		589
Hammerson PLC REIT		35,948		248
Intu Properties PLC REIT		41,547		99
Land Securities Group PLC REIT		92,230		1,165
LXB Retail Properties PLC (a)		137,376		40
Segro PLC REIT		6,714		59
Shaftesbury PLC REIT		7,075		87
St. Modwen Properties PLC		35,760		198
Urban & Civic PLC		23,677		108
				4,298
United States (54.8%)
Alexandria Real Estate Equities, Inc. REIT		2,470		312
American Campus Communities, Inc. REIT		6,770		290
American Homes 4 Rent, Class A REIT		38,956		864
Apartment Investment & Management Co., Class A REIT		7,880		333
AvalonBay Communities, Inc. REIT		9,783		1,682
Blackstone Mortgage Trust, Inc., Class A REIT		6,670		210
Boston Properties, Inc. REIT		22,160		2,779
Brandywine Realty Trust REIT		21,330		360
Brixmor Property Group, Inc. REIT		42,995		749
Camden Property Trust REIT		9,034		823
Chesapeake Lodging Trust REIT		16,469		521
Columbia Property Trust, Inc. REIT		13,575		308
Corporate Office Properties Trust REIT		9,755		283

	Shares		Value (000)
Cousins Properties, Inc. REIT		25,535	$	247
CubeSmart REIT		21,909		706
DCT Industrial Trust, Inc. REIT		16,826		1,123
DDR Corp. REIT		3,380		61
Digital Realty Trust, Inc. REIT		3,620		404
Douglas Emmett, Inc. REIT		2,305		93
Duke Realty Corp. REIT		13,681		397
Education Realty Trust, Inc. REIT		2,441		101
Equity Residential REIT		20,503		1,306
Essex Property Trust, Inc. REIT		2,655		635
Extra Space Storage, Inc. REIT		3,510		350
Federal Realty Investment Trust REIT		831		105
Forest City Realty Trust, Inc., Class A REIT		10,096		230
Gaming and Leisure Properties, Inc. REIT		7,545		270
GGP, Inc. REIT		75,310		1,539
HCP, Inc. REIT		42,465		1,096
Healthcare Realty Trust, Inc. REIT		33,544		975
Healthcare Trust of America, Inc., Class A REIT		12,608		340
Host Hotels & Resorts, Inc. REIT		50,013		1,054
Hudson Pacific Properties, Inc. REIT		7,631		270
Invitation Homes, Inc. REIT		8,009		185
JBG SMITH Properties REIT		8,106		296
Kilroy Realty Corp. REIT		6,342		480
Kimco Realty Corp. REIT		19,710		335
Ladder Capital Corp. REIT		12,060		188
Liberty Property Trust REIT		5,089		226
Life Storage, Inc. REIT		2,895		282
Macerich Co. (The) REIT		11,308		643
Mack-Cali Realty Corp. REIT		36,735		745
Mid-America Apartment Communities, Inc. REIT		7,000		705
Paramount Group, Inc. REIT		71,058		1,094
Pennsylvania Real Estate Investment Trust REIT		11,118		122
ProLogis, Inc. REIT		19,369		1,272
Public Storage REIT		6,221		1,411
QTS Realty Trust, Inc., Class A REIT		14,479		572
Regency Centers Corp. REIT		21,264		1,320
Rexford Industrial Realty, Inc. REIT		10,455		328
RLJ Lodging Trust REIT		14,635		323
Simon Property Group, Inc. REIT		29,850		5,080
SL Green Realty Corp. REIT		26,674		2,682
Tier REIT, Inc. REIT		9,870		235
UDR, Inc. REIT		8,603		323
Ventas, Inc. REIT		8,390		478
Vornado Realty Trust REIT		27,198		2,010
Welltower, Inc. REIT		5,314		333
				42,484
Total Common Stocks (Cost $59,459)				76,901

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

	Shares		Value (000)
Short-Term Investment (0.4%)
Investment Company (0.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note H) (Cost $300)		300,390	$	300
Total Investments (99.6%) (Cost $59,759) (f)				77,201
Other Assets in Excess of Liabilities (0.4%)				273
Net Assets (100.0%)			$	77,474

  Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(d)  At June 30, 2018, the Fund held a fair valued security valued at approximately $7,000, representing less than 0.05% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's Directors.

(e)  Security has been deemed illiquid at June 30, 2018.

(f)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $18,310,000 and the aggregate gross unrealized depreciation is approximately $868,000, resulting in net unrealized appreciation of approximately $17,442,000.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		28.1	%
Retail		23.5
Office		19.4
Residential		13.0
Other*		10.4
Industrial		5.6
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Global Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $59,459)	$	76,901
Investment in Security of Affiliated Issuer, at Value (Cost $300)		300
Total Investments in Securities, at Value (Cost $59,759)		77,201
Foreign Currency, at Value (Cost $185)		185
Dividends Receivable		301
Receivable for Investments Sold		160
Tax Reclaim Receivable		78
Receivable for Fund Shares Sold		9
Receivable from Affiliate		1
Other Assets		19
Total Assets		77,954
Liabilities:
Payable for Investments Purchased		119
Payable for Advisory Fees		118
Payable for Fund Shares Redeemed		117
Payable for Professional Fees		43
Payable for Custodian Fees		20
Payable for Servicing Fees		20
Payable for Distribution Fees — Class II Shares		16
Payable for Administration Fees		5
Payable for Transfer Agency Fees		1
Other Liabilities		21
Total Liabilities		480
NET ASSETS	$	77,474
Net Assets Consist of:
Paid-in-Capital	$	59,466
Accumulated Undistributed Net Investment Income		1,770
Accumulated Net Realized Loss		(1,204	)
Unrealized Appreciation (Depreciation) on:
Investments		17,442
Foreign Currency Translation		—	@
Net Assets	$	77,474
CLASS II:
Net Asset Value, Offering and Redemption Price Per Share Applicable to 6,982,580 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	11.10

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Global Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $73 of Foreign Taxes Withheld)	$	1,499
Dividends from Security of Affiliated Issuer (Note H)		3
Total Investment Income		1,502
Expenses:
Advisory Fees (Note B)		327
Distribution Fees — Class II Shares (Note E)		96
Servicing Fees (Note D)		65
Professional Fees		57
Custodian Fees (Note G)		34
Administration Fees (Note C)		31
Shareholder Reporting Fees		11
Pricing Fees		6
Transfer Agency Fees (Note F)		2
Directors' Fees and Expenses		2
Other Expenses		9
Total Expenses		640
Waiver of Advisory Fees (Note B)		(101	)
Rebate from Morgan Stanley Affiliate (Note H)		(—	@)
Net Expenses		539
Net Investment Income		963
Realized Gain (Loss):
Investments Sold		2,919
Foreign Currency Translation		(5	)
Net Realized Gain		2,914
Change in Unrealized Appreciation (Depreciation):
Investments		(3,970	)
Foreign Currency Translation		(6	)
Net Change in Unrealized Appreciation (Depreciation)		(3,976	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(1,062	)
Net Decrease in Net Assets Resulting from Operations	$	(99	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Global Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	963		$	1,887
Net Realized Gain		2,914			5,082
Net Change in Unrealized Appreciation (Depreciation)		(3,976	)		676
Net Increase (Decrease) in Net Assets Resulting from Operations		(99	)		7,645
Distributions from and/or in Excess of:
Class II:
Net Investment Income		—			(2,013	)
Capital Share Transactions:(1)
Class II:
Subscribed		3,460			9,182
Distributions Reinvested		—			2,013
Redeemed		(9,512	)		(19,449	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(6,052	)		(8,254	)
Total Decrease in Net Assets		(6,151	)		(2,622	)
Net Assets:
Beginning of Period		83,625			86,247
End of Period (Including Accumulated Undistributed Net Investment Income of $1,770 and $807)	$	77,474		$	83,625
(1) Capital Share Transactions:
Class II:
Shares Subscribed		323			861
Shares Issued on Distributions Reinvested		—			193
Shares Redeemed		(884	)		(1,833	)
Net Decrease in Class II Shares Outstanding		(561	)		(779	)

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Global Real Estate Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	11.09		$	10.36		$	10.18		$	10.57		$	9.35		$	9.46
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.13			0.24			0.16			0.14			0.16			0.13
Net Realized and Unrealized Gain (Loss)		(0.12	)		0.75			0.16			(0.29	)		1.13			0.12
Total from Investment Operations		0.01			0.99			0.32			(0.15	)		1.29			0.25
Distributions from and/or in Excess of:
Net Investment Income		—			(0.26	)		(0.14	)		(0.24	)		(0.07	)		(0.36	)
Net Asset Value, End of Period	$	11.10		$	11.09		$	10.36		$	10.18		$	10.57		$	9.35
Total Return(3)		0.09	%(6)		9.71	%		3.12	%		(1.42	)%		13.85	%		2.63	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	77,474		$	83,625		$	86,247		$	94,884		$	104,996		$	96,717
Ratio of Expenses to Average Net Assets(8)		1.40	%(4)(7)		1.40	%(4)		1.40	%(4)		1.40	%(4)		1.40	%(4)		1.40	%(4)
Ratio of Net Investment Income to Average Net Assets(8)		2.51	%(4)(7)		2.26	%(4)		1.54	%(4)		1.80	%(4)		1.54	%(4)		1.36	%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		18	%(6)		34	%		24	%		26	%		31	%		30	%
(8) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.66	%(7)		1.69	%		1.60	%		1.67	%		1.72	%		1.69	%
Net Investment Income to Average Net Assets		2.25	%(7)		1.97	%		1.34	%		1.53	%		1.22	%		1.07	%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Real Estate Portfolio. The Fund seeks to provide current income and capital appreciation. The Fund currently offers Class II shares only, although Class I shares may be offered in the future.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that

does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), each a wholly-owned subsidiary of Morgan Stanley, determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional

10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis and reviews of any related market activity.

The Fund invests a significant portion of its assets in securities of REITs. The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Fund.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Diversified	$	21,697	$	—	$	—	$	21,697
Health Care		3,239		—		—		3,239
Industrial		4,352		—		—		4,352
Industrial/Office Mixed		64		—		—		64
Lodging/Resorts		2,013		—		—		2,013
Office		14,969		—		—		14,969
Residential		10,053		—		7		10,060
Retail		18,108		—		—		18,108
Self Storage		2,399		—		—		2,399
Total Common Stocks		76,894		—		7		76,901
Short-Term Investment
Investment Company		300		—		—		300
Total Assets	$	77,194	$	—	$	7	$	77,201

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, securities with a total value of approximately $29,572,000 transferred from Level 2 to Level 1.

Securities that were valued using other significant observable inputs at December 31, 2017 were valued using unadjusted quoted prices at June 30, 2018. At December 31, 2017, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)
Beginning Balance	$	7
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(—	@)
Realized gains (losses)		—
Ending Balance	$	7
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2018	$	(—	@)

@  Value is less than $500.

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2018:

	Fair Value at June 30, 2018 (000)		Valuation Technique	Unobservable Input	Range						Selected Value			Impact to Valuation from an increase in input
Residential
Common Stock	$	7	Market Transaction Method	Transaction Valuation	$	0.001		$	0.001		$	0.001		Increase
				Discount for Lack of Marketability		50.0	%		50.0	%		50.0	%	Decrease

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and

12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The

Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Fund holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Fund to further risk of loss in the event of a failure to complete the transaction by the counterparty.

6.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.85% of the

13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

daily net assets of the Fund. Effective July 1, 2018, the Adviser will provide the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.80% of the daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that the total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.40% for Class II shares. Effective July 1, 2018, the Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that the total annual operating expenses, excluding certain investment related expenses, taxes, interest, and other extraordinary expenses (including litigation), will not exceed 1.25% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2018, approximately $101,000 of advisory fees were waived pursuant to this arrangement.

The Adviser has entered into Sub-Advisory Agreements with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Fund with advisory services subject to the overall supervision of the Adviser and the Company's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares.

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $13,685,000 and $17,447,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2018.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	1,045	$	4,522	$	5,267	$	3

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	300

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	2,013	$	—	$	1,228	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, character differences on distributions from real estate investment trust securities, gains and basis adjustments on certain equity securities designated as issued by passive foreign investment companies and an expired capital loss carryforwards resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Undistributed Net Investment Income (000)		Accumulated Net Realized (Loss) (000)		Paid-in- Capital (000)
$	272	$	89,033	$	(89,305	)

15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	2,393	$	—

During the year ended December 31, 2017, capital loss carryforwards of approximately $89,305,000 expired for federal income tax purposes.

In addition, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $3,660,000 during the year ended December 31, 2017.

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 87.2%.

16

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Advisers and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee was higher than but close to its peer group average, the actual management fee was lower than its peer group average and the total expense ratio was higher than its peer group average. After discussion, the Board concluded that the Fund's (i) performance was acceptable, (ii) management fee was competitive with its peer group average and (iii) total expense ratio was acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which does not include breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

17

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited) (cont'd)

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

18

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.

2000 Crown Colony Drive

Quincy, Massachusetts 02169

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP

1095 Avenue of the Americas

New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP

30 Rockefeller Plaza

New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP

200 Clarendon Street

Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFGRESAN
2190974 EXP. 08.31.19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Global Strategist Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Consolidated Expense Example		2
Consolidated Portfolio of Investments		3
Consolidated Statement of Assets and Liabilities		28
Consolidated Statement of Operations		29
Consolidated Statements of Changes in Net Assets		30
Consolidated Financial Highlights		31
Notes to Consolidated Financial Statements		33
Investment Advisory Agreement Approval		46
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Consolidated Expense Example (unaudited)

Global Strategist Portfolio

As a shareholder of the Global Strategist Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which may include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Strategist Portfolio Class I	$	1,000.00	$	986.60	$	1,020.38	$	4.38	$	4.46		0.89	%
Global Strategist Portfolio Class II		1,000.00		986.50		1,019.89		4.88		4.96		0.99

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments

Global Strategist Portfolio

	Face Amount (000)		Value (000)
Fixed Income Securities (53.8%)
Agency Adjustable Rate Mortgage (0.1%)
United States (0.1%)
Federal Home Loan Mortgage Corporation, Conventional Pool: 12 Month USD LIBOR + 1.62%, 2.50%, 7/1/45 (Cost $75)	$	74	$	74
Agency Fixed Rate Mortgages (2.6%)
United States (2.6%)
Federal Home Loan Mortgage Corporation, Gold Pools: 3.50%, 2/1/45 - 6/1/45		439		438
July TBA: 3.50%, 7/1/48 (a)		600		597
Federal National Mortgage Association, Conventional Pools: 3.00%, 5/1/30 - 6/1/30		107		107
4.00%, 11/1/41 - 1/1/46		447		458
4.50%, 3/1/41 - 11/1/44		255		268
5.00%, 1/1/41 - 3/1/41		95		102
6.00%, 1/1/38		18		20
6.50%, 8/1/38		4		4
July TBA: 3.00%, 7/1/48 (a)		220		213
3.50%, 7/1/48 (a)		386		384
4.00%, 7/1/48 (a)		350		357
4.50%, 7/1/48 (a)		50		52
Government National Mortgage Association, July TBA: 4.50%, 7/20/48 (a)		50		52
Various Pool: 4.00%, 7/15/44		61		62
Total Agency Fixed Rate Mortgages (Cost $3,159)				3,114
Asset-Backed Securities (0.1%)
United States (0.1%)
Louisiana Public Facilities Authority 0.00%, 4/26/27 (b)		48		48
North Carolina State Education Assistance Authority 3 Month USD LIBOR + 0.80%, 3.16%, 7/25/25 (b)		43		44
Total Asset-Backed Securities (Cost $90)				92
Commercial Mortgage-Backed Securities (0.8%)
United States (0.8%)
COMM Mortgage Trust, 3.28%, 1/10/46		45		44
3.96%, 3/10/47		144		147
4.89%, 7/15/47 (b)(c)		100		89
Commercial Mortgage Pass-Through Certificates, 4.24%, 2/10/47 (b)		77		80
JPMBB Commercial Mortgage Securities Trust, 4.71%, 9/15/47 (b)(c)		102		85

		Face Amount (000)		Value (000)
UBS-Barclays Commercial Mortgage Trust, 3.53%, 5/10/63		$	40	$	40
Wells Fargo Commercial Mortgage Trust, 3.94%, 8/15/50 (c)			80		66
WFCG Commercial Mortgage Trust, 1 Month USD LIBOR + 3.14%, 5.21%, 11/15/29 (b)(c)			137		137
WFRBS Commercial Mortgage Trust, 4.14%, 10/15/57 (b)(c)			144		126
5.19%, 9/15/46 (b)(c)			140		131
Total Commercial Mortgage-Backed Securities (Cost $961)					945
Corporate Bonds (13.2%)
Australia (0.4%)
Australia & New Zealand Banking Group Ltd., 5.13%, 9/10/19		EUR	100		124
Macquarie Bank Ltd., 6.63%, 4/7/21 (c)		$	85		91
Macquarie Group Ltd., 4.15%, 3/27/24 (c)			50		50
Transurban Finance Co., Pty Ltd., 4.13%, 2/2/26 (c)			70		69
Woolworths Group Ltd., 4.00%, 9/22/20 (c)			150		152
					486
Belgium (0.1%)
Anheuser-Busch InBev Finance, Inc., 3.65%, 2/1/26			100		98
Canada (0.7%)
Goldcorp, Inc., 3.70%, 3/15/23			73		72
Province of Alberta Canada, 1.75%, 8/26/20			260		254
Province of British Columbia Canada, 2.00%, 10/23/22			260		250
Royal Bank of Canada, 2.75%, 2/1/22	��		250		246
					822
Chile (0.2%)
Banco del Estado de Chile, 2.67%, 1/8/21 (c)			200		195
China (0.5%)
Baidu, Inc., 2.88%, 7/6/22			200		193
3.25%, 8/6/18			225		225
Syngenta Finance N.V., 4.44%, 4/24/23 (c)			200		199
					617
Colombia (0.2%)
Ecopetrol SA, 5.88%, 9/18/23			230		244

The accompanying notes are an integral part of the consolidated financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Face Amount (000)		Value (000)
Corporate Bonds (cont'd)
France (1.0%)
Air Liquide Finance SA, 1.75%, 9/27/21 (c)	$	200	$	190
Banque Federative du Credit Mutuel SA, 2.00%, 9/19/19	EUR	200		240
BNP Paribas SA, 3.80%, 1/10/24 (c)	$	200		196
5.00%, 1/15/21		85		88
BPCE SA, 5.15%, 7/21/24 (c)		200		203
Electricite de France SA, 5.00%, 1/22/26 (d)	EUR	100		122
TOTAL SA, 3.88%, 5/18/22 (d)		100		126
				1,165
Germany (0.9%)
Bayer US Finance II LLC, 3.88%, 12/15/23 (c)	$	200		200
BMW US Capital LLC, 2.15%, 4/6/20 (c)		200		197
Deutsche Bank AG, 2.70%, 7/13/20		225		219
Deutsche Telekom International Finance BV, 3.60%, 1/19/27 (c)		150		142
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen, 6.00%, 5/26/41	EUR	100		134
Siemens Financieringsmaatschappij N.V., 2.15%, 5/27/20 (c)	$	250		246
				1,138
India (0.1%)
ONGC Videsh Vankorneft Pte Ltd., 3.75%, 7/27/26		200		187
Israel (0.1%)
Teva Pharmaceutical Finance Netherlands III BV, 2.20%, 7/21/21		120		111
Italy (0.2%)
FCA Bank SpA, 1.38%, 4/17/20	EUR	100		118
Intesa Sanpaolo SpA, 6.50%, 2/24/21 (c)	$	100		104
Telecom Italia Finance SA, 7.75%, 1/24/33	EUR	30		48
				270
Malaysia (0.2%)
Petronas Capital Ltd., 3.50%, 3/18/25 (c)	$	200		194

	Face Amount (000)		Value (000)
Netherlands (0.4%)
ABN AMRO Bank N.V., 2.88%, 6/30/25	EUR	100	$	121
Cooperatieve Rabobank UA, 3.88%, 2/8/22	$	50		51
Series G 3.75%, 11/9/20	EUR	50		63
ING Bank N.V., 5.80%, 9/25/23 (c)	$	200		212
				447
Spain (0.4%)
Banco Santander SA, 5.18%, 11/19/25		200		201
Telefonica Emisiones SAU, 4.71%, 1/20/20	EUR	200		251
				452
Sweden (0.2%)
Skandinaviska Enskilda Banken AB, 2.30%, 3/11/20	$	250		247
Switzerland (0.4%)
ABB Treasury Center USA, Inc., 4.00%, 6/15/21 (c)		50		51
Credit Suisse AG, 0.63%, 11/20/18	EUR	200		234
UBS Group Funding Switzerland AG, 3.49%, 5/23/23 (c)	$	200		196
				481
United Arab Emirates (0.2%)
ADCB Finance Cayman Ltd., 4.00%, 3/29/23 (c)		200		200
United Kingdom (1.3%)
BP Capital Markets PLC, 2.50%, 11/6/22		100		96
Heathrow Funding Ltd., 4.88%, 7/15/23 (c)		100		105
HSBC Holdings PLC, 4.25%, 3/14/24		200		199
Lloyds Bank PLC, 6.50%, 3/24/20	EUR	200		258
Nationwide Building Society, 3.77%, 3/8/24 (c)	$	200		196
NGG Finance PLC, 5.63%, 6/18/73	GBP	100		144
Royal Bank of Scotland Group PLC, 3.88%, 9/12/23	$	200		195
Standard Chartered PLC, 2.10%, 8/19/19 (c)		225		222
Vodafone Group PLC, 4.38%, 5/30/28		125		124
				1,539

The accompanying notes are an integral part of the consolidated financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Face Amount (000)		Value (000)
Corporate Bonds (cont'd)
United States (5.7%)
Abbott Laboratories, 3.40%, 11/30/23	$	125	$	124
Air Lease Corp., 2.13%, 1/15/20		150		147
Amazon.com, Inc., 2.80%, 8/22/24		150		145
American Express Credit Corp., MTN 2.20%, 3/3/20		125		123
3.30%, 5/3/27		125		121
American International Group, Inc., 4.88%, 6/1/22		50		52
Apple, Inc., 2.50%, 2/9/22		200		196
AT&T, Inc., 4.25%, 3/1/27		100		98
4.50%, 3/9/48		45		39
5.15%, 2/15/50 (c)		50		47
AvalonBay Communities, Inc., Series G 2.95%, 9/15/22		50		49
Bank of America Corp., 4.24%, 4/24/38		100		97
MTN 4.00%, 1/22/25		175		173
Becton Dickinson and Co., 2.89%, 6/6/22		125		121
Capital One NA, 1.85%, 9/13/19		250		247
Charter Communications Operating LLC/Charter Communications Operating Capital, 4.91%, 7/23/25		25		25
6.48%, 10/23/45		50		53
Citigroup, Inc., 5.50%, 9/13/25		75		80
8.13%, 7/15/39		75		106
Coca-Cola Co. (The), 3.20%, 11/1/23		100		100
CVS Health Corp., 3.70%, 3/9/23		200		199
Discover Bank, 3.10%, 6/4/20		255		254
Discovery Communications LLC, 2.95%, 3/20/23		100		96
Dollar Tree, Inc., 3.70%, 5/15/23		75		74
Duke Energy Corp., 1.80%, 9/1/21		100		96
Five Corners Funding Trust, 4.42%, 11/15/23 (c)		200		206
Ford Motor Credit Co., LLC, 2.68%, 1/9/20		200		198
General Motors Financial Co., Inc., 2.35%, 10/4/19		75		74

	Face Amount (000)		Value (000)
Goldman Sachs Group, Inc. (The), 2.30%, 12/13/19	$	80	$	79
6.75%, 10/1/37		125		149
Home Depot, Inc. (The), 5.88%, 12/16/36		50		61
HSBC USA, Inc., 3.50%, 6/23/24		100		98
Johnson Controls International PLC, 3.90%, 2/14/26		75		74
JPMorgan Chase & Co., 2.25%, 1/23/20		200		198
3.78%, 2/1/28		100		98
Lockheed Martin Corp., 3.55%, 1/15/26		100		98
Maple Escrow Subsidiary, Inc., 4.06%, 5/25/23 (c)		125		125
McDonald's Corp., MTN 3.38%, 5/26/25		100		98
Medtronic, Inc., 3.63%, 3/15/24		100		101
Merck & Co., Inc., 2.80%, 5/18/23		100		98
Metropolitan Life Global Funding I, 2.40%, 1/8/21 (c)		200		196
Microsoft Corp., 1.55%, 8/8/21		200		192
NBC Universal Media LLC, 4.38%, 4/1/21		130		133
NextEra Energy Capital Holdings, Inc., 3.55%, 5/1/27		125		120
Oncor Electric Delivery Co., LLC, 6.80%, 9/1/18		80		81
Oracle Corp., 3.40%, 7/8/24		75		74
PepsiCo, Inc., 3.60%, 3/1/24		100		101
Rockwell Collins, Inc., 1.95%, 7/15/19		100		99
salesforce.com, Inc., 3.25%, 4/11/23		100		100
Synchrony Bank, 3.65%, 5/24/21		250		250
Thermo Fisher Scientific, Inc., 2.95%, 9/19/26		100		93
Union Pacific Corp., 3.95%, 9/10/28		50		50
UnitedHealth Group, Inc., 2.88%, 3/15/23		100		98
Verizon Communications, Inc., 4.67%, 3/15/55		82		73
Visa, Inc., 3.15%, 12/14/25		75		73
Walmart, Inc., 2.55%, 4/11/23		50		48
Wells Fargo & Co., 3.00%, 10/23/26		325		300
				6,698
Total Corporate Bonds (Cost $15,863)				15,591

The accompanying notes are an integral part of the consolidated financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Face Amount (000)			Value (000)
Mortgages — Other (0.4%)
United States (0.4%)
Federal Home Loan Mortgage Corporation, 3.00%, 9/25/45 - 7/25/46	$	204		$	196
3.50%, 5/25/45 - 7/25/46		262			259
4.00%, 5/25/45		23			24
Total Mortgages — Other (Cost $495)					479
Sovereign (29.1%)
Australia (0.8%)
Australia Government Bond, 2.75%, 11/21/27	AUD	1,350			1,010
Austria (0.5%)
Republic of Austria Government Bond, 1.20%, 10/20/25 (c)	EUR	460			575
Belgium (1.0%)
Kingdom of Belgium Government Bond, 0.80%, 6/22/27 (c)		960			1,145
Bermuda (0.2%)
Bermuda Government International Bond, 4.85%, 2/6/24 (c)	$	200			206
Brazil (5.9%)
Brazil Notas do Tesouro Nacional, Series F, 10.00%, 1/1/21	BRL	27,554			6,922
Canada (1.0%)
Canadian Government Bond, 1.00%, 6/1/27	CAD	360			248
1.50%, 6/1/26		1,360			987
					1,235
China (0.3%)
Sinopec Group Overseas Development 2013 Ltd., 2.63%, 10/17/20	EUR	130			160
Sinopec Group Overseas Development 2015 Ltd., 2.50%, 4/28/20 (c)	$	200	��		197
					357
Denmark (0.1%)
Denmark Government Bond, 0.50%, 11/15/27	DKK	670			107
France (1.4%)
French Republic Government Bond OAT, 0.75%, 5/25/28	EUR	220			260
1.00%, 5/25/27		460			562
1.75%, 5/25/23		450			575
3.25%, 5/25/45		160			263
					1,660
Germany (0.7%)
Bundesrepublik Deutschland Bundesanleihe, 4.25%, 7/4/39		320			622
4.75%, 7/4/34		90			171
					793

	Face Amount (000)		Value (000)
Greece (1.2%)
Hellenic Republic Government Bond, 3.75%, 1/30/28	EUR	1,221	$	1,405
Hungary (0.1%)
Hungary Government International Bond, 5.75%, 11/22/23	$	130		140
Indonesia (0.2%)
Indonesia Government International Bond, 5.88%, 1/15/24		200		215
Ireland (0.1%)
Ireland Government Bond, 5.40%, 3/13/25	EUR	80		125
Italy (1.6%)
Italy Buoni Poliennali Del Tesoro, 1.45%, 9/15/22		590		686
2.20%, 6/1/27		250		284
2.35%, 9/15/24 (c)		548		693
5.00%, 9/1/40		130		189
				1,852
Japan (6.3%)
Japan Government Ten Year Bond, 0.10%, 6/20/26	JPY	119,000		1,086
0.50%, 9/20/24		169,000		1,582
1.10%, 6/20/21		226,000		2,116
Japan Government Thirty Year Bond, 0.30%, 6/20/46		51,000		416
1.70%, 6/20/33		99,000		1,082
2.00%, 9/20/40		95,000		1,114
				7,396
Malaysia (0.1%)
Malaysia Government Bond, 3.96%, 9/15/25	MYR	600		146
Mexico (0.8%)
Mexican Bonos, Series M 5.75%, 3/5/26	MXN	3,000		135
6.50%, 6/10/21		8,000		390
7.50%, 6/3/27		5,000		251
Petroleos Mexicanos, 4.88%, 1/18/24	$	190		188
6.38%, 1/23/45		50		46
				1,010
Netherlands (0.4%)
Netherlands Government Bond, 0.25%, 7/15/25 (c)	EUR	410		484
New Zealand (0.5%)
New Zealand Government Bond, 3.00%, 4/20/29	NZD	800		550
Norway (0.1%)
Norway Government Bond, 2.00%, 5/24/23 (c)	NOK	730		92

The accompanying notes are an integral part of the consolidated financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Face Amount (000)		Value (000)
Sovereign (cont'd)
Poland (0.5%)
Republic of Poland Government Bond, 2.25%, 4/25/22	PLN	1,900	$	508
4.00%, 10/25/23		330		95
				603
Portugal (1.7%)
Portugal Obrigacoes do Tesouro OT, 2.13%, 10/17/28 (c)	EUR	110		133
2.88%, 7/21/26 (c)		655		847
4.13%, 4/14/27 (c)		602		846
5.65%, 2/15/24 (c)		120		178
				2,004
Russia (0.4%)
Russian Federal Bond - OFZ, 7.00%, 8/16/23	RUB	29,650		467
Spain (1.5%)
Spain Government Bond, 0.35%, 7/30/23	EUR	710		827
0.40%, 4/30/22		330		390
4.40%, 10/31/23 (c)		210		296
Spain Government Inflation Linked Bond, 1.00%, 11/30/30 (c)		175		226
				1,739
Sweden (0.0%)
Sweden Government Bond, 1.00%, 11/12/26	SEK	470		55
United Kingdom (1.7%)
United Kingdom Gilt, 1.25%, 7/22/27	GBP	390		511
1.50%, 1/22/21		180		242
3.50%, 1/22/45		420		758
4.25%, 6/7/32 - 9/7/39		260		481
				1,992
Total Sovereign (Cost $35,122)				34,285
U.S. Treasury Securities (7.5%)
United States (7.5%)
U.S. Treasury Bonds, 2.50%, 2/15/45	$	300		273
3.13%, 5/15/48		1,180		1,213
3.50%, 2/15/39		800		872
U.S. Treasury Notes, 0.50%, 1/15/28		5,855		5,730
2.25%, 2/15/27		820		783
Total U.S. Treasury Securities (Cost $8,860)				8,871
Total Fixed Income Securities (Cost $64,625)				63,451

	Shares		Value (000)
Common Stocks (37.2%)
Australia (0.8%)
AGL Energy Ltd.		533	$	9
Alumina Ltd.		5,569		12
Amcor Ltd.		1,645		18
AMP Ltd.		4,271		11
ASX Ltd.		294		14
Australia & New Zealand Banking Group Ltd.		4,208		88
BHP Billiton Ltd.		3,478		87
Brambles Ltd.		1,848		12
CIMIC Group Ltd.		244		8
Coca-Cola Amatil Ltd.		317		2
Commonwealth Bank of Australia		1,558		84
CSL Ltd.		594		85
Fortescue Metals Group Ltd.		1,713		6
GPT Group (The) REIT		4,585		17
Incitec Pivot Ltd.		2,655		7
Insurance Australia Group Ltd.		2,989		19
Macquarie Group Ltd.		427		39
National Australia Bank Ltd.		3,203		65
Newcrest Mining Ltd.		776		12
OneMarket Ltd. (e)		137		—	@
Orica Ltd.		644		8
Origin Energy Ltd. (e)		1,422		11
Orora Ltd.		1,645		4
QBE Insurance Group Ltd.		2,313		17
Rio Tinto Ltd.		468		29
Santos Ltd. (e)		1,191		5
Scentre Group REIT		6,017		20
Shopping Centres Australasia Property Group REIT		298		1
South32 Ltd.		3,478		9
South32 Ltd.		7,996		21
Star Entertainment Grp Ltd. (The)		218		1
Stockland REIT		6,034		18
Suncorp Group Ltd.		1,750		19
Sydney Airport		452		2
Tabcorp Holdings Ltd.		224		1
Telstra Corp., Ltd.		4,317		8
Transurban Group		2,014		18
Treasury Wine Estates Ltd.		964		12
Wesfarmers Ltd.		1,163		42
Westpac Banking Corp.		3,149		68
Woodside Petroleum Ltd.		670		18
Woolworths Group Ltd.		1,372		31
				958
Austria (0.0%)
BUWOG AG (e)		28		1
Erste Group Bank AG (e)		315		13
IMMOFINANZ AG (e)		56		1
Verbund AG		75		3
voestalpine AG		158		7
				25

The accompanying notes are an integral part of the consolidated financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Shares		Value (000)
Belgium (0.1%)
Ageas		219	$	11
Anheuser-Busch InBev SA N.V.		525		53
Colruyt SA		71		4
Groupe Bruxelles Lambert SA		119		12
KBC Group N.V.		89		7
Solvay SA		57		7
Umicore SA		254		15
				109
Canada (1.0%)
Agnico Eagle Mines Ltd.		200		9
Bank of Montreal		476		37
Bank of Nova Scotia (The)		667		38
Barrick Gold Corp.		17,060		224
Barrick Gold Corp.		857		11
BCE, Inc.		800		32
Blackberry Ltd. (e)		476		5
Brookfield Asset Management, Inc., Class A		809		33
Brookfield Business Partners LP		20		1
Brookfield Property Partners LP		40		1
Cameco Corp.		476		5
Canadian Imperial Bank of Commerce		476		41
Canadian National Railway Co.		762		62
Canadian Natural Resources Ltd.		762		27
Canadian Pacific Railway Ltd.		200		37
Cenovus Energy, Inc.		762		8
Crescent Point Energy Corp.		286		2
Eldorado Gold Corp. (e)		571		1
Enbridge, Inc.		438		16
Enbridge, Inc.		857		31
Encana Corp.		762		10
Goldcorp, Inc.		762		10
Imperial Oil Ltd.		95		3
Kinross Gold Corp. (e)		952		3
Loblaw Cos., Ltd.		129		7
Magna International, Inc.		571		33
Manulife Financial Corp.		2,381		43
National Bank of Canada		400		19
Nutrien Ltd.		729		40
Obsidian Energy Ltd. (e)		500		1
Power Corp. of Canada		571		13
PrairieSky Royalty Ltd.		19		—	@
Rogers Communications, Inc., Class B		381		18
Royal Bank of Canada		952		72
Sun Life Financial, Inc.		667		27
Suncor Energy, Inc.		1,333		54
Teck Resources Ltd., Class B		476		12
Thomson Reuters Corp.		500		20
Toronto-Dominion Bank (The)		1,429		83
TransCanada Corp.		571		25
Wheaton Precious Metals Corp.		381		8
Yamana Gold, Inc.		857		2
				1,124

	Shares		Value (000)
China (0.0%)
Yum China Holdings, Inc.		356	$	14
Denmark (0.4%)
AP Moller - Maersk A/S Series A		7		8
AP Moller - Maersk A/S Series B		13		16
Danske Bank A/S		915		29
DSV A/S		1,193		96
ISS A/S		697		24
Novo Nordisk A/S Series B		5,448		253
Novozymes A/S Series B		442		23
Vestas Wind Systems A/S		517		32
				481
Finland (0.1%)
Elisa Oyj		163		8
Fortum Oyj		382		9
Kone Oyj, Class B		343		17
Metso Oyj		120		4
Nokia Oyj		3,329		19
Nokian Renkaat Oyj		141		6
Sampo Oyj, Class A		355		17
Stora Enso Oyj, Class R		588		12
UPM-Kymmene Oyj		325		12
Valmet Oyj		120		2
Wartsila Oyj Abp		513		10
				116
France (1.6%)
Accor SA		1,889		93
Aeroports de Paris (ADP)		109		25
Air Liquide SA		333		42
Airbus SE		396		46
Alstom SA		238		11
ArcelorMittal		262		8
Atos SE		548		75
AXA SA		1,795		44
BNP Paribas SA		1,161		72
Bouygues SA		1,690		73
Capgemini SE		1,203		162
Carrefour SA		436		7
CGG SA (e)		5		—	@
Cie de Saint-Gobain		1,814		81
Cie Generale des Etablissements Michelin SCA		214		26
Covivio REIT		31		3
Credit Agricole SA		1,522		20
Danone SA		432		32
Electricite de France SA		328		4
Engie SA		1,158		18
Essilor International Cie Generale d'Optique SA		178		25
Gecina SA REIT		22		4
Getlink		2,283		31
Hermes International		23		14
Klepierre SA REIT		187		7
L'Oreal SA		246		61

The accompanying notes are an integral part of the consolidated financial statements.
8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Shares		Value (000)
France (cont'd)
Legrand SA		114	$	8
LVMH Moet Hennessy Louis Vuitton SE		185		62
Orange SA		1,686		28
Pernod Ricard SA		206		34
Peugeot SA		7,270		166
Publicis Groupe SA		183		13
Renault SA		194		16
Rexel SA		1,632		23
Safran SA		147		18
Sanofi		455		36
Schneider Electric SE		459		38
SES SA		360		7
Societe Generale SA		868		37
Sodexo SA		160		16
Thales SA		92		12
TOTAL SA		1,305		80
Unibail-Rodamco-Westfield REIT		52		11
Unibail-Rodamco-Westfield CDI (e)		1,000		11
Vallourec SA (e)		98		1
Veolia Environnement SA		344		7
Vinci SA		2,863		275
Vivendi SA		1,030		25
				1,908
Germany (0.7%)
Adidas AG		126		27
Allianz SE (Registered)		284		59
BASF SE		417		40
Bayer AG (Registered)		471		52
Bayerische Motoren Werke AG		254		23
CECONOMY AG		125		1
Commerzbank AG (e)		55		1
Continental AG		60		14
Daimler AG (Registered)		486		31
Deutsche Bank AG (Registered)		628		7
Deutsche Boerse AG		969		129
Deutsche Lufthansa AG (Registered)		129		3
Deutsche Post AG (Registered)		433		14
Deutsche Telekom AG (Registered) (e)		1,535		24
E.ON SE		1,058		11
Fraport AG Frankfurt Airport Services Worldwide		249		24
Fresenius Medical Care AG & Co., KGaA		133		13
Fresenius SE & Co., KGaA		290		23
HeidelbergCement AG		44		4
Henkel AG & Co., KGaA		114		13
Henkel AG & Co., KGaA (Preference)		211		27
Infineon Technologies AG		911		23
K+S AG (Registered)		63		2
LANXESS AG		38		3
Linde AG		109		26
Merck KGaA		138		13
METRO AG		125		1

	Shares		Value (000)
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered)		146	$	31
OSRAM Licht AG		40		2
Porsche Automobil Holding SE (Preference)		188		12
QIAGEN N.V. (e)		321		12
RWE AG		346		8
Salzgitter AG		52		2
SAP SE		563		65
Siemens AG (Registered)		408		54
thyssenKrupp AG		146		4
Uniper SE		105		3
Volkswagen AG		26		4
Volkswagen AG (Preference)		107		18
				823
Greece (0.0%)
National Bank of Greece SA (e)		9		—	@
Hong Kong (0.2%)
Bank of East Asia Ltd. (The)		1,707		7
BOC Hong Kong Holdings Ltd.		2,500		12
CK Asset Holdings Ltd.		2,052		16
CK Hutchison Holdings Ltd.		2,052		22
CLP Holdings Ltd.		1,200		13
Esprit Holdings Ltd. (e)		1,397		—	@
Global Brands Group Holding Ltd. (e)		4,000		—	@
Hanergy Thin Film Power Group Ltd. (e)(f)(g)		18,000		—	@
Hang Lung Group Ltd.		1,000		3
Hang Lung Properties Ltd.		2,000		4
Hang Seng Bank Ltd.		800		20
Henderson Land Development Co., Ltd.		1,955		10
Hong Kong & China Gas Co., Ltd.		5,005		10
Hong Kong Exchanges & Clearing Ltd.		767		23
I-CABLE Communications Ltd. (e)		1,072		—	@
Kerry Logistics Network Ltd.		750		1
Kerry Properties Ltd.		1,000		5
Li & Fung Ltd.		4,000		1
Link REIT		1,254		11
MTR Corp., Ltd.		1,441		8
New World Development Co., Ltd.		4,135		6
Power Assets Holdings Ltd.		1,000		7
Sands China Ltd.		1,600		9
Sino Land Co., Ltd.		2,579		4
Sun Hung Kai Properties Ltd.		2,530		38
Swire Pacific Ltd., Class A		1,000		11
Swire Properties Ltd.		350		1
Wharf Holdings Ltd. (The)		1,400		5
Wharf Real Estate Investment Co., Ltd.		1,400		10
Wynn Macau Ltd.		1,200		4
				261
Ireland (0.0%)
CRH PLC		1,284		46

The accompanying notes are an integral part of the consolidated financial statements.
9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Shares		Value (000)
Italy (0.3%)
Assicurazioni Generali SpA		766	$	13
Atlantia SpA		3,363		99
Banco BPM SpA (e)		215		1
CNH Industrial N.V.		456		5
Enel SpA		4,573		25
Eni SpA		1,280		24
EXOR N.V.		55		4
Ferrari N.V.		61		8
Fiat Chrysler Automobiles N.V. (e)		607		12
Intesa Sanpaolo SpA		6,580		19
Italgas SpA		197		1
Leonardo SpA		351		4
Luxottica Group SpA		69		4
Mediobanca Banca di Credito Finanziario SpA		10,655		99
Prysmian SpA		116		3
Rizzoli Corriere Della Sera Mediagroup SpA (e)		41		—	@
Saipem SpA (e)		15		—	@
Snam SpA		989		4
Telecom Italia SpA		2,252		2
Telecom Italia SpA (e)		5,340		4
Tenaris SA		277		5
Terna Rete Elettrica Nazionale SpA		922		5
UniCredit SpA		687		11
Unione di Banche Italiane SpA		471		2
				354
Netherlands (0.3%)
Akzo Nobel N.V.		228		20
ASML Holding N.V.		299		59
Coca-Cola European Partners PLC		129		5
Fugro N.V. CVA (e)		56		1
Heineken N.V.		360		36
ING Groep N.V.		3,316		48
Koninklijke Ahold Delhaize N.V.		882		21
Koninklijke KPN N.V.		1,070		3
Koninklijke Philips N.V.		1,098		47
Koninklijke Vopak N.V.		68		3
PostNL N.V.		385		1
Randstad N.V.		1,325		78
Unilever N.V. CVA		1,146		64
				386
New Zealand (0.0%)
Auckland International Airport Ltd.		1,674		8
Contact Energy Ltd.		1,252		5
Fletcher Building Ltd.		1,181		5
Mercury NZ Ltd.		1,212		3
Meridian Energy Ltd.		2,247		5
Ryman Healthcare Ltd.		661		5
Spark New Zealand Ltd.		3,134		8
				39

	Shares		Value (000)
Norway (0.2%)
Akastor ASA (e)		246	$	1
Aker Solutions ASA (e)		246		2
DNB ASA		2,312		45
Equinor ASA		2,284		61
Kvaerner ASA (e)		246		1
Norsk Hydro ASA		1,778		11
Orkla ASA		1,208		10
REC Silicon ASA (e)		1,171		—	@
Subsea 7 SA		420		7
Telenor ASA		995		20
Yara International ASA		352		14
				172
Poland (0.0%)
Jeronimo Martins SGPS SA		241		4
Portugal (0.0%)
EDP - Energias de Portugal SA		2,371		9
Galp Energia SGPS SA		247		5
Pharol SGPS SA (Registered) (e)		610		—	@
				14
South Africa (0.0%)
Old Mutual Ltd. (e)		7,755		15
Spain (0.2%)
ACS Actividades de Construccion y Servicios SA		189		8
Amadeus IT Group SA		176		14
Banco Bilbao Vizcaya Argentaria SA		3,600		26
Banco de Sabadell SA		4,364		7
Banco Santander SA		6,415		34
CaixaBank SA		823		4
Distribuidora Internacional de Alimentacion SA		556		2
Enagas SA		211		6
Ferrovial SA		309		6
Gas Natural SDG SA		192		5
Grifols SA		163		5
Grifols SA (Preference) Class B		38		1
Iberdrola SA		2,771		21
Industria de Diseno Textil SA		824		28
International Consolidated Airlines Group SA		1,054		9
Red Electrica Corp., SA		338		7
Repsol SA		846		17
Telefonica SA		2,506		21
				221
Sweden (0.5%)
Alfa Laval AB		500		12
Assa Abloy AB, Class B		1,714		37
Atlas Copco AB, Class A		1,136		33
Atlas Copco AB, Class B		662		17
Boliden AB		459		15
Electrolux AB, Class B		405		9
Epiroc AB (e)		1,798		18
Essity AB, Class B		1,038		26
Getinge AB, Class B		384		3

The accompanying notes are an integral part of the consolidated financial statements.
10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Shares		Value (000)
Sweden (cont'd)
Hennes & Mauritz AB, Class B		1,573	$	23
Hexagon AB, Class B		436		24
Husqvarna AB, Class B		708		7
ICA Gruppen AB		134		4
Industrivarden AB, Class C		287		6
Investor AB, Class B		785		32
Kinnevik AB, Class B		405		14
L E Lundbergforetagen AB, Class B		130		4
Lundin Petroleum AB		316		10
Millicom International Cellular SA SDR		113		7
Nordea Bank AB		5,119		49
Sandvik AB		1,887		34
Securitas AB, Class B		528		9
Skandinaviska Enskilda Banken AB, Class A		2,577		25
Skanska AB, Class B		573		10
SKF AB, Class B		644		12
Svenska Handelsbanken AB, Class A		2,545		28
Swedbank AB, Class A		1,523		33
Swedish Match AB		305		15
Tele2 AB, Class B		606		7
Telefonaktiebolaget LM Ericsson, Class B		5,312		41
Telia Co., AB		4,374		20
Volvo AB, Class B		2,635		42
				626
Switzerland (1.6%)
ABB Ltd. (Registered)		4,363		96
Adecco Group AG (Registered)		2,070		123
Baloise Holding AG (Registered)		157		23
Cie Financiere Richemont SA (Registered)		831		71
Credit Suisse Group AG (Registered) (e)		2,146		32
GAM Holding AG (e)		542		7
Geberit AG (Registered)		130		56
Givaudan SA (Registered)		21		48
Idorsia Ltd. (e)		420		11
Julius Baer Group Ltd. (e)		416		24
Kuehne & Nagel International AG (Registered)		123		18
LafargeHolcim Ltd. (Registered) (e)		167		8
LafargeHolcim Ltd. (Registered) (e)		403		20
Lonza Group AG (Registered) (e)		196		52
Nestle SA (Registered)		4,993		388
Novartis AG (Registered)		1,920		146
Roche Holding AG (Genusschein)		1,786		398
Schindler Holding AG		139		30
SGS SA (Registered)		20		53
Sonova Holding AG (Registered)		205		37
Swatch Group AG (The)		55		26
Swiss Life Holding AG (Registered) (e)		64		22
Swiss Re AG		232		20
UBS Group AG (Registered) (e)		6,505		101
Zurich Insurance Group AG		323		96
				1,906

	Shares		Value (000)
United Kingdom (3.5%)
3i Group PLC		1,504	$	18
Admiral Group PLC		312		8
Anglo American PLC		2,093		47
Antofagasta PLC		623		8
Ashtead Group PLC		781		23
Associated British Foods PLC		554		20
AstraZeneca PLC		1,967		136
Auto Trader Group PLC		1,547		9
Aviva PLC		6,336		42
Babcock International Group PLC		389		4
BAE Systems PLC		4,933		42
Barclays PLC		26,778		67
Barratt Developments PLC		1,553		11
Berkeley Group Holdings PLC		200		10
BHP Billiton PLC		3,328		75
BP PLC		30,737		235
British American Tobacco PLC		3,551		179
British Land Co., PLC (The) REIT		1,522		13
BT Group PLC		13,194		38
Bunzl PLC		525		16
Burberry Group PLC		683		19
Capita PLC		1,030		2
Carnival PLC		307		18
Centrica PLC		8,564		18
Cobham PLC (e)		3,766		6
Coca-Cola HBC AG (e)		286		10
Compass Group PLC		2,466		53
ConvaTec Group PLC		2,160		6
Croda International PLC		204		13
CYBG PLC CDI		888		4
DCC PLC		140		13
Diageo PLC		3,921		141
Direct Line Insurance Group PLC		2,137		10
Dixons Carphone PLC		1,516		4
easyJet PLC		244		5
Experian PLC		1,470		36
Ferguson PLC		383		31
Fresnillo PLC		349		5
G4S PLC		2,437		9
GKN PLC		2,724		16
GlaxoSmithKline PLC		7,611		154
Glencore PLC (e)		19,207		92
Hammerson PLC REIT		1,233		8
Hargreaves Lansdown PLC		407		11
Hikma Pharmaceuticals PLC		221		4
HSBC Holdings PLC		31,535		296
IMI PLC		429		6
Imperial Brands PLC		1,486		55
Inmarsat PLC		714		5
InterContinental Hotels Group PLC		284		18
Intertek Group PLC		255		19
Intu Properties PLC REIT		1,368		3

The accompanying notes are an integral part of the consolidated financial statements.
11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Shares		Value (000)
United Kingdom (cont'd)
Investec PLC		1,043	$	7
ITV PLC		5,509		13
J Sainsbury PLC		2,568		11
Johnson Matthey PLC		299		14
Kingfisher PLC		3,452		14
Land Securities Group PLC REIT		1,159		15
Legal & General Group PLC		9,216		32
Lloyds Banking Group PLC		112,517		94
London Stock Exchange Group PLC		488		29
Marks & Spencer Group PLC		2,514		10
Mediclinic International PLC		575		4
Meggitt PLC		1,223		8
Merlin Entertainments PLC		1,123		6
Micro Focus International PLC		682		12
Micro Focus International PLC ADR		264		5
Mondi PLC		575		16
National Grid PLC		5,316		59
Next PLC		225		18
Paragon Offshore PLC (e)(g)		67		—
Pearson PLC		1,310		15
Persimmon PLC		475		16
Provident Financial PLC (e)		237		2
Prudential PLC		4,054		93
Quilter PLC (e)		2,585		5
Randgold Resources Ltd.		146		11
Reckitt Benckiser Group PLC		1,058		87
RELX PLC		1,676		36
Rio Tinto PLC		1,927		107
Rolls-Royce Holdings PLC (e)		2,608		34
Royal Bank of Scotland Group PLC (e)		5,544		19
Royal Dutch Shell PLC, Class A		6,934		241
Royal Dutch Shell PLC, Class B		5,897		211
Royal Mail PLC		1,389		9
RSA Insurance Group PLC		1,604		14
Sage Group PLC (The)		1,702		14
Schroders PLC		196		8
Segro PLC REIT		1,549		14
Severn Trent PLC		363		9
Shire PLC		1,417		80
Shire PLC ADR		380		64
Sky PLC		1,592		31
Smith & Nephew PLC		1,379		25
Smiths Group PLC		624		14
SSE PLC		1,559		28
St. James's Place PLC		823		12
Standard Chartered PLC		5,190		47
Standard Life Aberdeen PLC		4,199		18
Tate & Lyle PLC		722		6
Taylor Wimpey PLC		5,043		12
Tesco PLC		12,794		43
Travis Perkins PLC		392		7
TUI AG		683		15

	Shares		Value (000)
Unilever PLC		1,997	$	110
United Utilities Group PLC		1,056		11
Vodafone Group PLC		41,204		100
Weir Group PLC (The)		347		9
Whitbread PLC		284		15
Wm Morrison Supermarkets PLC		3,428		11
WPP PLC		2,014		32
				4,093
United States (25.7%)
3M Co.		1,355		267
Abbott Laboratories		1,963		120
AbbVie, Inc.		1,481		137
Accenture PLC, Class A		1,129		185
Adient PLC		38		2
Adobe Systems, Inc. (e)		332		81
AdvanSix, Inc. (e)		142		5
AES Corp.		292		4
Aetna, Inc.		305		56
Agilent Technologies, Inc.		226		14
Alexion Pharmaceuticals, Inc. (e)		234		29
Allergan PLC		220		37
Alphabet, Inc., Class A (e)		349		394
Alphabet, Inc., Class C (e)		338		377
Altria Group, Inc.		2,613		148
Amazon.com, Inc. (e)		443		753
Ameren Corp.		210		13
American Electric Power Co., Inc.		341		24
American Express Co.		5,005		491
American International Group, Inc.		2,551		135
American Tower Corp. REIT		375		54
Ameriprise Financial, Inc.		224		31
AmerisourceBergen Corp.		270		23
Amgen, Inc.		1,136		210
Amphenol Corp., Class A		327		29
Anadarko Petroleum Corp.		1,125		82
Analog Devices, Inc.		168		16
Annaly Capital Management, Inc. REIT		380		4
Anthem, Inc.		346		82
Apache Corp.		242		11
Apple, Inc.		6,679		1,236
AT&T, Inc.		7,038		226
Automatic Data Processing, Inc.		334		45
Avanos Medical, Inc.		334		19
Avery Dennison Corp.		290		30
Baker Hughes a GE Co.		467		15
Bank of America Corp.		14,935		421
Bank of New York Mellon Corp. (The)		416		22
Baxter International, Inc.		1,289		95
BB&T Corp.		380		19
Becton Dickinson & Co.		377		90
Bed Bath & Beyond, Inc.		312		6
Berkshire Hathaway, Inc., Class B (e)		1,211		226
Biogen, Inc. (e)		444		129

The accompanying notes are an integral part of the consolidated financial statements.
12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Shares		Value (000)
United States (cont'd)
BlackRock, Inc.		305	$	152
Boeing Co. (The)		1,205		404
Booking Holdings, Inc. (e)		53		107
Boston Properties, Inc. REIT		175		22
Boston Scientific Corp. (e)		357		12
Bristol-Myers Squibb Co.		3,088		171
Broadcom, Inc.		7		2
California Resources Corp. (e)		123		6
Capital One Financial Corp.		14,381		1,322
Cardinal Health, Inc.		182		9
Carnival Corp.		2		—	@
Caterpillar, Inc.		1,147		156
CBS Corp., Class B		385		22
CDK Global, Inc.		152		10
Celgene Corp. (e)		1,160		92
CenterPoint Energy, Inc.		175		5
CenturyLink, Inc.		380		7
Cerner Corp. (e)		339		20
CF Industries Holdings, Inc.		38		2
CH Robinson Worldwide, Inc.		232		19
Charles Schwab Corp. (The)		714		37
Charter Communications, Inc., Class A (e)		183		54
Chemours Co. (The)		416		18
Chesapeake Energy Corp. (e)		269		1
Chevron Corp.		2,197		278
Chipotle Mexican Grill, Inc. (e)		45		19
Cigna Corp.		314		53
Cintas Corp.		188		35
Cisco Systems, Inc.		6,397		275
CIT Group, Inc.		358		18
Citigroup, Inc.		4,025		269
Citrix Systems, Inc. (e)		247		26
Cleveland-Cliffs, Inc. (e)		20		—	@
CME Group, Inc.		212		35
CNX Resources Corp. (e)		383		7
Coca-Cola Co. (The)		1,309		57
Cognizant Technology Solutions Corp., Class A		312		25
Colgate-Palmolive Co.		3,500		227
Comcast Corp., Class A		6,994		229
Comerica, Inc.		224		20
Concho Resources, Inc. (e)		122		17
Conduent, Inc. (e)		219		4
ConocoPhillips		2,115		147
CONSOL Energy, Inc. (e)		46		2
Consolidated Edison, Inc.		339		26
Costco Wholesale Corp.		1,081		226
Crown Castle International Corp. REIT		349		38
CSX Corp.		444		28
Cummins, Inc.		9		1
CVS Health Corp.		3,715		239
Danaher Corp.		338		33
DaVita, Inc. (e)		302		21

	Shares		Value (000)
Deere & Co.		24	$	3
Dell Technologies, Inc., Class V (e)		387		33
Devon Energy Corp.		273		12
Discover Financial Services		19,133		1,347
Discovery, Inc., Class A (e)		427		12
Discovery, Inc., Class C (e)		467		12
Dominion Energy, Inc.		270		18
DowDuPont, Inc.		4,334		286
DTE Energy Co.		280		29
Duke Energy Corp.		1,211		96
Dun & Bradstreet Corp. (The)		182		22
DXC Technology Co.		166		13
Eaton Corp., PLC		30		2
eBay, Inc. (e)		2,018		73
Ecolab, Inc.		34		5
Edison International		364		23
Edwards Lifesciences Corp. (e)		316		46
Eli Lilly & Co.		1,348		115
Emerson Electric Co.		1,261		87
Entergy Corp.		283		23
EOG Resources, Inc.		372		46
Equity Residential REIT		363		23
ESC Seventy Seven (e)(g)		15		—
Estee Lauder Cos., Inc. (The), Class A		287		41
Exelon Corp.		371		16
Express Scripts Holding Co. (e)		1,028		79
Exxon Mobil Corp.		4,495		372
Facebook, Inc., Class A (e)		1,823		354
Fastenal Co.		15		1
FedEx Corp.		343		78
Fifth Third Bancorp		411		12
FirstEnergy Corp.		312		11
Fluor Corp.		45		2
Ford Motor Co.		6,317		70
Fortive Corp.		292		23
Franklin Resources, Inc.		322		10
Freeport-McMoRan, Inc.		10,948		189
Frontier Communications Corp.		34		—	@
General Dynamics Corp.		73		14
General Electric Co.		6,672		91
General Mills, Inc.		423		19
GGP, Inc. REIT		368		8
Gilead Sciences, Inc.		1,260		89
Goldman Sachs Group, Inc. (The)		789		174
Halliburton Co.		10,342		466
HCP, Inc. REIT		319		8
Henry Schein, Inc. (e)		329		24
Hershey Co. (The)		166		15
Hess Corp.		232		16
Hewlett Packard Enterprise Co.		1,508		22
Home Depot, Inc. (The)		2,050		400
Honeywell International, Inc.		2,117		305
HP, Inc.		1,297		29

The accompanying notes are an integral part of the consolidated financial statements.
13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Shares		Value (000)
United States (cont'd)
Humana, Inc.		131	$	39
Illinois Tool Works, Inc.		29		4
Intel Corp.		3,733		186
Intercontinental Exchange, Inc.		379		28
International Business Machines Corp.		1,162		162
Interpublic Group of Cos., Inc. (The)		418		10
Intuit, Inc.		327		67
Intuitive Surgical, Inc. (e)		142		68
Invesco Ltd.		341		9
Iron Mountain, Inc. CDI		78		3
Iron Mountain, Inc. REIT		422		15
JBG SMITH Properties REIT		65		2
Johnson & Johnson		3,345		406
Johnson Controls International PLC		350		12
JPMorgan Chase & Co.		5,789		603
Juniper Networks, Inc.		360		10
Kellogg Co.		425		30
KeyCorp		339		7
Keysight Technologies, Inc. (e)		126		7
Kimberly-Clark Corp.		1,135		120
Kimco Realty Corp. REIT		401		7
Kohl's Corp.		302		22
Kraft Heinz Co. (The)		95		6
Kroger Co. (The)		782		22
L Brands, Inc.		266		10
Laboratory Corp. of America Holdings (e)		173		31
Las Vegas Sands Corp.		162		12
Liberty Global PLC, Class A (e)		365		10
Liberty Global PLC Series C (e)		361		10
Liberty Latin America Ltd., Class A (e)		72		1
Liberty Latin America Ltd., Class C (e)		181		4
Liberty Property Trust REIT		357		16
Lockheed Martin Corp.		15		4
LogMeIn, Inc.		49		5
Lowe's Cos., Inc.		2,099		201
M&T Bank Corp.		202		34
Macerich Co. (The) REIT		363		21
Mallinckrodt PLC (e)		29		1
ManpowerGroup, Inc.		110		9
Marathon Oil Corp.		407		9
Marathon Petroleum Corp.		326		23
Marriott International, Inc., Class A		2		—	@
Mastercard, Inc., Class A		2,472		486
McDonald's Corp.		1,183		185
McKesson Corp.		302		40
Medtronic PLC		2,094		179
Merck & Co., Inc.		2,486		151
Microsoft Corp.		7,440		734
Mondelez International, Inc., Class A		1,087		45
Mosaic Co. (The)		29		1
Murphy Oil Corp.		339		11
Murphy USA, Inc. (e)		162		12

	Shares		Value (000)
Nasdaq, Inc.		188	$	17
National Oilwell Varco, Inc.		418		18
NetApp, Inc.		404		32
NetScout Systems, Inc. (e)		3,532		105
New York Community Bancorp, Inc.		188		2
Newfield Exploration Co. (e)		348		11
Newmont Mining Corp.		8,046		303
News Corp., Class A		356		6
News Corp., Class B		310		5
NextEra Energy, Inc.		320		53
NIKE, Inc., Class B		4,068		324
Noble Corp., PLC (e)		254		2
Noble Energy, Inc.		310		11
Nordstrom, Inc.		137		7
Norfolk Southern Corp.		358		54
Northrop Grumman Corp.		20		6
NOW, Inc. (e)		188		3
nVent Electric PLC (e)		6		—	@
O'Reilly Automotive, Inc. (e)		242		66
Occidental Petroleum Corp.		1,116		93
Omnicom Group, Inc.		277		21
ONE Gas, Inc.		129		10
ONEOK, Inc.		331		23
Oracle Corp.		4,521		199
PACCAR, Inc.		22		1
PayPal Holdings, Inc. (e)		2,018		168
Pentair PLC		6		—	@
People's United Financial, Inc.		188		3
PepsiCo, Inc.		1,916		209
Perspecta, Inc.		83		2
Pfizer, Inc.		5,498		199
PG&E Corp.		358		15
Philip Morris International, Inc.		1,772		143
Phillips 66		1,014		114
Pioneer Natural Resources Co.		302		57
Pitney Bowes, Inc.		232		2
PNC Financial Services Group, Inc. (The)		673		91
PPL Corp.		389		11
Praxair, Inc.		29		5
Procter & Gamble Co. (The)		3,492		273
ProLogis, Inc. REIT		317		21
Public Service Enterprise Group, Inc.		389		21
Public Storage REIT		167		38
QUALCOMM, Inc.		3,196		179
Quality Care Properties, Inc. REIT (e)		72		2
Quest Diagnostics, Inc.		247		27
Range Resources Corp.		146		2
Rayonier Advanced Materials, Inc.		193		3
Rayonier, Inc. REIT		316		12
Raytheon Co.		22		4
Regions Financial Corp.		436		8
Republic Services, Inc.		418		29

The accompanying notes are an integral part of the consolidated financial statements.
14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Shares		Value (000)
United States (cont'd)
Robert Half International, Inc.		224	$	15
Rockwell Automation, Inc.		9		2
Ross Stores, Inc.		320		27
Royal Caribbean Cruises Ltd.		2		—	@
S&P Global, Inc.		317		65
Sabra Health Care, Inc. REIT		118		3
salesforce.com, Inc. (e)		365		50
Schlumberger Ltd.		1,795		120
Sempra Energy		357		41
Simon Property Group, Inc. REIT		349		59
Southern Co. (The)		383		18
Southwestern Energy Co. (e)		444		2
Sprint Corp. (e)		1,118		6
Starbucks Corp.		2,543		124
State Street Corp.		357		33
Stericycle, Inc. (e)		249		16
Stryker Corp.		327		55
SunTrust Banks, Inc.		344		23
Symantec Corp.		408		8
Synchrony Financial		38,330		1,279
Sysco Corp.		387		26
T Rowe Price Group, Inc.		278		32
Tapestry, Inc.		346		16
Target Corp.		1,165		89
TE Connectivity Ltd.		186		17
TechnipFMC PLC		97		3
Texas Instruments, Inc.		3,511		387
Thermo Fisher Scientific, Inc.		306		63
TJX Cos., Inc. (The)		728		69
Twenty-First Century Fox, Inc., Class A		1,796		89
Twenty-First Century Fox, Inc., Class B		448		22
Union Pacific Corp.		2,087		296
United Parcel Service, Inc., Class B		2,107		224
United Technologies Corp.		3,612		452
UnitedHealth Group, Inc.		2,063		506
Urban Edge Properties REIT		74		2
US Bancorp		1,455		73
Valero Energy Corp.		400		44
Varex Imaging Corp. (e)		124		5
Varian Medical Systems, Inc. (e)		275		31
Ventas, Inc. REIT		253		14
Verisk Analytics, Inc. (e)		168		18
Verizon Communications, Inc.		8,341		420
VF Corp.		348		28
Viacom, Inc., Class B		292		9
Visa, Inc., Class A		3,291		436
Vornado Realty Trust REIT		131		10
Walgreens Boots Alliance, Inc.		368		22
Walmart, Inc.		3,666		314
Walt Disney Co. (The)		2,142		225

	Shares		Value (000)
Washington Prime Group, Inc. REIT		397	$	3
Waste Management, Inc.		433		35
Weatherford International PLC (e)		488		2
WEC Energy Group, Inc.		220		14
Wells Fargo & Co.		4,251		236
Welltower, Inc. REIT		363		23
Western Digital Corp.		72		6
Western Union Co. (The)		88		2
Weyerhaeuser Co. REIT		718		26
Williams Cos., Inc. (The)		458		12
Worldpay, Inc., Class A (e)		225		18
WPX Energy, Inc. (e)		332		6
WW Grainger, Inc.		5		2
Wynn Resorts Ltd.		115		19
Xcel Energy, Inc.		295		14
Xerox Corp.		241		6
Xylem, Inc.		135		9
Yum! Brands, Inc.		313		25
Zimmer Biomet Holdings, Inc.		249		28
Zoetis, Inc.		1,410		120
				30,256
Total Common Stocks (Cost $35,739)				43,951
	No. of Rights
Rights (0.0%)
Italy (0.0%)
Intesa Sanpaolo SpA (e)		6,580		—	@
Spain (0.0%)
ACS Actividades de Construccion y Servicios SA (e)		189		—	@
Repsol SA (e)		846		1
				1
Total Rights (Cost $1)				1
	No. of Warrants
Warrant (0.0%)
France (0.0%)
CGG SA, expires 2/21/22 (e) (Cost $—)		5		—	@
	Shares
Investment Company (2.7%)
United States (2.7%)
SPDR S&P 500 ETF Trust (Cost $2,078)		11,613		3,150
Short-Term Investments (5.9%)
Investment Company (4.1%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note H) (Cost $4,889)		4,888,598		4,889

The accompanying notes are an integral part of the consolidated financial statements.
15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

	Face Amount (000)		Value (000)
U.S. Treasury Securities (1.8%)
U.S. Treasury Bills, 2.02%, 11/1/18 (h)(i)	$	1,794	$	1,782
2.03%, 11/1/18 (h)(i)		293		291
Total U.S. Treasury Securities (Cost $2,073)				2,073
Total Short-Term Investments (Cost $6,962)				6,962
Total Investments (99.6%) (Cost $109,405) (j)(k)				117,515
Other Assets in Excess of Liabilities (0.4%)				491
Net Assets (100.0%)			$	118,006

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Security is subject to delayed delivery.

(b)  Floating or Variable rate securities: The rates disclosed are as of June 30, 2018. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description in the Consolidated Portfolio of Investments. Certain variable rate securities may not be based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description in the Consolidated Portfolio of Investments.

(c)  144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(d)  Perpetual — One or more securities do not have a predetermined maturity date. Rates for these securities are fixed for a period of time, after which they revert to a floating rate. Interest rates in effect are as of June 30, 2018.

(e)  Non-income producing security.

(f)  Security has been deemed illiquid at June 30, 2018.

(g)  At June 30, 2018, the Fund held fair valued securities valued at less than $500, representing less than 0.05% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's Directors.

(h)  Rate shown is the yield to maturity at June 30, 2018.

(i)  All or a portion of the security was pledged to cover margin requirements for swap agreements.

(j)  Securities are available for collateral in connection with securities purchased on a forward commitment basis, open foreign currency forward exchange contracts, futures contracts and swap agreements.

(k)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $13,352,000 and the aggregate gross unrealized depreciation is approximately $6,236,000, resulting in net unrealized appreciation of approximately $7,116,000.

@  Value is less than $500.

ADR  American Depositary Receipt.

CDI  CHESS Depositary Interest.

CVA  Certificaten Van Aandelen.

ETF  Exchange Traded Fund.

LIBOR  London Interbank Offered Rate.

MTN  Medium Term Note.

OAT  Obligations Assimilables du Trésor (French Treasury Obligation).

OFZ  Obilgatsyi Federal'novo Zaima (Russian Federal Loan Obligation).

REIT  Real Estate Investment Trust.

SDR  Swedish Depositary Receipt.

SPDR  Standard & Poor's Depository Receipt.

TBA  To Be Announced.

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2018:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
Australia and New Zealand Banking Group	AUD	911	$	704	7/12/18	$	29
Australia and New Zealand Banking Group	$	363	GBP	257	7/12/18		(24	)
Bank of America NA	CHF	167	$	170	9/20/18		(—	@)
Bank of America NA	CNH	2,207	$	338	9/20/18		6
Bank of America NA	EUR	62	$	75	7/12/18		3
Bank of America NA	EUR	291	$	351	7/12/18		11
Bank of America NA	JPY	6,319	$	57	7/12/18		—	@
Bank of America NA	JPY	2,709	$	25	7/12/18		1
Bank of America NA	MXN	2,375	$	121	7/12/18		2
Bank of America NA	MXN	9,789	$	524	7/12/18		32
Bank of America NA	MXN	190	$	9	7/12/18		(—	@)
Bank of America NA	NZD	290	$	210	7/12/18		14
Bank of America NA	PLN	471	$	132	7/12/18		7
Bank of America NA	PLN	919	$	245	9/20/18		(—	@)
Bank of America NA	PLN	515	$	145	7/12/18		8
Bank of America NA	PLN	1,226	$	329	9/20/18		1
Bank of America NA	RUB	17,903	$	291	7/12/18		6
Bank of America NA	$	11	AUD	14	7/12/18		(—	@)

The accompanying notes are an integral part of the consolidated financial statements.
16

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Foreign Currency Forward Exchange Contracts: (cont'd)

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
Bank of America NA	$	89	AUD	118	7/12/18	$	(2	)
Bank of America NA	$	5	AUD	7	7/12/18		(—	@)
Bank of America NA	$	278	CAD	354	7/12/18		(8	)
Bank of America NA	$	60	CHF	58	7/12/18		(1	)
Bank of America NA	$	5	EUR	4	7/12/18		(—	@)
Bank of America NA	$	50	JPY	5,442	7/12/18		(1	)
Bank of America NA	$	57	JPY	6,319	7/3/18		(—	@)
Bank of America NA	$	158	PLN	531	7/12/18		(16	)
Bank of Montreal	HUF	16,306	$	58	9/20/18		—	@
Bank of New York Mellon	CHF	1	$	1	9/20/18		(—	@)
Barclays Bank PLC	AUD	133	$	98	9/20/18		(—	@)
Barclays Bank PLC	EUR	1,006	$	1,171	9/20/18		(11	)
Barclays Bank PLC	GBP	171	$	227	9/20/18		(—	@)
Barclays Bank PLC	SGD	26	$	19	9/20/18		—	@
Barclays Bank PLC	$	71	EUR	60	7/12/18		(1	)
Barclays Bank PLC	$	3,309	GBP	2,502	9/20/18		5
Barclays Bank PLC	$	645	KRW	686,342	7/12/18		(29	)
BNP Paribas SA	CAD	1,325	$	1,000	9/20/18		(9	)
BNP Paribas SA	CHF	5	$	5	9/20/18		(—	@)
BNP Paribas SA	$	2	EUR	1	7/12/18		(—	@)
BNP Paribas SA	$	1,725	RUB	108,520	9/20/18		(11	)
Citibank NA	AUD	213	$	157	9/20/18		(1	)
Citibank NA	CAD	196	$	148	9/20/18		(1	)
Citibank NA	CHF	9	$	9	9/20/18		(—	@)
Citibank NA	CLP	206,523	$	325	9/20/18		9
Citibank NA	CZK	6,177	$	306	9/20/18		27
Citibank NA	CZK	2,312	$	104	9/20/18		(—	@)
Citibank NA	CZK	2,339	$	105	9/20/18		(—	@)
Citibank NA	CZK	1,589	$	77	9/20/18		6
Citibank NA	CZK	4,058	$	198	9/20/18		15
Citibank NA	EUR	5,573	$	6,918	9/20/18		371
Citibank NA	EUR	72	$	85	9/20/18		—	@
Citibank NA	EUR	124	$	151	9/20/18		6
Citibank NA	EUR	750	$	873	9/20/18		(8	)
Citibank NA	ILS	197	$	54	9/20/18		—	@
Citibank NA	KRW	316,766	$	293	9/20/18		8
Citibank NA	THB	7,770	$	237	9/20/18		1
Citibank NA	$	123	CHF	122	7/12/18		—	@
Citibank NA	$	151	CZK	3,161	9/20/18		(8	)
Citibank NA	$	170	CZK	3,735	9/20/18		(1	)
Citibank NA	$	6,908	CZK	142,087	9/20/18		(494	)
Citibank NA	$	168	EUR	135	9/20/18		(9	)
Citibank NA	$	201	EUR	161	9/20/18		(12	)
Citibank NA	$	305	EUR	254	7/12/18		(9	)
Citibank NA	$	227	EUR	181	9/20/18		(15	)
Citibank NA	$	847	GBP	640	9/20/18		1
Citibank NA	$	121	HKD	945	9/20/18		—	@
Citibank NA	$	1,109	SEK	9,854	9/20/18		(2	)
Citibank NA	$	908	TRY	4,466	9/20/18		32
Commonwealth Bank of Australia	EUR	252	$	294	9/20/18		(3	)

The accompanying notes are an integral part of the consolidated financial statements.
17

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Foreign Currency Forward Exchange Contracts: (cont'd)

Counterparty	Contracts to Deliver (000)			In Exchange For (000)			Delivery Date	Unrealized Appreciation (Depreciation) (000)
Commonwealth Bank of Australia	NZD	9		$	6		9/20/18	$	—	@
Commonwealth Bank of Australia	$	204		GBP	154		9/20/18		—	@
Credit Suisse International	CHF	—	@	$	—	@	9/20/18		(—	@)
Credit Suisse International	EUR	4		$	5		9/20/18		(—	@)
Goldman Sachs International	AUD	2,081		$	1,533		9/20/18		(7	)
Goldman Sachs International	BRL	512		$	129		5/16/19		—	@
Goldman Sachs International	BRL	1,372		$	365		9/20/18		14
Goldman Sachs International	BRL	6,816		$	1,763		5/16/19		56
Goldman Sachs International	BRL	6,220		$	1,606		5/16/19		48
Goldman Sachs International	BRL	17,384		$	4,503		5/16/19		149
Goldman Sachs International	CHF	22		$	22		9/20/18		(—	@)
Goldman Sachs International	EUR	221		$	260		9/20/18		—	@
Goldman Sachs International	EUR	262		$	305		9/20/18		(3	)
Goldman Sachs International	HKD	1,296		$	165		9/20/18		(—	@)
Goldman Sachs International	HUF	60,350		$	217		9/20/18		2
Goldman Sachs International	IDR	1,018,161		$	72		9/20/18		2
Goldman Sachs International	IDR	3,546,625		$	252		9/20/18		7
Goldman Sachs International	JPY	8,397		$	77		9/20/18		1
Goldman Sachs International	PLN	480		$	134		7/12/18		6
Goldman Sachs International	PLN	481		$	136		7/12/18		7
Goldman Sachs International	$	266		BRL	1,036		5/16/19		(7	)
Goldman Sachs International	$	1,778		EUR	1,432		7/12/18		(104	)
Goldman Sachs International	$	8		GBP	6		9/20/18		—	@
Goldman Sachs International	$	27		HKD	214		9/20/18		—	@
Goldman Sachs International	$	22		MXN	452		7/12/18		1
Goldman Sachs International	ZAR	4,746		$	340		9/20/18		(2	)
JPMorgan Chase Bank NA	AUD	674		$	497		9/20/18		(2	)
JPMorgan Chase Bank NA	CAD	24		$	19		7/12/18		—	@
JPMorgan Chase Bank NA	CNH	475		$	71		6/20/19		(—	@)
JPMorgan Chase Bank NA	CNH	29,895		$	4,481		6/20/19		26
JPMorgan Chase Bank NA	EUR	218		$	255		7/12/18		—	@
JPMorgan Chase Bank NA	INR	22,407		$	327		9/19/18		2
JPMorgan Chase Bank NA	JPY	24,277		$	220		9/20/18		(—	@)
JPMorgan Chase Bank NA	JPY	107,477		$	985		9/20/18		9
JPMorgan Chase Bank NA	NZD	209		$	146		7/12/18		4
JPMorgan Chase Bank NA	NZD	208		$	145		7/12/18		4
JPMorgan Chase Bank NA	RUB	8,487		$	133		7/12/18		(2	)
JPMorgan Chase Bank NA	TWD	9,048		$	304		9/20/18		6
JPMorgan Chase Bank NA	$	28		EUR	24		7/12/18		—	@
JPMorgan Chase Bank NA	$	197		EUR	169		7/12/18		(—	@)
JPMorgan Chase Bank NA	$	20		EUR	17		7/12/18		—	@
JPMorgan Chase Bank NA	$	125		EUR	107		9/20/18		—	@
JPMorgan Chase Bank NA	$	223		HKD	1,750		9/20/18		—	@
JPMorgan Chase Bank NA	$	124		JPY	13,500		7/12/18		(2	)
JPMorgan Chase Bank NA	$	927		JPY	99,028		7/12/18		(32	)
JPMorgan Chase Bank NA	$	75		JPY	8,197		9/20/18		(—	@)
JPMorgan Chase Bank NA	$	1,326		MXN	27,713		9/20/18		52
JPMorgan Chase Bank NA	$	153		ZAR	2,122		9/20/18		—	@
JPMorgan Chase Bank NA	ZAR	1,836		$	132		9/20/18		(1	)
Royal Bank of Canada	CAD	316		$	250		7/12/18		10

The accompanying notes are an integral part of the consolidated financial statements.
18

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Foreign Currency Forward Exchange Contracts: (cont'd)

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
Royal Bank of Canada	EUR	22	$	26	7/12/18	$	—	@
Royal Bank of Canada	$	53	DKK	320	7/12/18		(3	)
Royal Bank of Canada	$	3	GBP	2	7/12/18		(—	@)
Royal Bank of Canada	$	9	MXN	190	7/12/18		—	@
Royal Bank of Canada	$	163	SEK	1,358	7/12/18		(11	)
State Street Bank and Trust Co.	AUD	930	$	685	9/20/18		(3	)
State Street Bank and Trust Co.	$	103	GBP	78	9/20/18		—	@
State Street Bank and Trust Co.	$	13	HKD	100	9/20/18		—	@
State Street Bank and Trust Co.	$	133	IDR	1,848,216	7/12/18		(4	)
State Street Bank and Trust Co.	$	247	PLN	925	7/12/18		—	@
UBS AG	AUD	2,163	$	1,594	9/20/18		(8	)
UBS AG	CAD	113	$	86	9/20/18		(—	@)
UBS AG	CAD	195	$	147	9/20/18		(1	)
UBS AG	DKK	652	$	102	9/20/18		(1	)
UBS AG	ILS	523	$	144	9/20/18		1
UBS AG	JPY	10,696	$	98	9/20/18		1
UBS AG	NOK	4,402	$	538	9/20/18		(4	)
UBS AG	PLN	445	$	121	7/12/18		2
UBS AG	$	110	CHF	110	7/12/18		1
UBS AG	$	5	EUR	4	7/12/18		(—	@)
UBS AG	$	7	GBP	6	7/12/18		(—	@)
UBS AG	$	20	JPY	2,210	7/12/18		(—	@)
UBS AG	$	9	MYR	34	7/12/18		(—	@)
UBS AG	$	2	NOK	15	7/12/18		(—	@)
UBS AG	$	476	NOK	3,702	7/12/18		(22	)
UBS AG	$	103	SGD	135	7/12/18		(4	)
UBS AG	$	82	THB	2,555	7/12/18		(5	)
UBS AG	$	85	TRY	404	9/20/18		(—	@)
UBS AG	$	2,037	TRY	10,018	9/20/18		72
						$	180

Futures Contracts:

The Fund had the following futures contracts open at June 30, 2018:

	Number of Contracts		Expiration Date	Notional Amount (000)			Value (000)		Unrealized Appreciation (Depreciation) (000)
Long:
CAC 40 Index (France)		1	Jul-18		—	@	$	62	$	(2	)
DAX Index (Germany)		1	Sep-18		—	@		359		(15	)
Euro Stoxx 50 (Germany)		127	Sep-18		1			5,029		(120	)
FTSE MIB Index (Italy)		5	Sep-18		—	@		630		(12	)
German Euro BOBL (Germany)		9	Sep-18		900			1,389		5
Hang Seng Index (Hong Kong)		3	Jul-18		—	@		549		(1	)
IBEX 35 Index (Spain)		7	Jul-18		—	@		785		(18	)
MSCI Emerging Market E Mini (United States)		1	Sep-18		—	@		53		(—	@)
MSCI Singapore Free Index (Singapore)		12	Jul-18		1			322		3
NIKKEI 225 Index (United States)		8	Sep-18		4			803		(10	)
S&P 500 E Mini Index (United States)		72	Sep-18		4			9,798		(182	)
S&P TSE 60 Index (Canada)		7	Sep-18		1			1,026		9

The accompanying notes are an integral part of the consolidated financial statements.
19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Futures Contracts: (cont'd)

	Number of Contracts		Expiration Date	Notional Amount (000)			Value (000)			Unrealized Appreciation (Depreciation) (000)
SPI 200 Index (Australia)		6	Sep-18		—	@	$	683		$	8
TOPIX Index (Japan)		13	Sep-18		130			2,032			(47	)
U.S. Treasury 10 yr. Note (United States)		9	Sep-18		900			1,082			3
U.S. Treasury 10 yr. Ultra Long Bond (United States)		17	Sep-18		1,700			2,180			6
U.S. Treasury 2 yr. Note (United States)		17	Sep-18		3,400			3,601			2
U.S. Treasury Ultra Bond (United States)		7	Sep-18		700			1,117			21
Short:
Brent Crude Future (United Kingdom)		1	Jul-18		(1	)		(79	)		(3	)
Copper Future (United States)		23	Sep-18		(575	)		(1,706	)		24
German Euro Bund (Germany)		15	Sep-18		(1,500	)		(2,847	)		(27	)
Hang Seng China Enterprises Index (Hong Kong)		42	Jul-18		(2	)		(2,909	)		13
U.S. Treasury 5 yr. Note (United States)		27	Sep-18		(2,700	)		(3,068	)		(12	)
										$	(355	)

Interest Rate Swap Agreements:

The Fund had the following interest rate swap agreements open at June 30, 2018:

Swap Counterparty	Floating Rate Index	Pay/Receive Floating Rate	Fixed Rate			Payment Frequency Paid/Received	Maturity Date	Notional Amount (000)		Value (000)			Upfront Payment Paid (000)			Unrealized Appreciation (Depreciation) (000)
JPMorgan Chase Bank NA	3 Month KORIBOR	Pay		1.83	%	Quarterly/Quarterly	6/14/27	KRW	510,000	$	(13	)	$	—		$	(13	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		7.32		Monthly/Monthly	10/21/19	MXN	33,045		(19	)		—			(19	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		7.32		Monthly/Monthly	10/21/19		34,367		(20	)		—			(20	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		7.32		Monthly/Monthly	10/21/19		32,928		(18	)		—			(18	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		7.63		Monthly/Monthly	12/5/19		4,099		(2	)		—			(2	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		7.63		Monthly/Monthly	12/5/19		34,399		(14	)		—			(14	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		7.64		Monthly/Monthly	12/5/19		9,421		(4	)		—			(4	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		8.04		Monthly/Monthly	12/19/19		54,025		(6	)		—			(6	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		8.04		Monthly/Monthly	12/19/19		41,090		(4	)		—			(4	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		8.06		Monthly/Monthly	12/20/19		45,381		(4	)		—			(4	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		8.08		Monthly/Monthly	12/20/19		45,381		(4	)		—			(4	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		8.07		Monthly/Monthly	12/25/19		45,382		(4	)		—			(4	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		8.09		Monthly/Monthly	12/26/19		45,382		(3	)		—			(3	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		8.10		Monthly/Monthly	12/26/19		45,381		(3	)		—			(3	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		8.06		Monthly/Monthly	12/27/19		48,727		(4	)		—			(4	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		7.71		Monthly/Monthly	4/23/20		15,634		(6	)		—	@		(6	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Pay		7.90		Monthly/Monthly	5/25/20		9,585		(2	)		—	@		(2	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Receive		7.94		Monthly/Monthly	12/9/27		11,167		3			—			3
Morgan Stanley & Co., LLC*	1 Month TIIE	Receive		7.95		Monthly/Monthly	12/9/27		7,960		2			—			2
Morgan Stanley & Co., LLC*	1 Month TIIE	Receive		8.00		Monthly/Monthly	12/10/27		6,934		—	@		—			—	@
Morgan Stanley & Co., LLC*	1 Month TIIE	Receive		8.01		Monthly/Monthly	12/10/27		17,781		—	@		—			—	@
Morgan Stanley & Co., LLC*	1 Month TIIE	Receive		8.02		Monthly/Monthly	12/10/27		14,220		—	@		—			—	@
Morgan Stanley & Co., LLC*	3 Month JIBAR	Pay		8.51		Quarterly/Quarterly	12/13/27	ZAR	38,577		50			—			50
Morgan Stanley & Co., LLC*	1 Month TIIE	Receive		8.12		Monthly/Monthly	12/15/27	MXN	14,219		(5	)		—			(5	)
Morgan Stanley & Co., LLC*	3 Month JIBAR	Pay		8.37		Quarterly/Quarterly	12/15/27	ZAR	2,753		2			—			2
Morgan Stanley & Co., LLC*	1 Month TIIE	Receive		8.12		Monthly/Monthly	12/16/27	MXN	14,220		(7	)		—			(7	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Receive		8.14		Monthly/Monthly	12/16/27		14,219		(6	)		—			(6	)
Morgan Stanley & Co., LLC*	1 Month TIIE	Receive		8.11		Monthly/Monthly	12/17/27		11,812		(4	)		—			(4	)
Morgan Stanley & Co., LLC*	3 Month JIBAR	Pay		7.88		Quarterly/Quarterly	1/4/28	ZAR	10,985		(19	)		—			(19	)
Morgan Stanley & Co., LLC*	3 Month JIBAR	Pay		7.83		Quarterly/Quarterly	1/19/28		17,918		(36	)		—			(36	)
Morgan Stanley & Co., LLC*	3 Month JIBAR	Pay		7.81		Quarterly/Quarterly	1/24/28		8,330		(17	)		—			(17	)
Morgan Stanley & Co., LLC*	3 Month JIBAR	Pay		7.71		Quarterly/Quarterly	4/26/28		3,083		(8	)		—			(8	)
Morgan Stanley & Co., LLC*	3 Month LIBOR	Receive		3.02		Semi-Annual/Quarterly	6/22/28	$	700		(4	)		—			(4	)
Morgan Stanley & Co., LLC*	3 Month JIBAR	Pay		8.34		Quarterly/Quarterly	6/27/28	ZAR	7,681		2			—			2
Morgan Stanley & Co., LLC*	3 Month LIBOR	Receive		3.04		Semi-Annual/Quarterly	6/22/48		590		(8	)		—			(8	)
										$	(185	)	$	—	@	$	(185	)

The accompanying notes are an integral part of the consolidated financial statements.
20

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Total Return Swap Agreements:

The Fund had the following total return swap agreements open at June 30, 2018:

Swap Counterparty	Index	Pay/Receive Total Return of Referenced Index	Floating Rate	Payment Frequency	Maturity Date	Notional Amount (000)		Value (000)			Upfront Payment Paid (000)		Unrealized Appreciation (Depreciation) (000)
Barclays Bank PLC	Barclays Canada Banks Index††	Pay	3 Month CDOR plus 0.00%	Quarterly	5/8/19	CAD	796	$	(3	)	$	—	$	(3	)
Barclays Bank PLC	Barclays Canada Banks Index††	Pay	3 Month CDOR plus 0.00%	Quarterly	5/8/19		949		3			—		3
Barclays Bank PLC	Barclays Canada Banks Index††	Pay	3 Month CDOR plus 0.00%	Quarterly	5/8/19		965		6			—		6
Barclays Bank PLC	Barclays Canada Banks Index††	Pay	3 Month CDOR plus 0.00%	Quarterly	5/8/19		796		(5	)		—		(5	)
Barclays Bank PLC	Barclays Custom Short Elevators Index††	Pay	3 Month USD LIBOR plus 0.25%	Quarterly	3/6/19	$	248		(1	)		—		(1	)
BNP Paribas SA	Barclays Elevators Index††	Pay	3 Month USD LIBOR plus 0.03%	Quarterly	5/1/19		550		15			—		15
BNP Paribas SA	Barclays Elevators Index††	Pay	3 Month USD LIBOR plus 0.03%	Quarterly	5/1/19		550		13			—		13
BNP Paribas SA	Barclays Elevators Index††	Pay	3 Month USD LIBOR plus 0.03%	Quarterly	5/1/19		500		(5	)		—		(5	)
BNP Paribas SA	BNP Custom Short U.S. Machinery Index††	Pay	3 Month USD LIBOR plus 0.25%	Quarterly	11/21/18		157		12			—		12
BNP Paribas SA	BNP Custom Short U.S. Machinery Index††	Pay	3 Month USD LIBOR plus 0.25%	Quarterly	11/21/18		292		22			—		22
BNP Paribas SA	MSCI Emerging Market Index	Receive	3 Month USD LIBOR plus 0.62%	Quarterly	1/24/19		8,777		(837	)		—		(837	)
BNP Paribas SA	MSCI U.S. Banks Gross Total Return Index	Pay	3 Month USD LIBOR plus 0.14%	Quarterly	6/14/19		2,050		54			—		54
BNP Paribas SA	MSCI U.S. Banks Gross Total Return Index	Pay	3 Month USD LIBOR plus 0.14%	Quarterly	6/14/19		2,060		80			—		80
Goldman Sachs International	GS Custom Short Non-U.S. Machinery Index††	Pay	3 Month USD LIBOR plus 0.13%	Quarterly	11/23/18		692		66			—		66
JPMorgan Chase Bank NA	Alerian MLP Total Return Index	Receive	3 Month USD LIBOR plus 0.48%	Quarterly	5/30/19		524		(—	@)		—		(—	@)
JPMorgan Chase Bank NA	JPM Custom China Tier 2 Banks Index††	Pay	3 Month USD LIBOR plus 0.10%	Quarterly	3/15/19		741		70			—		70
JPMorgan Chase Bank NA	JPM Custom Long U.S. Defensives Index††	Receive	3 Month USD LIBOR plus 0.55%	Quarterly	11/20/18		150		4			—		4
JPMorgan Chase Bank NA	JPM Custom Long U.S. Defensives Index††	Receive	3 Month USD LIBOR plus 0.55%	Quarterly	11/20/18		685		18			—		18
JPMorgan Chase Bank NA	JPM Custom Long U.S. Defensives Index††	Receive	3 Month USD LIBOR plus 0.55%	Quarterly	11/20/18		868		23			—		23
JPMorgan Chase Bank NA	JPM Custom Short U.S. Cyclicals Index††	Pay	3 Month USD LIBOR plus 0.40%	Quarterly	11/20/18		839		8			—		8
JPMorgan Chase Bank NA	JPM Custom Short U.S. Cyclicals Index††	Pay	3 Month USD LIBOR plus 0.40%	Quarterly	11/20/18		136		1			—		1
JPMorgan Chase Bank NA	JPM Custom Short U.S. Cyclicals Index††	Pay	3 Month USD LIBOR plus 0.40%	Quarterly	11/20/18		707		6			—		6
JPMorgan Chase Bank NA	JPM Defense Contractors Index ††	Pay	3 Month USD LIBOR plus 0.11%	Quarterly	6/17/19		655		43			—		43
JPMorgan Chase Bank NA	MSCI Japan Net Total Return Index	Receive	3 Month USD LIBOR plus 0.25%	Quarterly	2/8/19		6,014		(227	)		—		(227	)
								$	(634	)	$	—	$	(634	)

†† See tables below for details of the equity basket holdings underlying the swap.

The accompanying notes are an integral part of the consolidated financial statements.
21

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

The following table represents the equity basket holdings underlying the total return swap with Barclays Canada Banks Index as of June 30, 2018:

Security Description	Shares		Value (000)		Index Weight
Barclays Canada Banks Index
Bank of Montreal		649	$	50		12.89	%
Bank of Nova Scotia (The)		1,199		68		17.45
Canadian Imperial Bank of Commerce		436		38		9.75
National Bank of Canada		340		16		4.20
Royal Bank of Canada		1,458		110		28.21
Toronto-Dominion Bank (Th)		1,849		107		27.50
Total			$	389		100.00	%

The following table represents the equity basket holdings underlying the total return swap with Barclays Custom Short Elevators Index as of June 30, 2018:

Security Description	Shares		Value (000)		Index Weight
Barclays Custom Short Elevators Index
Fujitec Co., Ltd.		27,700	$	341		2.23	%
Kone Oyj		157,078		8,008		52.22
Schindler Holding AG		31,545		6,792		44.30
Yungtay Engineering Co., Ltd.		121,000		192		1.25
Total			$	15,333		100.00	%

The following table represents the equity basket holdings underlying the total return swap with Barclays Elevators Index as of June 30, 2018:

Security Description	Shares		Value (000)		Index Weight
Barclays Elevators Index
Brunello Cucinelli SpA		94	$	4		0.42	%
Burberry Group PLC		1,174		33		3.39
Christian Dior SE		65		27		2.73
Cie Financiere Richemont SA		1,578		134		13.54
Hermes International		87		53		5.40
HUGO BOSS AG		194		18		1.78
Kering SA		347		196		19.86
LVMH Moet Hennessy Louis Vuitton SE		1,046		348		35.27
Moncler SpA		700		32		3.23
Puma SE		29		17		1.71
Salvatore Ferragamo SpA		465		11		1.15
Swatch Group AG (The)		151		72		7.25
Tapestry, Inc.		782		37		3.70
Tod's SpA		91		6		0.57
Total			$	988		100.00	%

The following table represents the equity basket holdings underlying the total return swap with BNP Custom Short U.S. Machinery Index as of June 30, 2018:

Security Description	Shares		Value (000)		Index Weight
BNP Custom Short U.S. Machinery Index
AGCO Corp.		3,061	$	186		1.56	%
Apergy Corp.		2,987		125		1.04
Caterpillar, Inc.		22,821		3,096		25.91
Cummins, Inc.		6,140		817		6.83
Deere & Co.		12,450		1,740		14.57
Dover Corp.		5,975		437		3.66
Flowserve Corp.		5,050		204		1.71
Illinois Tool Works, Inc.		13,111		1,816		15.20
Ingersoll-Rand PLC		9,543		856		7.17
nVent Electric PLC		6,986		175		1.47
PACCAR, Inc.		13,155		815		6.82
Parker-Hannifin Corp.		5,113		797		6.67
Pentair PLC		6,986		294		2.46
SPX Corp.		1,626		57		0.48
SPX FLOW, Inc.		1,599		70		0.59
Xylem, Inc.		6,850		462		3.86
Total			$	11,947		100.00	%

The following table represents the equity basket holdings underlying the total return swap with GS Custom Short Non-U.S. Machinery Index as of June 30, 2018:

Security Description	Shares		Value (000)		Index Weight
GS Custom Short Non-U.S. Machinery Index
Alfa Laval AB		915	$	22		2.38	%
Atlas Copco AB		2,617		76		8.34
CNH Industrial N.V.		3,009		32		3.50
CRRC Corp Ltd.		103,323		80		8.77
Doosan Infracore Co., Ltd.		447		4		0.42
Epiroc AB		2,617		27		3.00
GEA Group AG		423		14		1.56
Hino Motors Ltd.		1,266		14		1.48
Hitachi Construction Machinery Co., Ltd.		470		15		1.67
Hiwin Technologies Corp.		608		7		0.79
Hyundai Heavy Industries Co., Ltd.		146		13		1.46
Hyundai Mipo Dockyard Co., Ltd.		44		3		0.37
IMI PLC		602		9		0.98
JTEKT Corp.		753		10		1.12
Kawasaki Heavy Industries Ltd.		365		11		1.18
Komatsu Ltd.		2,129		61		6.66
Kone Oyj		1,156		59		6.45
Kubota Corp.		2,719		43		4.68
MAN SE		323		37		4.00
Melrose Industries PLC		4,303		12		1.32
Metso Oyj		332		11		1.22
NGK Insulators Ltd.		719		13		1.40
Samsung Heavy Industries Co., Ltd.		1,298		8		0.91
Sandvik AB		2,767		49		5.38

The accompanying notes are an integral part of the consolidated financial statements.
22

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Security Description	Shares		Value (000)		Index Weight
GS Custom Short Non-U.S. Machinery Index (cont'd)
Schindler Holding AG		233	$	50		5.48	%
SMC Corp.		148		54		5.94
Sulzer AG		104		13		1.39
Sumitomo Heavy Industries Ltd.		271		9		1.00
Volvo AB		4,695		75		8.22
Wartsila Oyj Abp		1,307		26		2.81
Weichai Power Co., Ltd.		19,266		27		2.91
Weir Group PLC (The)		496		13		1.43
Yangzijiang Shipbuilding Holdings Ltd.		8,648		6		0.63
Zoomlion Co., Ltd.		24,564		10		1.15
Total			$	913		100.00	%

The following table represents the equity basket holdings underlying the total return swap with JPM Custom China Tier 2 Banks Index as of June 30, 2018:

Security Description	Shares		Value (000)		Index Weight
JPM Custom China Tier 2 Banks Index
Bank of Communications Co., Ltd.		230,551	$	177		13.18	%
China CITIC Bank Corp., Ltd.		743,160		465		34.71
China Everbright Bank Co., Ltd.		57,105		25		1.83
China Merchants Bank Co., Ltd.		131,691		486		36.26
China Minsheng Banking Corp., Ltd.		198,298		142		10.58
Chongqing Rural Commercial Bank Co., Ltd.		77,532		46		3.44
Total			$	1,341		100.00	%

The following table represents the equity basket holdings underlying the total return swap with JPM Custom Long U.S. Defensives Index as of June 30, 2018:

Security Description	Shares		Value (000)		Index Weight
JPM Custom Long U.S. Defensives Index
Abbott Laboratories		1,407	$	86		0.87	%
AbbVie, Inc.		1,291		120		1.22
AES Corp.		2,315		31		0.31
Aetna, Inc.		269		49		0.50
Agilent Technologies, Inc.		260		16		0.16
Alexion Pharmaceuticals, Inc.		181		22		0.23
Align Technology, Inc.		58		20		0.20
Allergan PLC		271		45		0.46
Alliant Energy Corp.		810		34		0.35
Altria Group, Inc.		2,694		153		1.55
Ameren Corp.		851		52		0.53
American Electric Power Co., Inc.		1,724		119		1.21
American Water Works Co., Inc.		625		53		0.54
AmerisourceBergen Corp.		131		11		0.11
Amgen, Inc.		591		109		1.10
Anthem, Inc.		213		51		0.51
Archer-Daniels-Midland Co.		790		36		0.37
AT&T, Inc.		38,194		1,226		12.42
Baxter International, Inc.		406		30		0.30

Security Description	Shares		Value (000)		Index Weight
JPM Custom Long U.S. Defensives Index (cont'd)
Becton Dickinson and Co.		214	$	51		0.52	%
Biogen, Inc.		171		50		0.50
Boston Scientific Corp.		1,111		36		0.37
Bristol-Myers Squibb Co.		1,328		73		0.75
Brown-Forman Corp.		344		17		0.17
Campbell Soup Co.		272		11		0.11
Cardinal Health, Inc.		256		13		0.13
Celgene Corp.		634		50		0.51
Centene Corp.		140		17		0.18
CenterPoint Energy, Inc.		1,511		42		0.42
CenturyLink, Inc.		6,044		113		1.14
Cerner Corp.		255		15		0.16
Church & Dwight Co., Inc.		350		19		0.19
Cigna Corp.		204		35		0.35
Clorox Co. (The)		181		24		0.25
CMS Energy Corp.		989		47		0.47
Coca-Cola Co. (The)		5,391		236		2.40
Colgate-Palmolive Co.		1,237		80		0.81
Conagra Brands, Inc.		584		21		0.21
Consolidated Edison, Inc.		1,086		85		0.86
Constellation Brands, Inc.		241		53		0.53
Cooper Cos., Inc. (The)		40		9		0.10
Costco Wholesale Corp.		616		129		1.30
Coty, Inc.		662		9		0.09
CVS Health Corp.		1,428		92		0.93
Danaher Corp.		495		49		0.50
DaVita, Inc.		124		9		0.09
DENTSPLY SIRONA, Inc.		186		8		0.08
Dominion Energy, Inc.		2,253		154		1.56
DTE Energy Co.		629		65		0.66
Duke Energy Corp.		2,454		194		1.97
Edison International		1,142		72		0.73
Edwards Lifesciences Corp.		171		25		0.25
Eli Lilly & Co.		785		67		0.68
Entergy Corp.		629		51		0.52
Envision Healthcare Corp.		98		4		0.04
Estee Lauder Cos., Inc. (The)		314		45		0.45
Eversource Energy		1,111		65		0.66
Exelon Corp.		3,366		143		1.45
Express Scripts Holding Co.		468		36		0.37
FirstEnergy Corp.		1,558		56		0.57
General Mills, Inc.		810		36		0.36
Gilead Sciences, Inc.		1,058		75		0.76
HCA Healthcare, Inc.		234		24		0.24
Henry Schein, Inc.		129		9		0.09
Hershey Co. (The)		198		18		0.19
Hologic, Inc.		227		9		0.09
Hormel Foods Corp.		379		14		0.14
Humana, Inc.		117		35		0.35
IDEXX Laboratories, Inc.		71		15		0.16
Illumina, Inc.		118		33		0.33

The accompanying notes are an integral part of the consolidated financial statements.
23

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Security Description	Shares		Value (000)		Index Weight
JPM Custom Long U.S. Defensives Index (cont'd)
Incyte Corp.		138	$	9		0.09	%
Intuitive Surgical, Inc.		91		44		0.44
IQVIA Holdings, Inc.		123		12		0.12
JM Smucker Co. (The)		160		17		0.17
Johnson & Johnson		2,174		264		2.67
Kellogg Co.		349		24		0.25
Keurig Dr. Pepper, Inc.		255		31		0.32
Kimberly-Clark Corp.		496		52		0.53
Kraft Heinz Co. (The)		838		53		0.53
Kroger Co. (The)		1,260		36		0.36
Laboratory Corp. of America Holdings		82		15		0.15
McCormick & Co., Inc.		167		19		0.20
McKesson Corp.		170		23		0.23
Medtronic PLC		1,097		94		0.95
Merck & Co., Inc.		2,215		134		1.36
Mettler-Toledo International, Inc.		21		12		0.12
Molson Coors Brewing Co.		259		18		0.18
Mondelez International, Inc.		2,117		87		0.88
Monster Beverage Corp.		582		33		0.34
Mylan N.V.		434		16		0.16
NextEra Energy, Inc.		1,641		274		2.78
NiSource, Inc.		1,143		30		0.30
NRG Energy, Inc.		1,054		32		0.33
Patterson Cos., Inc.		67		2		0.02
PepsiCo, Inc.		2,006		218		2.21
PerkinElmer, Inc.		89		7		0.07
Perrigo Co., PLC		107		8		0.08
Pfizer, Inc.		4,834		175		1.78
PG&E Corp.		1,798		77		0.78
Philip Morris International, Inc.		2,181		176		1.78
Pinnacle West Capital Corp.		391		31		0.32
PPL Corp.		2,395		68		0.69
Procter & Gamble Co. (The)		3,581		280		2.83
Public Service Enterprise Group, Inc.		1,774		96		0.97
Quest Diagnostics, Inc.		110		12		0.12
Regeneron Pharmaceuticals, Inc.		62		21		0.22
ResMed, Inc.		115		12		0.12
SCANA Corp.		501		19		0.20
Sempra Energy		880		102		1.03
Southern Co. (The)		3,504		162		1.64
Stryker Corp.		261		44		0.45
Sysco Corp.		682		47		0.47
Thermo Fisher Scientific, Inc.		324		67		0.68
Tyson Foods, Inc.		406		28		0.28
UnitedHealth Group, Inc.		783		192		1.95
Universal Health Services, Inc.		72		8		0.08
Varian Medical Systems, Inc.		74		8		0.09
Verizon Communications, Inc.		25,376		1,277		12.93
Vertex Pharmaceuticals, Inc.		204		35		0.35
Walgreens Boots Alliance, Inc.		1,219		73		0.74
Walmart, Inc.		2,056		176		1.78

Security Description	Shares		Value (000)		Index Weight
JPM Custom Long U.S. Defensives Index (cont'd)
Waters Corp.		65	$	13		0.13	%
WEC Energy Group, Inc.		1,106		72		0.72
Xcel Energy, Inc.		1,780		81		0.82
Zimmer Biomet Holdings, Inc.		164		18		0.19
Zoetis, Inc.		398		34		0.34
Total			$	9,869		100.00	%

The following table represents the equity basket holdings underlying the total return swap with JPM Custom Short U.S. Cyclicals Index as of June 30, 2018:

Security Description	Shares		Value (000)		Index Weight
JPM Custom Short U.S. Cyclicals Index
3M Co.		696	$	137		1.30	%
Accenture PLC		286		47		0.44
Activision Blizzard, Inc.		350		27		0.25
Acuity Brands, Inc.		49		6		0.05
Adobe Systems, Inc.		229		56		0.53
Advance Auto Parts, Inc.		72		10		0.09
Advanced Micro Devices, Inc.		373		6		0.05
Air Products & Chemicals, Inc.		897		140		1.32
Akamai Technologies, Inc.		79		6		0.05
Alaska Air Group, Inc.		144		9		0.08
Albemarle Corp.		455		43		0.41
Allegion PLC		111		9		0.08
Alliance Data Systems Corp.		22		5		0.05
Alphabet, Inc.		140		156		1.48
Alphabet, Inc.		138		156		1.47
Amazon.com, Inc.		390		663		6.27
American Airlines Group, Inc.		506		19		0.18
AMETEK, Inc.		269		19		0.18
Amphenol Corp.		141		12		0.12
Analog Devices, Inc.		170		16		0.15
ANSYS, Inc.		39		7		0.06
AO Smith Corp.		171		10		0.10
Apergy Corp.		91		4		0.04
Apple, Inc.		2,392		443		4.19
Applied Materials, Inc.		494		23		0.22
Aptiv PLC		261		24		0.23
Arconic, Inc.		493		8		0.08
Autodesk, Inc.		102		13		0.13
Automatic Data Processing, Inc.		206		28		0.26
AutoZone, Inc.		27		18		0.17
Avery Dennison Corp.		364		37		0.35
Ball Corp.		1,448		51		0.49
Best Buy Co., Inc.		260		19		0.18
Boeing Co. (The)		648		217		2.06
Booking Holdings, Inc.		48		97		0.92
BorgWarner, Inc.		194		8		0.08
Broadcom, Inc.		188		46		0.43
CA, Inc.		146		5		0.05

The accompanying notes are an integral part of the consolidated financial statements.
24

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Security Description	Shares		Value (000)		Index Weight
JPM Custom Short U.S. Cyclicals Index (cont'd)
Cadence Design Systems, Inc.		130	$	6		0.05	%
CarMax, Inc.		179		13		0.12
Carnival Corp.		399		23		0.22
Caterpillar, Inc.		690		94		0.89
CBS Corp.		356		20		0.19
CF Industries Holdings, Inc.		960		43		0.40
CH Robinson Worldwide, Inc.		164		14		0.13
Charter Communications, Inc.		197		58		0.55
Chipotle Mexican Grill, Inc.		25		11		0.10
Cintas Corp.		100		19		0.18
Cisco Systems, Inc.		2,316		100		0.94
Citrix Systems, Inc.		67		7		0.07
Cognizant Technology Solutions Corp.		274		22		0.21
Comcast Corp.		4,605		151		1.43
Corning, Inc.		418		11		0.11
CSX Corp.		1,066		68		0.64
Cummins, Inc.		184		24		0.23
Darden Restaurants, Inc.		123		13		0.13
Deere & Co.		373		52		0.49
Delphi Technologies PLC		87		4		0.04
Delta Air Lines, Inc.		777		38		0.36
Discovery, Inc.		199		5		0.05
Discovery, Inc.		151		4		0.04
DISH Network Corp.		223		7		0.07
Dollar General Corp.		255		25		0.24
Dollar Tree, Inc.		232		20		0.19
Dover Corp.		182		13		0.13
DowDuPont, Inc.		9,605		633		5.99
DR Horton, Inc.		333		14		0.13
DXC Technology Co.		132		11		0.10
Eastman Chemical Co.		596		60		0.56
Eaton Corp PLC		519		39		0.37
eBay, Inc.		461		17		0.16
Ecolab, Inc.		1,072		150		1.42
Electronic Arts, Inc.		143		20		0.19
Emerson Electric Co.		747		52		0.49
Equifax, Inc.		140		18		0.17
Expedia Group, Inc.		120		14		0.14
Expeditors International of Washington I		211		15		0.15
F5 Networks, Inc.		29		5		0.05
Facebook, Inc.		1,098		213		2.02
Fastenal Co.		336		16		0.15
FedEx Corp.		288		65		0.62
Fidelity National Information Services I		154		16		0.16
Fiserv, Inc.		194		14		0.14
FLIR Systems, Inc.		64		3		0.03
Flowserve Corp.		152		6		0.06
Fluor Corp.		163		8		0.08
FMC Corp.		552		49		0.47
Foot Locker, Inc.		121		6		0.06
Ford Motor Co.		3,829		42		0.40

Security Description	Shares		Value (000)			Index Weight
JPM Custom Short U.S. Cyclicals Index (cont'd)
Fortive Corp.		356	$	27			0.26	%
Fortune Brands Home & Security, Inc.		180		10			0.09
Freeport-McMoRan, Inc.		5,539		96			0.91
Gap, Inc. (The)		215		7			0.07
Garmin Ltd.		109		7			0.06
Gartner, Inc.		42		6			0.05
General Dynamics Corp.		325		61			0.57
General Electric Co.		10,102		137			1.30
General Motors Co.		1,284		51			0.48
Genuine Parts Co.		144		13			0.13
Global Payments, Inc.		71		8			0.07
Goodyear Tire & Rubber Co. (The)		246		6			0.05
H&R Block, Inc.		205		5			0.04
Hanesbrands, Inc.		357		8			0.07
Harley-Davidson, Inc.		167		7			0.07
Harris Corp.		55		8			0.08
Hasbro, Inc.		111		10			0.10
Hewlett Packard Enterprise Co.		761		11			0.11
Hilton Worldwide Holdings, Inc.		200		16			0.15
Home Depot, Inc. (The)		1,154		225			2.13
Honeywell International, Inc.		889		128			1.21
HP, Inc.		774		18			0.17
IHS Markit Ltd.		424		22			0.21
Illinois Tool Works, Inc.		361		50			0.47
Ingersoll-Rand PLC		296		27			0.25
Intel Corp.		2,176		108			1.02
International Business Machines Corp.		401		56			0.53
International Flavors & Fragrances, Inc.		325		40			0.38
International Paper Co.		1,700		89			0.84
Interpublic Group of Cos., Inc. (The)		385		9			0.09
Intuit, Inc.		113		23			0.22
Jacobs Engineering Group, Inc.		140		9			0.08
JB Hunt Transport Services, Inc.		100		12			0.12
Johnson Controls International PLC		1,088		36			0.34
Juniper Networks, Inc.		176		5			0.05
Kansas City Southern		123		13			0.12
KLA-Tencor Corp.		73		7			0.07
Kohl's Corp.		165		12			0.11
L Brands, Inc.		244		9			0.09
L3 Technologies, Inc.		91		18			0.17
Lam Research Corp.		75		13			0.12
Leggett & Platt, Inc.		130		6			0.05
Lennar Corp.		199		10			0.10
Lennar Corp.		4		—	@		—	@@
LKQ Corp.		302		10			0.09
Lockheed Martin Corp.		292		86			0.82
Lowe's Cos., Inc.		827		79			0.75
LyondellBasell Industries N.V.		1,336		147			1.39
Macy's, Inc.		298		11			0.11
Marriott International, Inc.		306		39			0.37
Martin Marietta Materials, Inc.		259		58			0.55

The accompanying notes are an integral part of the consolidated financial statements.
25

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Security Description	Shares		Value (000)		Index Weight
JPM Custom Short U.S. Cyclicals Index (cont'd)
Masco Corp.		372	$	14		0.13	%
Mastercard, Inc.		432		85		0.80
Mattel, Inc.		336		6		0.05
McDonald's Corp.		793		124		1.18
MGM Resorts International		507		15		0.14
Michael Kors Holdings Ltd.		148		10		0.09
Microchip Technology, Inc.		108		10		0.09
Micron Technology, Inc.		516		27		0.26
Microsoft Corp.		3,567		352		3.33
Mohawk Industries, Inc.		62		13		0.13
Mosaic Co. (The)		1,445		41		0.38
Motorola Solutions, Inc.		75		9		0.08
NetApp, Inc.		125		10		0.09
Netflix, Inc.		423		166		1.57
Newell Brands, Inc.		480		12		0.12
Newmont Mining Corp.		2,195		83		0.78
News Corp.		374		6		0.05
News Corp.		119		2		0.02
Nielsen Holdings PLC		392		12		0.11
NIKE, Inc.		1,286		102		0.97
Nordstrom, Inc.		114		6		0.06
Norfolk Southern Corp.		336		51		0.48
Northrop Grumman Corp.		203		62		0.59
Norwegian Cruise Line Holdings Ltd.		174		8		0.08
Nucor Corp.		1,315		82		0.78
nVent Electric PLC		193		5		0.05
NVIDIA Corp.		278		66		0.62
Omnicom Group, Inc.		226		17		0.16
Oracle Corp.		1,399		62		0.58
O'Reilly Automotive, Inc.		86		24		0.22
PACCAR, Inc.		410		25		0.24
Packaging Corp of America		388		43		0.41
Parker-Hannifin Corp.		155		24		0.23
Paychex, Inc.		148		10		0.10
PayPal Holdings, Inc.		523		44		0.41
Pentair PLC		193		8		0.08
Perspecta, Inc.		66		1		0.01
PPG Industries, Inc.		1,056		110		1.04
PulteGroup, Inc.		272		8		0.07
PVH Corp.		76		11		0.11
Qorvo, Inc.		59		5		0.04
QUALCOMM, Inc.		684		38		0.36
Quanta Services, Inc.		176		6		0.06
Ralph Lauren Corp.		54		7		0.06
Raytheon Co.		339		65		0.62
Red Hat, Inc.		82		11		0.10
Republic Services, Inc.		267		18		0.17
Robert Half International, Inc.		147		10		0.09
Rockwell Automation, Inc.		150		25		0.24
Roper Technologies, Inc.		119		33		0.31
Ross Stores, Inc.		381		32		0.31

Security Description	Shares		Value (000)		Index Weight
JPM Custom Short U.S. Cyclicals Index (cont'd)
Royal Caribbean Cruises Ltd.		168	$	17		0.16	%
salesforce.com, Inc.		316		43		0.41
Seagate Technology PLC		133		8		0.07
Sealed Air Corp.		782		33		0.31
Sherwin-Williams Co. (The)		338		138		1.30
Signet Jewelers Ltd.		59		3		0.03
Skyworks Solutions, Inc.		85		8		0.08
Snap-on, Inc.		67		11		0.10
Southwest Airlines Co.		642		33		0.31
Stanley Black & Decker, Inc.		179		24		0.22
Starbucks Corp.		1,414		69		0.65
Stericycle, Inc.		100		7		0.06
Symantec Corp.		285		6		0.06
Synopsys, Inc.		70		6		0.06
Tapestry, Inc.		277		13		0.12
Target Corp.		535		41		0.39
TE Connectivity Ltd.		164		15		0.14
Texas Instruments, Inc.		459		51		0.48
Textron, Inc.		309		20		0.19
Tiffany & Co.		100		13		0.12
TJX Cos., Inc. (The)		623		59		0.56
Total System Services, Inc.		78		7		0.06
Tractor Supply Co.		124		9		0.09
TransDigm Group, Inc.		56		19		0.18
TripAdvisor, Inc.		106		6		0.06
Twenty-First Century Fox, Inc.		1,030		51		0.48
Twenty-First Century Fox, Inc.		430		21		0.20
Ulta Beauty, Inc.		57		13		0.13
Under Armour, Inc.		181		4		0.04
Under Armour, Inc.		182		4		0.04
Union Pacific Corp.		934		132		1.25
United Continental Holdings, Inc.		302		21		0.20
United Parcel Service, Inc.		804		85		0.81
United Rentals, Inc.		99		15		0.14
United Technologies Corp.		867		108		1.03
VeriSign, Inc.		40		5		0.05
Verisk Analytics, Inc.		181		19		0.18
VF Corp.		320		26		0.25
Viacom, Inc.		345		10		0.10
Visa, Inc.		847		112		1.06
Vulcan Materials Co.		545		70		0.67
Walt Disney Co. (The)		1,511		158		1.50
Waste Management, Inc.		472		38		0.36
Western Digital Corp.		137		11		0.10
Western Union Co. (The)		215		4		0.04
WestRock Co.		1,046		60		0.56
Whirlpool Corp.		71		10		0.10
WW Grainger, Inc.		61		19		0.18
Wyndham Destinations, Inc.		101		4		0.04
Wyndham Hotels & Resorts, Inc.		101		6		0.06
Wynn Resorts Ltd.		78		13		0.12

The accompanying notes are an integral part of the consolidated financial statements.
26

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Global Strategist Portfolio

Security Description	Shares		Value (000)		Index Weight
JPM Custom Short U.S. Cyclicals Index (cont'd)
Xerox Corp.		99	$	2		0.02	%
Xilinx, Inc.		115		8		0.07
Xylem, Inc.		210		14		0.13
Yum! Brands, Inc.		338		26		0.25
Total			$	10,564		100.00	%

The following table represents the equity basket holdings underlying the total return swap with JPM Defense Contractors Index as of June 30, 2018:

Security Description	Shares		Value (000)		Index Weight
JPM Defense Contractors Index
General Dynamics Corp.		10,111	$	1,885		20.08	%
Harris Corp.		4,030		582		6.20
Huntington Ingalls Industries, Inc.		1,519		329		3.51
Lockheed Martin Corp.		9,713		2,869		30.57
Northrop Grumman Corp.		5,936		1,826		19.46
Raytheon Co.		9,806		1,894		20.18
Total			$	9,385		100.00	%

@    Value is less than $500.

@@  Index weight is less than 0.005%.

*    Cleared swap agreement, the broker is Morgan Stanley & Co., LLC.

CDOR  Canadian Dealer Offered Rate.

JIBAR    Johannesburg Interbank Agreed Rate.

KORIBOR  Korea Interbank Offered Rate.

LIBOR  London Interbank Offered Rate.

TIIE    Interbank Equilibrium Interest Rate.

AUD  — Australian Dollar

BRL  — Brazilian Real

CAD  — Canadian Dollar

CHF  — Swiss Franc

CLP  — Chilean Peso

CNH  — Chinese Yuan Renminbi Offshore

CZK  — Czech Koruna

DKK  — Danish Krone

EUR  — Euro

GBP  — British Pound

HKD  — Hong Kong Dollar

HUF  — Hungarian Forint

IDR  — Indonesian Rupiah

ILS  — Israeli Shekel

INR  — Indian Rupee

JPY  — Japanese Yen

KRW  — South Korean Won

MXN  — Mexican Peso

MYR  — Malaysian Ringgit

NOK  — Norwegian Krone

NZD  — New Zealand Dollar

PLN  — Polish Zloty

RUB  — Russian Ruble

SEK  — Swedish Krona

SGD  — Singapore Dollar

THB  — Thai Baht

TRY  — Turkish Lira

TWD  — Taiwan Dollar

USD  — United States Dollar

ZAR  — South African Rand

Portfolio Composition

Classification	Percentage of Total Investments
Fixed Income Securities		54.0	%
Common Stocks		37.4
Short-Term Investments		5.9
Other**		2.7
Total Investments		100.0	%***

**  Industries and/or investment types representing less than 5% of total investments.

***  Does not include open long/short futures contracts with a value of approximately $42,109,000 and net unrealized depreciation of approximately $355,000. Does not include open foreign currency forward exchange contracts with net unrealized appreciation of approximately $180,000 and does not include open swap agreements with net unrealized depreciation of approximately $819,000.

The accompanying notes are an integral part of the consolidated financial statements.
27

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Global Strategist Portfolio

Consolidated Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $104,516)	$	112,626
Investment in Security of Affiliated Issuer, at Value (Cost $4,889)		4,889
Total Investments in Securities, at Value (Cost $109,405)		117,515
Foreign Currency, at Value (Cost $205)		198
Cash		1
Receivable for Variation Margin on Futures Contracts		1,725
Receivable for Investments Sold		1,510
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		1,084
Interest Receivable		961
Unrealized Appreciation on Swap Agreements		444
Tax Reclaim Receivable		132
Dividends Receivable		64
Receivable for Variation Margin on Swap Agreements		45
Receivable from Affiliate		10
Receivable for Swap Agreements Termination		7
Receivable for Fund Shares Sold		—	@
Other Assets		23
Total Assets		123,719
Liabilities:
Payable for Investments Purchased		3,295
Unrealized Depreciation on Swap Agreements		1,091
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		904
Due to Broker		90
Payable for Advisory Fees		74
Payable for Professional Fees		70
Payable for Fund Shares Redeemed		49
Payable for Servicing Fees		37
Deferred Capital Gain Country Tax		31
Payable for Custodian Fees		18
Payable for Administration Fees		8
Payable for Transfer Agency Fees		3
Payable for Directors' Fees and Expenses		2
Payable for Distribution Fees — Class II Shares		2
Other Liabilities		39
Total Liabilities		5,713
NET ASSETS	$	118,006
Net Assets Consist of:
Paid-in-Capital	$	97,155
Accumulated Undistributed Net Investment Income		2,529
Accumulated Undistributed Net Realized Gain		11,254
Unrealized Appreciation (Depreciation) on:
Investments (Net of $31 of Deferred Capital Gain Country Tax)		8,079
Futures Contracts		(355	)
Swap Agreements		(819	)
Foreign Currency Forward Exchange Contracts		180
Foreign Currency Translation		(17	)
Net Assets	$	118,006
CLASS I:
Net Assets	$	98,195
Net Asset Value, Offering and Redemption Price Per Share Applicable to 8,918,931 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	11.01
CLASS II:
Net Assets	$	19,811
Net Asset Value, Offering and Redemption Price Per Share Applicable to 1,809,584 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	10.95

@  Amount is less than $500.

The accompanying notes are an integral part of the consolidated financial statements.
28

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Global Strategist Portfolio

Consolidated Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers	$	1,057
Dividends from Securities of Unaffiliated Issuers (Net of $50 of Foreign Taxes Withheld)		680
Dividends from Security of Affiliated Issuer (Note H)		76
Total Investment Income		1,813
Expenses:
Advisory Fees (Note B)		464
Servicing Fees (Note D)		95
Professional Fees		91
Custodian Fees (Note G)		84
Administration Fees (Note C)		50
Pricing Fees		49
Distribution Fees — Class II Shares (Note E)		26
Shareholder Reporting Fees		13
Transfer Agency Fees (Note F)		5
Directors' Fees and Expenses		3
Other Expenses		8
Total Expenses		888
Waiver of Advisory Fees (Note B)		(306	)
Waiver of Distribution Fees — Class II Shares (Note E)		(16	)
Rebate from Morgan Stanley Affiliate (Note H)		(9	)
Net Expenses		557
Net Investment Income		1,256
Realized Gain (Loss):
Investments Sold (Net of $21 of Capital Gain Country Tax)		5,788
Foreign Currency Forward Exchange Contracts		1,227
Foreign Currency Translation		(38	)
Futures Contracts		1,339
Swap Agreements		(1,045	)
Net Realized Gain		7,271
Change in Unrealized Appreciation (Depreciation):
Investments (Net Increase in Deferred Capital Gain Country Tax of $31)		(8,549	)
Foreign Currency Forward Exchange Contracts		41
Foreign Currency Translation		(25	)
Futures Contracts		(693	)
Swap Agreements		(831	)
Net Change in Unrealized Appreciation (Depreciation)		(10,057	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(2,786	)
Net Decrease in Net Assets Resulting from Operations	$	(1,530	)

The accompanying notes are an integral part of the consolidated financial statements.
29

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Global Strategist Portfolio

Consolidated Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,256		$	2,328
Net Realized Gain		7,271			5,987
Net Change in Unrealized Appreciation (Depreciation)		(10,057	)		10,571
Net Increase (Decrease) in Net Assets Resulting from Operations		(1,530	)		18,886
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(1,191	)
Net Realized Gain		—			(1,539	)
Class II:
Net Investment Income		—			(225	)
Net Realized Gain		—			(320	)
Total Distributions		—			(3,275	)
Capital Share Transactions:(1)
Class I:
Subscribed		1,753			3,781
Distributions Reinvested		—			2,730
Redeemed		(9,303	)		(16,623	)
Class II:
Subscribed		250			572
Distributions Reinvested		—			545
Redeemed		(1,879	)		(3,959	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(9,179	)		(12,954	)
Total Increase (Decrease) in Net Assets		(10,709	)		2,657
Net Assets:
Beginning of Period		128,715			126,058
End of Period (Including Accumulated Undistributed Net Investment Income of $2,529 and $1,273)	$	118,006		$	128,715
(1) Capital Share Transactions:
Class I:
Shares Subscribed		156			356
Shares Issued on Distributions Reinvested		—			262
Shares Redeemed		(829	)		(1,582	)
Net Decrease in Class I Shares Outstanding		(673	)		(964	)
Class II:
Shares Subscribed		23			54
Shares Issued on Distributions Reinvested		—			53
Shares Redeemed		(169	)		(378	)
Net Decrease in Class II Shares Outstanding		(146	)		(271	)

The accompanying notes are an integral part of the consolidated financial statements.
30

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Consolidated Financial Highlights

Global Strategist Portfolio

	Class I
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015(2)			2014(2)			2013(2)
Net Asset Value, Beginning of Period	$	11.17		$	9.87		$	9.39		$	10.28		$	11.06		$	9.55
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.11			0.20			0.15			0.17			0.20			0.18
Net Realized and Unrealized Gain (Loss)		(0.27	)		1.38			0.37			(0.81	)		0.06			1.34
Total from Investment Operations		(0.16	)		1.58			0.52			(0.64	)		0.26			1.52
Distributions from and/or in Excess of:
Net Investment Income		—			(0.12	)		—			(0.17	)		(0.09	)		(0.01	)
Net Realized Gain		—			(0.16	)		(0.04	)		(0.08	)		(0.95	)		—
Total Distributions		—			(0.28	)		(0.04	)		(0.25	)		(1.04	)		(0.01	)
Net Asset Value, End of Period	$	11.01		$	11.17		$	9.87		$	9.39		$	10.28		$	11.06
Total Return(4)		(1.34	)%(8)		16.11	%		5.58	%		(6.39	)%		2.15	%		15.95	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	98,195		$	107,015		$	104,197		$	119,248		$	150,001		$	157,059
Ratio of Expenses to Average Net Assets(10)		0.89	%(5)(9)		0.88	%(5)		0.88	%(5)		0.69	%(5)(6)		0.56	%(5)		0.62	%(5)(7)
Ratio of Net Investment Income to Average Net Assets(10)		2.04	%(5)(9)		1.85	%(5)		1.54	%(5)		1.73	%(5)		1.86	%(5)		1.69	%(5)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(9)		0.02	%		0.02	%		0.03	%		0.04	%		0.04	%
Portfolio Turnover Rate		51	%(8)		99	%		105	%		146	%		82	%		168	%
(10) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.39	%(9)		1.42	%		1.43	%		1.47	%		1.42	%		1.32	%
Net Investment Income to Average Net Assets		1.54	%(9)		1.31	%		0.99	%		0.95	%		1.00	%		0.99	%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Not consolidated.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(5)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(6)  Effective August 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.90% for Class I shares. Prior to August 1, 2015, the maximum ratio was 0.60% for Class I shares.

(7)  Effective April 29, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.60% for Class I shares. Prior to April 29, 2013, the maximum ratio was 1.00% for Class I shares.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the consolidated financial statements.
31

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Consolidated Financial Highlights

Global Strategist Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015(2)			2014(2)			2013(2)
Net Asset Value, Beginning of Period	$	11.11		$	9.82		$	9.35		$	10.24		$	11.03		$	9.54
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.11			0.18			0.14			0.16			0.19			0.17
Net Realized and Unrealized Gain (Loss)		(0.27	)		1.38			0.37			(0.82	)		0.06			1.33
Total from Investment Operations		(0.16	)		1.56			0.51			(0.66	)		0.25			1.50
Distributions from and/or in Excess of:
Net Investment Income		—			(0.11	)		—			(0.15	)		(0.09	)		(0.01	)
Net Realized Gain		—			(0.16	)		(0.04	)		(0.08	)		(0.95	)		—
Total Distributions		—			(0.27	)		(0.04	)		(0.23	)		(1.04	)		(0.01	)
Net Asset Value, End of Period	$	10.95		$	11.11		$	9.82		$	9.35		$	10.24		$	11.03
Total Return(4)		(1.35	)%(8)		15.96	%		5.49	%		(6.53	)%		2.00	%		15.75	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	19,811		$	21,700		$	21,861		$	24,481		$	29,604		$	33,988
Ratio of Expenses to Average Net Assets(10)		0.99	%(5)(9)		0.98	%(5)		0.98	%(5)		0.79	%(5)(6)		0.66	%(5)		0.72	%(5)(7)
Ratio of Net Investment Income to Average Net Assets(10)		1.94	%(5)(9)		1.75	%(5)		1.44	%(5)		1.63	%(5)		1.76	%(5)		1.59	%(5)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(9)		0.02	%		0.02	%		0.03	%		0.04	%		0.04	%
Portfolio Turnover Rate		51	%(8)		99	%		105	%		146	%		82	%		168	%
(10) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.64	%(9)		1.67	%		1.68	%		1.76	%		1.77	%		1.67	%
Net Investment Income to Average Net Assets		1.29	%(9)		1.06	%		0.74	%		0.66	%		0.65	%		0.64	%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Not consolidated.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(5)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(6)  Effective August 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class II shares. Prior to August 1, 2015, the maximum ratio was 0.70% for Class II shares.

(7)  Effective April 29, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.70% for Class II shares. Prior to April 29, 2013, the maximum ratio was 1.10% for Class II shares.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the consolidated financial statements.
32

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying consolidated financial statements relate to the Global Strategist Portfolio. The Fund seeks total return and offers two classes of shares – Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its consolidated financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results may differ from those estimates.

The Fund may, consistent with its principal investment strategies, invest up to 25% of its total assets in a wholly-owned subsidiary of the Fund organized as a company under the laws of the Cayman Islands, VIF Global Strategist Cayman Portfolio, Ltd. (the "Subsidiary"). The Subsidiary may invest, directly or indirectly through the use of derivatives, in securities, commodities, commodity-related instruments and other investments, primarily futures, swaps and notes. The Fund is the sole shareholder of the Subsidiary, and it is not currently expected that shares of the Subsidiary will be sold or offered to other investors. The consolidated portfolio of investments and consolidated financial statements include the positions and accounts of the Fund and the Subsidiary. All intercompany accounts and transactions of the Fund and the Subsidiary have been eliminated in consolidation. As of June 30, 2018, the Subsidiary represented approximately $13,171,000 or approximately 11.16% of the total assets of the Fund.

Investments in the Subsidiary are expected to provide the Fund with exposure to the commodity markets within the limitations of Subchapter M of the Code and recent Internal Revenue Service ("IRS") revenue rulings, which require that a mutual fund receive no more than ten percent of its gross in-

come from such investments in order to receive favorable tax treatment as a regulated investment company ("RIC"). Tax treatment of the income received from the Subsidiary may potentially be affected by changes in legislation, regulations or other legally binding authority, which could affect the character, timing and amount of the Fund's taxable income and distributions. If such changes occur, the Fund may need to significantly change its investment strategy and recognize unrealized gains in order to remain qualified for taxation as a RIC, which could adversely affect the Fund.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there

33

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (5) OTC swaps may be valued by an outside pricing service approved by the Directors or quotes from a broker or dealer. Swaps cleared on a clearinghouse or exchange may be valued using the closing price provided by the clearinghouse or exchange; (6) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (7) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (8) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at

least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the

34

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Fixed Income Securities
Agency Adjustable Rate Mortgage	$	—	$	74	$	—	$	74
Agency Fixed Rate Mortgages		—		3,114		—		3,114
Asset-Backed Securities		—		92		—		92
Commercial Mortgage-Backed Securities		—		945		—		945
Corporate Bonds		—		15,591		—		15,591
Mortgages - Other		—		479		—		479
Sovereign		—		34,285		—		34,285
U.S. Treasury Securities		—		8,871		—		8,871
Total Fixed Income Securities		—		63,451		—		63,451
Common Stocks
Aerospace & Defense		1,054		—		—		1,054
Air Freight & Logistics		346		—		—		346
Airlines		17		—		—		17
Auto Components		81		16		—		97

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Common Stocks (cont'd)
Automobiles	$	360	$	—	$	—		$	360
Banks		3,604		—		—			3,604
Beverages		559		—		—			559
Biotechnology		932		—		—			932
Building Products		186		—		—			186
Capital Markets		1,164		—		—			1,164
Chemicals		647		—		—			647
Commercial Services & Supplies		175		—		—			175
Communications Equipment		450		—		—			450
Construction & Engineering		383		—		—			383
Construction Materials		83		—		—			83
Consumer Finance		4,441		—		—			4,441
Containers & Packaging		52		—		—			52
Diversified Financial Services		327		—		—			327
Diversified Telecommunication Services		874		—		—			874
Electric Utilities		443		—		—			443
Electrical Equipment		270		—		—			270
Electronic Equipment, Instruments & Components		77		—		—			77
Energy Equipment & Services		644		—		—	†		644	†
Equity Real Estate Investment Trusts (REITs)		590		—		—			590
Food & Staples Retailing		798		—		—			798
Food Products		571		—		—			571
Gas Utilities		26		—		—			26
Health Care Equipment & Supplies		924		—		—			924
Health Care Providers & Services		1,274		—		—			1,274
Health Care Technology		20		—		—			20
Hotels, Restaurants & Leisure		647		—		—			647
Household Durables		65		—		—			65
Household Products		773		—		—			773
Independent Power & Renewable Electricity Producers		12		—		—			12
Industrial Conglomerates		766		—		—			766
Information Technology Services		1,797		—		—			1,797
Insurance		823		—		—			823
Internet & Direct Marketing Retail		860		—		—			860

35

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Common Stocks (cont'd)
Internet Software & Services	$	1,212		$	—	$	—		$	1,212
Life Sciences Tools & Services		141			—		—			141
Machinery		459			—		—			459
Marine		42			—		—			42
Media		877			—		—			877
Metals & Mining		1,340			—		—			1,340
Multi-Line Retail		146			—		—			146
Multi-Utilities		297			—		—			297
Oil, Gas & Consumable Fuels		2,528			—		—			2,528
Paper & Forest Products		40			—		—			40
Personal Products		276			—		—			276
Pharmaceuticals		2,392			—		—			2,392
Professional Services		411			—		—			411
Real Estate Management & Development		116			—		—			116
Road & Rail		581			—		—			581
Semiconductors & Semiconductor Equipment		852			—		—	@		852
Software		1,309			—		—			1,309
Specialty Retail		861			—		—			861
Tech Hardware, Storage & Peripherals		1,331			—		—			1,331
Textiles, Apparel & Luxury Goods		592			—		—			592
Thrifts & Mortgage Finance		6			—		—			6
Tobacco		540			—		—			540
Trading Companies & Distributors		106			—		—			106
Transportation Infrastructure		207			—		—			207
Water Utilities		20			—		—			20
Wireless Telecommunication Services		138			—		—			138
Total Common Stocks		43,935			16		—	@†		43,951	†
Rights		1			—		—			1
Warrant		—	@		—		—			—	@
Investment Company		3,150			—		—			3,150

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)			Total (000)
Short-Term Investments
Investment Company	$	4,889		$	—		$	—		$	4,889
U.S. Treasury Securities		—			2,073			—			2,073
Total Short-Term Investments		4,889			2,073			—			6,962
Foreign Currency Forward Exchange Contracts		—			1,084			—			1,084
Futures Contracts		94			—			—			94
Interest Rate Swap Agreements		—			59			—			59
Total Return Swap Agreements		—			444			—			444
Total Assets		52,069			67,127			—			119,196	†
Liabilities:
Foreign Currency Forward Exchange Contracts		—			(904	)		—			(904	)
Futures Contracts		(449	)		—			—			(449	)
Interest Rate Swap Agreements		—			(244	)		—			(244	)
Total Return Swap Agreements		—			(1,078	)		—			(1,078	)
Total Liabilities		(449	)		(2,226	)		—			(2,675	)
Total	$	51,620		$	64,901		$	—	@†	$	116,521	†

@  Value is less than $500.

†  Includes one or more securities which are valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, securities with a total value of approximately $12,265,000 transferred from Level 2 to Level 1. Securities that were valued using other significant observable inputs at December 31, 2017 were valued using unadjusted quoted prices at June 30, 2018. At December 31, 2017, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

36

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stocks (000)
Beginning Balance	$	—	@†
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(—	@)
Realized gains (losses)		—
Ending Balance	$	—	@†
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2018	$	(—	@)

@  Value is less than $500.

†  Includes one or more securities which are valued at zero.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign

denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Consolidated Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Consolidated Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Consolidated Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose

37

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a

specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. In addition, the Fund may use cross currency hedging or proxy hedging with respect to currencies in which the Fund has or expects to have portfolio or currency exposure. Cross currency hedges involve the sale of one currency against the positive exposure to a different currency and may be used for hedging purposes or to establish an active exposure to the exchange rate between any two currencies. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying

38

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

Swaps: The Fund may enter into OTC swap contracts or cleared swap transactions. A swap contract is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indices, reference rates, currencies or other instruments. Typically swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). The Fund's obligations or rights under a swap contract entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each party. Cleared swap transactions may help reduce counterparty credit risk. In a cleared swap, the Fund's ultimate counterparty is a clearinghouse rather than a swap dealer, bank or other financial institution. OTC swap agreements are not entered into or traded on exchanges and often there is no central clearing or guaranty function for OTC swaps. These OTC swaps are often subject to credit risk or the risk of default or non-performance by the counterparty. Both OTC and cleared swaps could result in losses if interest rates, foreign currency exchange rates or other factors are not correctly anticipated by the Fund or if the reference index, security or investments do not perform as expected. During the period swap agreements are open, payments are received from or made to

the clearinghouse or counterparty based upon changes in the value of the contract (variation margin). The Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulatory developments require the clearing and exchange-trading of certain standardized swap transactions. Mandatory exchange-trading and clearing is occurring on a phased-in basis.

The Fund's use of swaps during the period included those based on the credit of an underlying security commonly referred to as "credit default swaps." The Fund may be either the buyer or seller in a credit default swap. Where the Fund is the buyer of a credit default swap contract, it would typically be entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the contract only in the event of a default or similar event by the issuer of the debt obligation. If no default occurs, the Fund would have paid to the counterparty a periodic stream of payments over the term of the contract and received no benefit from the contract. When the Fund is the seller of a credit default swap contract, it typically receives the stream of payments but is obligated to pay an amount equal to the par (or other agreed-upon) value of a referenced debt obligation upon the default or similar event by the issuer of the referenced debt obligation. The use of credit default swaps could result in losses to the Fund if the Adviser fails to correctly evaluate the creditworthiness of the issuer of the referenced debt obligation.

If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap agreement and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap agreement less the recovery value of the referenced obligation or underlying securities comprising the referenced index. If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap agreement and deliver the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap agreement less the recovery

39

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

value of the referenced obligation or underlying securities comprising the referenced index. Recovery values are estimated by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specified valuation method, are used to calculate the settlement value. The Fund's maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the swap agreement.

The current credit rating of each individual issuer is listed in the table following the Consolidated Portfolio of Investments and serves as an indicator of the current status of the payment/performance risk of the credit derivative. Alternatively, for credit default swaps on an index of credits, the quoted market prices and current values serve as an indicator of the current status of the payment/performance risk of the credit derivative. Generally, lower credit ratings and increasing market values, in absolute terms, represent a deterioration of the credit and a greater likelihood of an adverse credit event of the issuer.

When the Fund has an unrealized loss on a swap agreement, the Fund has instructed the custodian to pledge cash or liquid securities as collateral with a value approximately equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate. If applicable, cash collateral is included with "Due from (to) Broker" in the Consolidated Statement of Assets and Liabilities.

Upfront payments paid or received by the Fund will be reflected as an asset or liability, respectively, in the Consolidated Statement of Assets and Liabilities.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2018:

	Asset Derivatives Consolidated Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Appreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	1,084
Futures Contracts	Variation Margin on Futures Contracts	Commodity Risk		24	(a)
Futures Contracts	Variation Margin on Futures Contracts	Equity Risk		33	(a)
Futures Contracts	Variation Margin on Futures Contracts	Interest Rate Risk		37	(a)
Swap Agreements	Unrealized Appreciation on Swap Agreements	Equity Risk		444
Swap Agreements	Variation Margin on Swap Agreements	Interest Rate Risk		59	(a)
Total			$	1,681
	Liability Derivatives Consolidated Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Depreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	904
Futures Contracts	Variation Margin on Futures Contracts	Commodity Risk		3	(a)
Futures Contracts	Variation Margin on Futures Contracts	Equity Risk		407	(a)
Futures Contracts	Variation Margin on Futures Contracts	Interest Rate Risk		39	(a)
Swap Agreements	Unrealized Depreciation on Swap Agreements	Equity Risk		1,078
Swap Agreements	Unrealized Depreciation on Swap Agreements	Interest Rate Risk		13
Swap Agreements	Variation Margin on Swap Agreements	Interest Rate Risk		231	(a)
Total			$	2,675

(a)  This amount represents the cumulative appreciation (depreciation) as reported in the Consolidated Portfolio of Investments. The Consolidated Statement of Assets and Liabilities only reflects the current day's net variation margin.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract

40

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

for the six months ended June 30, 2018 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk Foreign Currency Forward	Exchange Contracts	$	1,227
Commodity Risk	Futures Contracts		69
Equity Risk	Futures Contracts		1,513
Interest Rate Risk	Futures Contracts		(243	)
Equity Risk	Swap Agreements		(1,390	)
Interest Rate Risk	Swap Agreements		345
Total		$	1,521
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk Foreign Currency Forward	Exchange Contracts	$	41
Commodity Risk	Futures Contracts		180
Equity Risk	Futures Contracts		(832	)
Interest Rate Risk	Futures Contracts		(41	)
Equity Risk	Swap Agreements		(385	)
Interest Rate Risk	Swap Agreements		(446	)
Total		$	(1,483	)

At June 30, 2018, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Consolidated Statement of Assets and Liabilities
Derivatives(b)	Assets(c) (000)		Liabilities(c) (000)
Foreign Currency Forward Exchange Contracts	$	1,084	$	904
Swap Agreements		444		1,091
Total	$	1,528	$	1,995

(b)  Excludes exchange traded derivatives.

(c)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Consolidated Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of

default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Consolidated Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Received (000)(d)			Net Amount (not less than $0) (000)
Australia and New Zealand Banking Group	$	29		$	(24	)	$	—		$	5
Bank of America NA		91			(28	)		—			63
Bank of Montreal		—	@		—			—			—	@
Barclays Bank PLC		14			(14	)		—			0
BNP Paribas SA		196			(196	)		—			0
Citibank NA		476			(476	)		—			0
Commonwealth Bank of Australia		—	@		(—	@)		—			0
Goldman Sachs International		359			(123	)		(90	)		146
JPMorgan Chase Bank NA		276			(212	)		—			64
Royal Bank of Canada		10			(10	)		—			0
State Street Bank and Trust Co.		—	@		(—	@)		—			0
UBS AG		77			(45	)		—			32
Total	$	1,528		$	(1,128	)	$	(90	)	$	310

41

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

Gross Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Consolidated Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Pledged (000)(d)			Net Amount (not less than $0) (000)
Australia and New Zealand Banking Group	$	24		$	(24	)	$	—		$	0
Bank of America NA		28			(28	)		—			0
Bank of New York Mellon		—	@		—			—			—	@
Barclays Bank PLC		50			(14	)		—			36
BNP Paribas SA		862			(196	)		(664	)		2
Citibank NA		560			(476	)		—			84
Commonwealth Bank of Australia		3			(—	@)		—			3
Credit Suisse International		—	@		—			—			—	@
Goldman Sachs International		123			(123	)		—			0
JPMorgan Chase Bank NA		279			(212	)		(67	)		0
Royal Bank of Canada		14			(10	)		—			4
State Street Bank and Trust Co.		7			(—	@)		—			7
UBS AG		45			(45	)		—			0
Total	$	1,995		$	(1,128	)	$	(731	)	$	136

@  Value is less than $500.

(d)  In some instances, the actual collateral received or pledged may be more than the amount shown here due to overcollateralization.

For the six months ended June 30, 2018, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	73,604,000
Futures Contracts:
Average monthly original value	$	73,529,000
Swap Agreements:
Average monthly notional amount	$	61,679,000

5.  When-Issued/Delayed Delivery Securities: The Fund purchases and sells when-issued and delayed delivery securities. Securities purchased on a when-issued or delayed delivery basis are purchased for delivery beyond the normal settlement date at a stated price and yield, and no income accrues to the Fund on such securities prior to delivery date. Payment and delivery for when-issued and delayed delivery securities can take place a month or more after the date of the transaction. When the Fund enters into a purchase transaction on a when-issued or delayed delivery basis, securities are available for collateral in an amount at least equal in value to the Fund's commitments to purchase such securities.

Purchasing securities on a when-issued or delayed delivery basis may involve a risk that the market price at the time of delivery may be lower than the agreed upon purchase price, in which case there could be an unrealized loss at the time of delivery. Purchasing investments on a when-issued or delayed delivery basis may be considered a form of leverage which may increase the impact that gains (losses) may have on the Fund.

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund owns shares of real estate investment trusts ("REITs") which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Fund holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Fund to further risk of

42

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

loss in the event of a failure to complete the transaction by the counterparty.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2018, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.25% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that the total annual operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares and 1.00% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2018, approximately $306,000 of advisory fees were waived pursuant to this arrangement.

The Adviser provides investment advisory services to the Subsidiary pursuant to the Subsidiary Investment Management Agreement (the "Agreement"). Under the Agreement, the Subsidiary will pay the Adviser at the end of each fiscal quarter, calculated by applying a quarterly rate, based on the annual rate of 0.05%, to the average daily net assets of the Subsidiary.

The Adviser has agreed to waive its advisory fees by the amount of advisory fees it receives from the Subsidiary.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to

the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.15% of the 0.25% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action is appropriate. For the six months ended June 30, 2018, this waiver amounted to approximately $16,000.

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018, purchases and sales of investment securities for the Fund, other than long-term U.S. Government $41,683,000 and $48,476,000, respectively. For the six months ended June 30, 2018, purchases and sales of long-term U.S. Government securities were approximately $17,867,000 and $13,441,000, respectively.

43

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by approximately $9,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	13,399	$	35,240	$	43,750	$	76

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	4,889

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income.

Accordingly, no provision for federal income taxes is required in the consolidated financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for consolidated financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the consolidated financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Consolidated Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,416	$	1,859	$	—	$	586

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, tax adjustments on certain equity securities designated as issued by passive foreign investment companies, swap transactions, foreign capital gains tax and tax adjustments related to the

44

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Consolidated Financial Statements (cont'd)

Subsidiary, resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Undistributed Net Investment Income (000)			Accumulated Undistributed Net Realized Gain (000)		Paid-in- Capital (000)
$	(779	)	$	779	$	—

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	1,352	$	5,269

During the year ended December 31, 2017, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $1,814,000.

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 76.0%.

L. Accounting Pronouncement: In March 2017, FASB issued an Accounting Standard Update, ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities (the "ASU") which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The ASU does not require any accounting change for debt securities held at a discount; the discount continues to be accreted to maturity. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. At this time, management is evaluating the implications of these changes on the financial statements.

45

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the three- and five-year periods but better than its peer group average for the one-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee was higher than its peer group average and the Fund's actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley

46

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited) (cont'd)

Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

47

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
30 Rockefeller Plaza
New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFIMSAN
2190995 EXP. 08.31.19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Growth Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Expense Example		2
Portfolio of Investments		3
Statement of Assets and Liabilities		5
Statement of Operations		6
Statements of Changes in Net Assets		7
Financial Highlights		8
Notes to Financial Statements		10
Investment Advisory Agreement Approval		20
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Expense Example (unaudited)

Growth Portfolio

As a shareholder of the Growth Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which may include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Growth Portfolio Class I	$	1,000.00	$	1,193.00	$	1,021.03	$	4.13	$	3.81		0.76	%
Growth Portfolio Class II		1,000.00		1,191.60		1,019.79		5.49		5.06		1.01

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments

Growth Portfolio

	Shares		Value (000)
Common Stocks (94.4%)
Biotechnology (1.5%)
Alnylam Pharmaceuticals, Inc. (a)		20,691	$	2,038
Bluebird Bio, Inc. (a)		3,068		482
Editas Medicine, Inc. (a)		18,530		664
Intellia Therapeutics, Inc. (a)		24,580		672
Intrexon Corp. (a)(b)		40,666		567
				4,423
Construction Materials (3.0%)
Martin Marietta Materials, Inc.		20,171		4,505
Vulcan Materials Co.		35,578		4,592
				9,097
Health Care Equipment & Supplies (5.2%)
DexCom, Inc. (a)		83,309		7,913
Intuitive Surgical, Inc. (a)		16,243		7,772
				15,685
Health Care Technology (8.6%)
athenahealth, Inc. (a)		67,158		10,687
Veeva Systems, Inc., Class A (a)		200,153		15,384
				26,071
Hotels, Restaurants & Leisure (4.3%)
Starbucks Corp.		265,480		12,969
Internet & Direct Marketing Retail (11.6%)
Amazon.com, Inc. (a)		16,638		28,281
Booking Holdings, Inc. (a)		3,451		6,996
				35,277
Internet Software & Services (22.9%)
Alibaba Group Holding Ltd. ADR (China) (a)		14,457		2,682
Alphabet, Inc., Class C (a)		13,262		14,795
Dropbox, Inc., Class A (a)		16,934		549
Facebook, Inc., Class A (a)		74,825		14,540
MercadoLibre, Inc.		14,729		4,403
Spotify Technology SA (a)		27,828		4,682
Tencent Holdings Ltd. (China) (c)		72,800		3,654
Twitter, Inc. (a)		441,053		19,261
Zillow Group, Inc., Class C (a)		83,998		4,961
				69,527
Life Sciences Tools & Services (5.0%)
Illumina, Inc. (a)		54,361		15,182
Pharmaceuticals (0.1%)
Nektar Therapeutics (a)		6,399		312
Road & Rail (4.9%)
Union Pacific Corp.		104,024		14,738
Semiconductors & Semiconductor Equipment (0.8%)
NVIDIA Corp.		10,573		2,505
Software (22.0%)
Activision Blizzard, Inc.		195,343		14,909
Adobe Systems, Inc. (a)		17,798		4,339
Autodesk, Inc. (a)		34,171		4,479
Intuit, Inc.		22,486		4,594

	Shares		Value (000)
salesforce.com, Inc. (a)		112,565	$	15,354
ServiceNow, Inc. (a)		56,987		9,829
Snap, Inc., Class A (a)(b)		227,153		2,973
Workday, Inc., Class A (a)		82,802		10,029
				66,506
Textiles, Apparel & Luxury Goods (4.5%)
LVMH Moet Hennessy Louis Vuitton SE (France)		40,863		13,610
Total Common Stocks (Cost $185,157)				285,902
Preferred Stocks (2.4%)
Electronic Equipment, Instruments & Components (0.4%)
Magic Leap Series C (a)(d)(e)(f) (acquisition cost — $1,089; acquired 12/22/15)		47,281		1,277
Internet & Direct Marketing Retail (2.0%)
Airbnb, Inc. Series D (a)(d)(e)(f) (acquisition cost — $1,335; acquired 4/16/14)		32,784		3,390
Uber Technologies Series G (a)(d)(e)(f) (acquisition cost — $3,117; acquired 12/3/15)		63,916		2,504
				5,894
Total Preferred Stocks (Cost $5,541)				7,171
Short-Term Investments (4.2%)
Securities held as Collateral on Loaned Securities (1.0%)
Investment Company (0.8%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note H)		2,650,307		2,650
	Face Amount (000)
Repurchase Agreements (0.2%)
Barclays Capital, Inc., (2.10%, dated 6/29/18, due 7/2/18; proceeds $152; fully collateralized by U.S. Government obligations; 1.00% – 1.88% due 3/31/22 – 2/15/46; valued at $155)	$	152		152
HSBC Securities USA, Inc., (2.10%, dated 6/29/18, due 7/2/18; proceeds $223; fully collateralized by U.S. Government obligations; 0.00% due 5/15/19 – 2/15/23; valued at $227)		223		223
Merrill Lynch & Co., Inc., (2.12%, dated 6/29/18, due 7/2/18; proceeds $202; fully collateralized by U.S. Government agency securities; 3.00% – 4.00% due 8/1/32 – 12/1/44; valued at $206)		202		202
				577
Total Securities held as Collateral on Loaned Securities (Cost $3,227)				3,227

The accompanying notes are an integral part of the financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Growth Portfolio

	Shares		Value (000)
Investment Company (3.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note H) (Cost $9,793)		9,793,295	$	9,793
Total Short-Term Investments (Cost $13,020)				13,020
Total Investments Excluding Purchased Options (101.0%) (Cost $203,718)				306,093
Total Purchased Options Outstanding (0.1%) (Cost $758)				265
Total Investments (101.1%) (Cost $204,476) Including $3,540 of Securities Loaned (g)				306,358
Liabilities in Excess of Other Assets (-1.1%)				(3,414	)
Net Assets (100.0%)			$	302,944

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2018.

(c)  Security trades on the Hong Kong exchange.

(d)  Security has been deemed illiquid at June 30, 2018.

(e)  Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Fund has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at June 30, 2018 amounts to approximately $7,171,000 and represents 2.4% of net assets.

(f)  At June 30, 2018, the Fund held fair valued securities valued at approximately $7,171,000, representing 2.4% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's Directors.

(g)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $109,129,000 and the aggregate gross unrealized depreciation is approximately $7,247,000, resulting in net unrealized appreciation of approximately $101,882,000.

ADR  American Depositary Receipt.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2018:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland	USD/CNH	CNH	7.16	Jan-19		62,835,154		62,835	$	223	$	273	$	(50	)
Royal Bank of Scotland	USD/CNH	CNH	7.52	Nov-18		60,938,678		60,939		40		252		(212	)
Royal Bank of Scotland	USD/CNH	CNH	7.55	Aug-18		43,894,205		43,894		2		233		(231	)
									$	265	$	758	$	(493	)

CNH  — Chinese Yuan Renminbi Offshore

USD  — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Internet Software & Services		22.9	%
Other**		22.7
Software		22.0
Internet & Direct Marketing Retail		13.6
Health Care Technology		8.6
Health Care Equipment & Supplies		5.2
Life Sciences Tools & Services		5.0
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2018.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Growth Portfolio

Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $192,033)	$	293,915
Investment in Security of Affiliated Issuer, at Value (Cost $12,443)		12,443
Total Investments in Securities, at Value (Cost $204,476)		306,358
Foreign Currency, at Value (Cost $1)		1
Cash		6
Receivable for Investments Sold		563
Receivable for Fund Shares Sold		133
Tax Reclaim Receivable		29
Receivable from Securities Lending Income		11
Receivable from Affiliate		10
Other Assets		26
Total Assets		307,137
Liabilities:
Collateral on Securities Loaned, at Value		3,233
Payable for Advisory Fees		360
Due to Broker		260
Payable for Fund Shares Redeemed		131
Payable for Servicing Fees		87
Payable for Professional Fees		43
Payable for Distribution Fees — Class II Shares		32
Payable for Administration Fees		20
Payable for Directors' Fees and Expenses		4
Payable for Transfer Agency Fees		4
Payable for Custodian Fees		—	@
Other Liabilities		19
Total Liabilities		4,193
NET ASSETS	$	302,944
Net Assets Consist of:
Paid-in-Capital	$	120,200
Accumulated Net Investment Loss		(605	)
Accumulated Undistributed Net Realized Gain		81,468
Unrealized Appreciation (Depreciation) on:
Investments		101,882
Foreign Currency Translation		(1	)
Net Assets	$	302,944
CLASS I:
Net Assets	$	148,482
Net Asset Value, Offering and Redemption Price Per Share Applicable to 3,844,096 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	38.63
CLASS II:
Net Assets	$	154,462
Net Asset Value, Offering and Redemption Price Per Share Applicable to 4,196,367 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	36.81
(1) Including:
Securities on Loan, at Value:	$	3,540

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Growth Portfolio

Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $22 of Foreign Taxes Withheld)	$	589
Dividends from Security of Affiliated Issuer (Note H)		51
Income from Securities Loaned — Net		27
Total Investment Income		667
Expenses:
Advisory Fees (Note B)		707
Distribution Fees — Class II Shares (Note E)		175
Servicing Fees (Note D)		167
Administration Fees (Note C)		113
Professional Fees		58
Shareholder Reporting Fees		9
Custodian Fees (Note G)		8
Transfer Agency Fees (Note F)		6
Directors' Fees and Expenses		5
Pricing Fees		1
Other Expenses		13
Total Expenses		1,262
Rebate from Morgan Stanley Affiliate (Note H)		(7	)
Net Expenses		1,255
Net Investment Loss		(588	)
Realized Gain (Loss):
Investments Sold		25,935
Foreign Currency Translation		(1	)
Net Realized Gain		25,934
Change in Unrealized Appreciation (Depreciation):
Investments		23,582
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		23,581
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		49,515
Net Increase in Net Assets Resulting from Operations	$	48,927

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Growth Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(588	)	$	(1,234	)
Net Realized Gain		25,934			57,363
Net Change in Unrealized Appreciation (Depreciation)		23,581			21,307
Net Increase in Net Assets Resulting from Operations		48,927			77,436
Distributions from and/or in Excess of:
Class I:
Net Realized Gain		—			(10,278	)
Class II:
Net Realized Gain		—			(8,655	)
Total Distributions		—			(18,933	)
Capital Share Transactions:(1)
Class I:
Subscribed		2,944			4,869
Distributions Reinvested		—			10,278
Redeemed		(13,213	)		(18,643	)
Class II:
Subscribed		35,432			35,650
Distributions Reinvested		—			8,655
Redeemed		(29,159	)		(25,884	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(3,996	)		14,925
Total Increase in Net Assets		44,931			73,428
Net Assets:
Beginning of Period		258,013			184,585
End of Period (Including Accumulated Net Investment Loss of $(605) and $(17))	$	302,944		$	258,013
(1) Capital Share Transactions:
Class I:
Shares Subscribed		81			161
Shares Issued on Distributions Reinvested		—			358
Shares Redeemed		(368	)		(629	)
Net Decrease in Class I Shares Outstanding		(287	)		(110	)
Class II:
Shares Subscribed		1,015			1,235
Shares Issued on Distributions Reinvested		—			316
Shares Redeemed		(841	)		(912	)
Net Increase in Class II Shares Outstanding		174			639

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Growth Portfolio

	Class I
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	32.38		$	24.65		$	29.93		$	30.73		$	31.03		$	21.94
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.05	)		(0.13	)		(0.03	)		(0.11	)		(0.06	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		6.30			10.44			(0.57	)		3.76			1.98			10.23
Total from Investment Operations		6.25			10.31			(0.60	)		3.65			1.92			10.20
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.12	)
Net Realized Gain		—			(2.58	)		(4.68	)		(4.45	)		(2.22	)		(0.99	)
Total Distributions		—			(2.58	)		(4.68	)		(4.45	)		(2.22	)		(1.11	)
Net Asset Value, End of Period	$	38.63		$	32.38		$	24.65		$	29.93		$	30.73		$	31.03
Total Return(3)		19.30	%(7)		43.15	%		(1.64	)%		12.24	%		6.36	%		48.07	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	148,482		$	133,745		$	104,504		$	119,883		$	122,881		$	142,052
Ratio of Expenses to Average Net Assets(9)		0.76	%(4)(8)		0.79	%(4)		0.76	%(4)		0.80	%(4)		0.77	%(4)		0.82	%(4)(5)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.80	%(4)		N/A
Ratio of Net Investment Loss to Average Net Assets(9)		(0.29	)%(4)(8)		(0.43	)%(4)		(0.11	)%(4)		(0.37	)%(4)		(0.19	)%(4)		(0.11	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(8)		0.01	%		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		27	%(7)		54	%		39	%		33	%		30	%		32	%
(9) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			0.81	%		0.79	%		0.81	%		0.85	%		0.90	%
Net Investment Loss to Average Net Assets		N/A			(0.45	)%		(0.14	)%		(0.38	)%		(0.27	)%		(0.19	)%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses to Average Net Assets would have been 0.03% higher and the Ratio of Net Investment Loss to Average Net Assets would have been 0.03% lower had the Custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Effective September 9, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.80% for Class I shares. Prior to September 9, 2013, the maximum ratio was 0.85% for Class I shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Growth Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	30.89		$	23.66		$	29.00		$	29.97		$	30.39		$	21.50
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.09	)		(0.19	)		(0.09	)		(0.18	)		(0.13	)		(0.09	)
Net Realized and Unrealized Gain (Loss)		6.01			10.00			(0.57	)		3.66			1.93			10.02
Total from Investment Operations		5.92			9.81			(0.66	)		3.48			1.80			9.93
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.05	)
Net Realized Gain		—			(2.58	)		(4.68	)		(4.45	)		(2.22	)		(0.99	)
Total Distributions		—			(2.58	)		(4.68	)		(4.45	)		(2.22	)		(1.04	)
Net Asset Value, End of Period	$	36.81		$	30.89		$	23.66		$	29.00		$	29.97		$	30.39
Total Return(3)		19.16	%(7)		42.82	%		(1.92	)%		11.97	%		6.09	%		47.72	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	154,462		$	124,268		$	80,081		$	89,398		$	80,103		$	78,501
Ratio of Expenses to Average Net Assets(9)		1.01	%(4)(8)		1.04	%(4)		1.01	%(4)		1.05	%(4)		1.02	%(4)		1.07	%(4)(5)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.05	%(4)		N/A
Ratio of Net Investment Loss to Average Net Assets(9)		(0.54	)%(4)(8)		(0.68	)%(4)		(0.36	)%(4)		(0.62	)%(4)		(0.44	)%(4)		(0.36	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(8)		0.01	%		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		27	%(7)		54	%		39	%		33	%		30	%		32	%
(9) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			1.06	%		1.04	%		1.09	%		1.20	%		1.25	%
Net Investment Loss to Average Net Assets		N/A			(0.70	)%		(0.39	)%		(0.66	)%		(0.62	)%		(0.54	)%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets would have been 0.03% higher and the Ratio of Net Investment Loss to Average Net Assets would have been 0.03% lower had the Custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Effective September 9, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.05% for Class II shares. Prior to September 9, 2013, the maximum ratio was 1.10% for Class II shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Growth Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of large capitalization companies. The Fund offers two classes of shares — Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing

price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (5) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good

10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional

back-testing or disposition analysis and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Biotechnology	$	4,423	$	—	$	—	$	4,423
Construction Materials		9,097		—		—		9,097
Health Care Equipment & Supplies		15,685		—		—		15,685
Health Care Technology		26,071		—		—		26,071
Hotels, Restaurants & Leisure		12,969		—		—		12,969
Internet & Direct Marketing Retail		35,277		—		—		35,277
Internet Software & Services		69,527		—		—		69,527
Life Sciences Tools & Services		15,182		—		—		15,182
Pharmaceuticals		312		—		—		312
Road & Rail		14,738		—		—		14,738
Semiconductors & Semiconductor Equipment		2,505		—		—		2,505
Software		66,506		—		—		66,506
Textiles, Apparel & Luxury Goods		13,610		—		—		13,610
Total Common Stocks		285,902		—		—		285,902
Preferred Stocks
Electronic Equipment, Instruments & Components		—		—		1,277		1,277
Internet & Direct Marketing Retail		—		—		5,894		5,894
Total Preferred Stocks		—		—		7,171		7,171
Call Options Purchased		—		265		—		265
Short-Term Investments
Investment Company		12,443		—		—		12,443
Repurchase Agreements		—		577		—		577
Total Short-Term Investments		12,443		577		—		13,020
Total Assets	$	298,345	$	842	$	7,171	$	306,358

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, securities with a total value of approximately $17,264,000 transferred from Level 2 to Level 1. Securities that were valued using other significant observable inputs at December 31, 2017 were valued using unadjusted quoted prices at June 30, 2018. At December 31, 2017, the fair value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Preferred Stocks (000)
Beginning Balance	$	7,224
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		(485	)
Change in unrealized appreciation (depreciation)		432
Realized gains (losses)		—
Ending Balance	$	7,171
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2018	$	174

12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2018. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance:

	Fair Value at June 30, 2018 (000)		Valuation Technique	Unobservable Input	Range						Selected Value			Impact to Valuation from an Increase in Input
Electronic Equipment, Instuments & Components
Preferred Stock	$	1,277	Market Transaction Method	Precedent Transaction	$	27.00		$	27.00		$	27.00		Increase
Internet & Direct Marketing Retail
Preferred Stocks	$	3,390	Discounted Cash Flow	Weighted Average Cost of Capital		14.5	%		16.5	%		15.5	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		6.3	x		10.3	x		8.7	x	Increase
				Discount for Lack of Marketability		20.0	%		20.0	%		20.0	%	Decrease
	$	2,504	Market Transaction Method	Pending Transaction	$	40.00		$	40.00		$	40.00		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		16.0	%		18.0	%		17.0	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		1.5	x		7.5	x		4.3	x	Increase
				Discount for Lack of Marketability		20.0	%		20.0	%		20.0	%	Decrease

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies,

may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities

13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to

earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase

14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2018:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	265	(a)

(a)  Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following table sets forth by primary risk exposure the Fund's change in unrealized appreciation (depreciation) by

type of derivative contract for the six months ended June 30, 2018 in accordance with ASC 815:

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(82	)(b)

(b)  Amounts are included in Investments in the Statement of Operations.

At June 30, 2018, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(c) (000)			Liabilities(c) (000)
Purchased Options	$	265	(a)	$	—

(a)  Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(c)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a

15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	265	(a)	$	—	$	(260	)	$	5

(a)  Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the six months ended June 30, 2018, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	167,668,000

6.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	3,540	(d)	$	—	$	(3,540	)(e)(f)	$	0

(d)  Represents market value of loaned securities at period end.

(e)  The Fund received cash collateral of approximately $3,233,000, of which approximately $3,227,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2018, there was uninvested cash of approximately $6,000, which is not reflected in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $449,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(f)  The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2018:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	3,233	$	—	$	—	$	—	$	3,233
Total Borrowings	$	3,233	$	—	$	—	$	—	$	3,233
Gross amount of recognized liabilities for securities lending transactions									$	3,233

16

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

7.  Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

8.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

9.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

10.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Next $1 billion			Next $1 billion			Over $3 billion
	0.50	%		0.45	%		0.40	%		0.35	%

For the six months ended June 30, 2018, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.50% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.80% for Class I shares and 1.05% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect for the six months ended June 30, 2018.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares.

17

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $74,530,000 and $76,340,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2018.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by approximately $7,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	15,931	$	61,896	$	65,384	$	51

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	12,443

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an

affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as

18

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	18,933	$	—	$	31,936

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Net Investment Loss (000)		Accumulated Undistributed Net Realized Gain (000)			Paid-in- Capital (000)
$	1,229	$	(1,254	)	$	25

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	4,769	$	51,225

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 56.0%.

19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee was lower than its peer group average and the Fund's total expense ratio was higher than but close to its peer group average. After discussion, the Board concluded that the Fund's (i) performance was competitive with its peer group average and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser

20

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited) (cont'd)

and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

21

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
30 Rockefeller Plaza
New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFCGSAN
2190852 EXP. 08.31.19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Mid Cap Growth Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Expense Example		2
Portfolio of Investments		3
Statement of Assets and Liabilities		6
Statement of Operations		7
Statements of Changes in Net Assets		8
Financial Highlights		9
Notes to Financial Statements		11
Investment Advisory Agreement Approval		20
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Expense Example (unaudited)

Mid Cap Growth Portfolio

As a shareholder of the Mid Cap Growth Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which may include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Mid Cap Growth Portfolio Class I	$	1,000.00	$	1,216.50	$	1,020.13	$	5.17	$	4.71		0.94	%
Mid Cap Growth Portfolio Class II		1,000.00		1,216.00		1,019.64		5.71		5.21		1.04

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments

Mid Cap Growth Portfolio

	Shares		Value (000)
Common Stocks (93.7%)
Aerospace & Defense (1.4%)
HEICO Corp., Class A		33,238	$	2,026
Biotechnology (1.5%)
Alnylam Pharmaceuticals, Inc. (a)		9,679		953
Bluebird Bio, Inc. (a)		1,420		223
Editas Medicine, Inc. (a)		8,539		306
Intellia Therapeutics, Inc. (a)		11,530		316
Intrexon Corp. (a)(b)		18,238		254
				2,052
Commercial Services & Supplies (3.0%)
Copart, Inc. (a)		36,802		2,081
Rollins, Inc.		40,163		2,112
				4,193
Construction Materials (3.0%)
Martin Marietta Materials, Inc.		9,352		2,088
Vulcan Materials Co.		15,689		2,025
				4,113
Health Care Equipment & Supplies (5.6%)
DexCom, Inc. (a)		54,151		5,143
Penumbra, Inc. (a)		18,692		2,583
				7,726
Health Care Providers & Services (5.0%)
HealthEquity, Inc. (a)		93,149		6,995
Health Care Technology (11.9%)
athenahealth, Inc. (a)		53,375		8,494
Veeva Systems, Inc., Class A (a)		104,203		8,009
				16,503
Hotels, Restaurants & Leisure (5.1%)
Shake Shack, Inc., Class A (a)		78,135		5,171
Whitbread PLC (United Kingdom)		36,744		1,920
				7,091
Information Technology Services (1.4%)
Broadridge Financial Solutions, Inc.		16,461		1,895
Internet & Direct Marketing Retail (3.9%)
Overstock.com, Inc. (a)		51,742		1,741
TripAdvisor, Inc. (a)		30,608		1,705
Wayfair, Inc., Class A (a)		16,798		1,995
				5,441
Internet Software & Services (24.2%)
Angi Homeservices, Inc., Class A (a)(b)		304,485		4,683
Coupa Software, Inc. (a)		67,636		4,210
GrubHub, Inc. (a)		18,781		1,970
Match Group, Inc. (a)(b)		51,321		1,988
MercadoLibre, Inc.		6,745		2,016
Shopify, Inc., Class A (Canada) (a)		13,656		1,992
Twitter, Inc. (a)		231,318		10,102
Zillow Group, Inc., Class C (a)		112,537		6,647
				33,608

	Shares		Value (000)
Life Sciences Tools & Services (4.9%)
Illumina, Inc. (a)		24,398	$	6,814
Pharmaceuticals (0.1%)
Nektar Therapeutics (a)		2,892		141
Software (21.7%)
ANSYS, Inc. (a)		11,343		1,976
Atlassian Corp., PLC, Class A (United Kingdom) (a)		22,008		1,376
Constellation Software, Inc. (Canada)		2,792		2,165
Guidewire Software, Inc. (a)		21,162		1,879
ServiceNow, Inc. (a)		25,581		4,412
Snap, Inc., Class A (a)(b)		110,565		1,447
Splunk, Inc. (a)		11,178		1,108
SS&C Technologies Holdings, Inc.		41,013		2,129
Take-Two Interactive Software, Inc. (a)		59,437		7,035
Tyler Technologies, Inc. (a)		8,701		1,932
Workday, Inc., Class A (a)		37,960		4,598
				30,057
Trading Companies & Distributors (1.0%)
Watsco, Inc.		7,508		1,338
Total Common Stocks (Cost $94,423)				129,993
Preferred Stocks (2.9%)
Internet & Direct Marketing Retail (2.5%)
Airbnb, Inc. Series D (a)(c)(d)(e) (acquisition cost — $1,370; acquired 4/16/14)		33,636		3,478
Software (0.4%)
Palantir Technologies, Inc. Series G (a)(c)(d)(e) (acquisition cost — $455; acquired 7/19/12)		148,616		369
Palantir Technologies, Inc. Series H (a)(c)(d)(e) (acquisition cost — $102; acquired 10/25/13)		29,092		73
Palantir Technologies, Inc. Series H1 (a)(c)(d)(e) (acquisition cost — $102; acquired 10/25/13)		29,092		73
				515
Total Preferred Stocks (Cost $2,029)				3,993
Short-Term Investments (9.1%)
Securities held as Collateral on Loaned Securities (5.5%)
Investment Company (4.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note H)		6,330,288		6,330
	Face Amount (000)
Repurchase Agreements (1.0%)
Barclays Capital, Inc., (2.10%, dated 6/29/18, due 7/2/18; proceeds $362; fully collateralized by U.S. Government obligations; 1.00% – 1.88% due 3/31/22 – 2/15/46; valued at $370)	$	362		362

The accompanying notes are an integral part of the financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Mid Cap Growth Portfolio

	Face Amount (000)		Value (000)
Repurchase Agreements (cont'd)
HSBC Securities USA, Inc., (2.10%, dated 6/29/18, due 7/2/18; proceeds $532; fully collateralized by U.S. Government obligations; 0.00% due 5/15/19 – 2/15/23; valued at $542)	$	532	$	532
Merrill Lynch & Co., Inc., (2.12%, dated 6/29/18, due 7/2/18; proceeds $483; fully collateralized by U.S. Government agency securities; 3.00% – 4.00% due 8/1/32 – 12/1/44; valued at $493)		483		483
				1,377
Total Securities held as Collateral on Loaned Securities (Cost $7,707)				7,707
	Shares
Investment Company (3.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note H) (Cost $4,958)		4,957,634		4,958
Total Short-Term Investments (Cost $12,665)				12,665
Total Investments Excluding Purchased Options (105.7%) (Cost $109,117)				146,651
Total Purchased Options Outstanding (0.1%) (Cost $355)				121
Total Investments (105.8%) (Cost $109,472) Including $7,789 of Securities Loaned (f)				146,772
Liabilities in Excess of Other Assets (-5.8%)				(8,083	)
Net Assets (100.0%)			$	138,689

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2018.

(c)  Security has been deemed illiquid at June 30, 2018.

(d)  Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Fund has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at June 30, 2018 amounts to approximately $3,993,000 and represents 2.9% of net assets.

(e)  At June 30, 2018, the Fund held fair valued securities valued at approximately $3,993,000, representing 2.9% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's Directors.

(f)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $40,182,000 and the aggregate gross unrealized depreciation is approximately $2,882,000, resulting in net unrealized appreciation of approximately $37,300,000.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

Mid Cap Growth Portfolio

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2018:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland	USD/CNH	CNH	7.16	Jan-19		28,594,933		28,595	$	102	$	124	$	(22	)
Royal Bank of Scotland	USD/CNH	CNH	7.52	Nov-18		28,104,157		28,104		18		117		(99	)
Royal Bank of Scotland	USD/CNH	CNH	7.55	Aug-18		21,548,465		21,548		1		114		(113	)
									$	121	$	355	$	(234	)

CNH — Chinese Yuan Renminbi Offshore

USD — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Internet Software & Services		24.2	%
Software		22.0
Other**		19.8
Health Care Technology		11.9
Internet & Direct Marketing Retail		6.4
Health Care Equipment & Supplies		5.6
Hotels, Restaurants & Leisure		5.1
Health Care Providers & Services		5.0
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2018.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Mid Cap Growth Portfolio

Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $98,184)	$	135,484
Investment in Security of Affiliated Issuer, at Value (Cost $11,288)		11,288
Total Investments in Securities, at Value (Cost $109,472)		146,772
Foreign Currency, at Value (Cost —@)		—	@
Cash		15
Receivable for Fund Shares Sold		22
Receivable from Securities Lending Income		14
Dividends Receivable		8
Receivable from Affiliate		7
Other Assets		21
Total Assets		146,859
Liabilities:
Collateral on Securities Loaned, at Value		7,722
Payable for Advisory Fees		182
Payable for Fund Shares Redeemed		145
Payable for Professional Fees		50
Payable for Servicing Fees		36
Payable for Administration Fees		9
Payable for Distribution Fees — Class II Shares		9
Payable for Transfer Agency Fees		3
Payable for Directors' Fees and Expenses		1
Payable for Custodian Fees		—	@
Other Liabilities		13
Total Liabilities		8,170
NET ASSETS	$	138,689
Net Assets Consist of:
Paid-in-Capital	$	63,906
Accumulated Net Investment Loss		(472	)
Accumulated Undistributed Net Realized Gain		37,955
Unrealized Appreciation (Depreciation) on:
Investments		37,300
Foreign Currency Translation		—	@
Net Assets	$	138,689
CLASS I:
Net Assets	$	32,412
Net Asset Value, Offering and Redemption Price Per Share Applicable to 2,201,295 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	14.72
CLASS II:
Net Assets	$	106,277
Net Asset Value, Offering and Redemption Price Per Share Applicable to 7,375,359 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	14.41
(1) Including:
Securities on Loan, at Value:	$	7,789

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Mid Cap Growth Portfolio

Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Income from Securities Loaned — Net	$	108
Dividends from Securities of Unaffiliated Issuers (Net of $1 of Foreign Taxes Withheld)		58
Dividends from Security of Affiliated Issuer (Note H)		26
Total Investment Income		192
Expenses:
Advisory Fees (Note B)		479
Distribution Fees — Class II Shares (Note E)		122
Servicing Fees (Note D)		95
Professional Fees		65
Administration Fees (Note C)		51
Shareholder Reporting Fees		13
Custodian Fees (Note G)		7
Transfer Agency Fees (Note F)		5
Directors' Fees and Expenses		3
Pricing Fees		2
Other Expenses		10
Total Expenses		852
Waiver of Advisory Fees (Note B)		(124	)
Waiver of Distribution Fees — Class II Shares (Note E)		(73	)
Rebate from Morgan Stanley Affiliate (Note H)		(3	)
Net Expenses		652
Net Investment Loss		(460	)
Realized Gain (Loss):
Investments Sold		10,020
Foreign Currency Translation		(1	)
Net Realized Gain		10,019
Change in Unrealized Appreciation (Depreciation):
Investments		15,501
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		15,501
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		25,520
Net Increase in Net Assets Resulting from Operations	$	25,060

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Mid Cap Growth Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(460	)	$	(600	)
Net Realized Gain		10,019			31,612
Net Change in Unrealized Appreciation (Depreciation)		15,501			5,327
Net Increase in Net Assets Resulting from Operations		25,060			36,339
Capital Share Transactions:(1)
Class I:
Subscribed		2,861			4,420
Redeemed		(5,149	)		(12,610	)
Class II:
Subscribed		8,790			7,648
Redeemed		(10,760	)		(20,966	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(4,258	)		(21,508	)
Total Increase in Net Assets		20,802			14,831
Net Assets:
Beginning of Period		117,887			103,056
End of Period (Including Accumulated Net Investment Loss of $(472) and $(12))	$	138,689		$	117,887
(1) Capital Share Transactions:
Class I:
Shares Subscribed		211			418
Shares Redeemed		(386	)		(1,239	)
Net Decrease in Class I Shares Outstanding		(175	)		(821	)
Class II:
Shares Subscribed		663			746
Shares Redeemed		(813	)		(2,011	)
Net Decrease in Class II Shares Outstanding		(150	)		(1,265	)

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Mid Cap Growth Portfolio

	Class I
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	12.10		$	8.72		$	10.03		$	12.73		$	14.41		$	10.77
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.04	)		(0.05	)		(0.00	)(3)		(0.08	)		(0.02	)		(0.05	)
Net Realized and Unrealized Gain (Loss)		2.66			3.43			(0.87	)		(0.50	)		0.28			4.03
Total from Investment Operations		2.62			3.38			(0.87	)		(0.58	)		0.26			3.98
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.05	)
Net Realized Gain		—			—			(0.44	)		(2.12	)		(1.94	)		(0.29	)
Total Distributions		—			—			(0.44	)		(2.12	)		(1.94	)		(0.34	)
Net Asset Value, End of Period	$	14.72		$	12.10		$	8.72		$	10.03		$	12.73		$	14.41
Total Return(4)		21.65	%(8)		38.76	%		(8.78	)%		(5.90	)%		1.97	%		37.49	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	32,412		$	28,747		$	27,893		$	48,467		$	66,653		$	72,112
Ratio of Expenses to Average Net Assets(10)		0.94	%(5)(9)		0.99	%(5)(6)		1.04	%(5)		1.05	%(5)		1.05	%(5)		1.05	%(5)
Ratio of Net Investment Loss to Average Net Assets(10)		(0.64	)%(5)(9)		(0.45	)%(5)		(0.00	)%(5)(7)		(0.67	)%(5)		(0.14	)%(5)		(0.39	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(9)		0.00	%(7)		0.01	%		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		42	%(8)		64	%		42	%		25	%		44	%		49	%
(10) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.14	%(9)		1.17	%		1.14	%		1.10	%		1.10	%		1.09	%
Net Investment Loss to Average Net Assets		(0.84	)%(9)		(0.63	)%		(0.10	)%		(0.72	)%		(0.19	)%		(0.43	)%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Loss to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(5)  The Ratios of Expenses and Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(6)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class I shares. Prior to July 1, 2017, the maximum ratio was 1.05% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

Mid Cap Growth Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	11.85		$	8.55		$	9.85		$	12.55		$	14.25		$	10.64
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.05	)		(0.06	)		(0.01	)		(0.09	)		(0.03	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		2.61			3.36			(0.85	)		(0.49	)		0.27			3.99
Total from Investment Operations		2.56			3.30			(0.86	)		(0.58	)		0.24			3.93
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.03	)
Net Realized Gain		—			—			(0.44	)		(2.12	)		(1.94	)		(0.29	)
Total Distributions		—			—			(0.44	)		(2.12	)		(1.94	)		(0.32	)
Net Asset Value, End of Period	$	14.41		$	11.85		$	8.55		$	9.85		$	12.55		$	14.25
Total Return(3)		21.60	%(7)		38.60	%		(8.84	)%		(5.99	)%		1.84	%		37.48	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	106,277		$	89,140		$	75,163		$	98,499		$	129,617		$	151,317
Ratio of Expenses to Average Net Assets(9)		1.04	%(4)(8)		1.09	%(4)(5)		1.14	%(4)		1.15	%(4)		1.15	%(4)		1.15	%(4)
Ratio of Net Investment Loss to Average Net Assets(9)		(0.74	)%(4)(8)		(0.55	)%(4)		(0.10	)%(4)		(0.77	)%(4)		(0.24	)%(4)		(0.49	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%(8)		0.00	%(6)		0.01	%		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		42	%(7)		64	%		42	%		25	%		44	%		49	%
(9) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.39	%(8)		1.42	%		1.39	%		1.39	%		1.45	%		1.44	%
Net Investment Loss to Average Net Assets		(1.09	)%(8)		(0.88	)%		(0.35	)%		(1.01	)%		(0.54	)%		(0.78	)%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Loss to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.05% for Class II shares. Prior to July 1, 2017, the maximum ratio was 1.15% for Class II shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Mid Cap Growth Portfolio. The Fund seeks long-term capital growth by investing primarily in common stocks and other equity securities. The Fund offers two classes of shares — Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is

valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (5) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing

11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

service and/or procedures approved by the Directors; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	2,026	$	—	$	—	$	2,026
Biotechnology		2,052		—		—		2,052
Commercial Services & Supplies		4,193		—		—		4,193
Construction Materials		4,113		—		—		4,113
Health Care Equipment & Supplies		7,726		—		—		7,726
Health Care Providers & Services		6,995		—		—		6,995
Health Care Technology		16,503		—		—		16,503
Hotels, Restaurants & Leisure		7,091		—		—		7,091
Information Technology Services		1,895		—		—		1,895
Internet & Direct Marketing Retail		5,441		—		—		5,441
Internet Software & Services		33,608		—		—		33,608
Life Sciences Tools & Services		6,814		—		—		6,814
Pharmaceuticals		141		—		—		141
Software		30,057		—		—		30,057
Trading Companies & Distributors		1,338		—		—		1,338
Total Common Stocks		129,993		—		—		129,993
Preferred Stocks
Internet & Direct Marketing Retail		—		—		3,478		3,478
Software		—		—		515		515
Total Preferred Stocks		—		—		3,993		3,993
Call Options Purchased		—		121		—		121
Short-Term Investments
Investment Company		11,288		—		—		11,288
Repurchase Agreements		—		1,377		—		1,377
Total Short-Term Investments		11,288		1,377		—		12,665
Total Assets	$	141,281	$	1,498	$	3,993	$	146,772

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, the Fund did not have any investments transfer between investment levels.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Preferred Stocks (000)
Beginning Balance	$	4,271
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(278	)
Realized gains (losses)		—
Ending Balance	$	3,993
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2018	$	(278	)

13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2018. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance:

	Fair Value at June 30, 2018 (000)		Valuation Technique	Unobservable Input	Range					Selected Value			Impact to Valuation from an Increase in Input
Internet & Direct Marketing Retail
Preferred Stock	$	3,478	Discounted Cash Flow	Weighted Average Cost of Capital		14.5	%	16.5	%		15.5	%	Decrease
				Perpetual Growth Rate		3.0	%	4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		6.3	x	10.3	x		8.7	x	Increase
				Discount for Lack of Marketability		20.0	%	20.0	%		20.0	%	Decrease
Software
Preferred Stocks	$	515	Discounted Cash Flow	Weighted Average Cost of Capital		15.5	%	17.5	%		16.5	%	Decrease
				Perpetual Growth Rate		2.5	%	3.5	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		1.5	x	14.5	x		6.9	x	Increase
				Discount for Lack of Marketability		20.0	%	20.0	%		20.0	%	Decrease

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to

earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative

14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and

even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2018:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased  Investments, at Value Options	(Purchased Options)	Currency Risk	$	121	(a)

(a)  Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables sets forth by primary risk exposure the Fund's change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2018 in accordance with ASC 815:

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(38	)(b)

(b)  Amounts are included in Investments in the Statement of Operations.

At June 30, 2018, the Fund's derivative assets and liabilities are as follows:

	Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(c) (000)			Liabilities(c) (000)
Purchased Options	$	121	(a)	$	—

(a)  Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(c)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general

15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	121	(a)	$	—	$	—	$	121

(a)  Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the six months ended June 30, 2018, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	78,248,000

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2018:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	7,789	(d)	$	—	$	(7,789	)(e)(f)	$	0

(d)  Represents market value of loaned securities at period end.

(e)  The Fund received cash collateral of approximately $7,722,000, of which approximately $7,707,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2018, there was uninvested cash of approximately $15,000, which is not reflected in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $233,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(f)  The actual collateral received is greater than the amount shown here due to overcollateralization.

16

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2018:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	7,722	$	—	$	—	$	—	$	7,722
Total Borrowings	$	7,722	$	—	$	—	$	—	$	7,722
Gross amount of recognized liabilities for securities lending transactions									$	7,722

6.  Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

7.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

9.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2018, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.55% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.95% for Class I shares and 1.05% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2018, approximately $124,000 of advisory fees were waived pursuant to this arrangement.

17

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.15% of the 0.25% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action is appropriate. For the six months ended June 30, 2018, this waiver amounted to approximately $73,000.

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018,

purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $52,173,000 and $59,699,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2018.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by approximately $3,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	6,537	$	42,941	$	38,190	$	26

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	11,288

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund engaged in cross-trade purchases of approximately $453,000.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation

18

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	—	$	—	$	5,555

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, return of capital distributions from real estate investment trusts and a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Net Investment (Loss) (000)		Accumulated Undistributed Net Realized Gain (000)			Paid-in- Capital (000)
$	597	$	(631	)	$	34

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	1,341	$	27,131

During the year ended December 31, 2017, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $605,000.

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 48.4%.

19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the three- and five-year periods but better than its peer group average for the one-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's management fee and total expense ratio were higher than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser

20

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited) (cont'd)

and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

21

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
30 Rockefeller Plaza
New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFMCGSAN
2190859 EXP. 08.31.19

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

U.S. Real Estate Portfolio

The Fund is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Table of Contents

Expense Example		2
Portfolio of Investments		3
Statement of Assets and Liabilities		5
Statement of Operations		6
Statements of Changes in Net Assets		7
Financial Highlights		8
Notes to Financial Statements		10
Investment Advisory Agreement Approval		16
Director and Officer Information	Back Cover

1

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Expense Example (unaudited)

U.S. Real Estate Portfolio

As a shareholder of the U.S. Real Estate Portfolio (the "Fund"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, which may include advisory fees, administration fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2018 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/18		Actual Ending Account Value 6/30/18		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
U.S. Real Estate Portfolio Class I	$	1,000.00	$	1,003.70	$	1,020.33	$	4.47	$	4.51		0.90	%
U.S. Real Estate Portfolio Class II		1,000.00		1,002.30		1,019.09		5.71		5.76		1.15

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments

U.S. Real Estate Portfolio

	Shares		Value (000)
Common Stocks (98.7%)
Apartments (14.1%)
American Campus Communities, Inc. REIT		74,052	$	3,175
Apartment Investment & Management Co., Class A REIT		115,758		4,897
AvalonBay Communities, Inc. REIT		92,258		15,858
Camden Property Trust REIT		107,235		9,772
Education Realty Trust, Inc. REIT		25,919		1,076
Equity Residential REIT		245,597		15,642
Essex Property Trust, Inc. REIT		28,472		6,807
Mid-America Apartment Communities, Inc. REIT		75,440		7,595
UDR, Inc. REIT		95,936		3,601
				68,423
Commercial Financing (0.9%)
Blackstone Mortgage Trust, Inc., Class A REIT		74,160		2,331
Ladder Capital Corp. REIT		133,910		2,091
				4,422
Data Centers (2.4%)
Digital Realty Trust, Inc. REIT		39,770		4,437
QTS Realty Trust, Inc., Class A REIT		185,740		7,337
				11,774
Diversified (5.7%)
Forest City Realty Trust, Inc., Class A REIT		109,876		2,506
JBG SMITH Properties REIT		90,418		3,298
Vornado Realty Trust REIT		294,145		21,743
				27,547
Health Care (7.8%)
HCP, Inc. REIT		457,406		11,810
Healthcare Realty Trust, Inc. REIT		352,618		10,254
Healthcare Trust of America, Inc., Class A REIT		140,972		3,801
Ventas, Inc. REIT		86,879		4,948
Welltower, Inc. REIT		107,495		6,739
				37,552
Industrial (7.3%)
DCT Industrial Trust, Inc. REIT		181,678		12,123
Duke Realty Corp. REIT		79,219		2,300
Liberty Property Trust REIT		93,452		4,143
ProLogis, Inc. REIT		199,528		13,107
Rexford Industrial Realty, Inc. REIT		117,522		3,689
				35,362
Lodging/Resorts (5.1%)
Chesapeake Lodging Trust REIT		172,509		5,458
Hilton Worldwide Holdings, Inc.		5,325		422
Host Hotels & Resorts, Inc. REIT		722,740		15,228
RLJ Lodging Trust REIT		162,574		3,585
				24,693
Office (23.1%)
Alexandria Real Estate Equities, Inc. REIT		28,083		3,543
Boston Properties, Inc. REIT		230,764		28,942
Brandywine Realty Trust REIT		231,260		3,904
Columbia Property Trust, Inc. REIT		148,565		3,374

	Shares		Value (000)
Corporate Office Properties Trust REIT		106,515	$	3,088
Cousins Properties, Inc. REIT		322,385		3,124
Douglas Emmett, Inc. REIT		37,739		1,516
Hudson Pacific Properties, Inc. REIT		158,946		5,632
Kilroy Realty Corp. REIT		71,110		5,379
Mack-Cali Realty Corp. REIT		464,500		9,420
Paramount Group, Inc. REIT		776,840		11,963
SL Green Realty Corp. REIT		291,866		29,341
Tier REIT, Inc. REIT		107,144		2,548
				111,774
Regional Malls (17.0%)
GGP, Inc. REIT		913,037		18,653
Macerich Co. (The) REIT		124,916		7,099
Pennsylvania Real Estate Investment Trust REIT		127,353		1,400
Simon Property Group, Inc. REIT		322,802		54,938
				82,090
Self Storage (6.0%)
CubeSmart REIT		231,346		7,454
Extra Space Storage, Inc. REIT		38,460		3,839
Life Storage, Inc. REIT		28,941		2,816
Public Storage REIT		66,396		15,062
				29,171
Shopping Centers (6.4%)
Brixmor Property Group, Inc. REIT		537,410		9,367
DDR Corp. REIT		37,690		675
Federal Realty Investment Trust REIT		17,808		2,254
Kimco Realty Corp. REIT		214,211		3,639
Regency Centers Corp. REIT		245,215		15,223
				31,158
Single Family Homes (2.3%)
American Homes 4 Rent, Class A REIT		422,635		9,374
Invitation Homes, Inc. REIT		69,645		1,606
				10,980
Specialty (0.6%)
Gaming and Leisure Properties, Inc. REIT		80,482		2,881
Total Common Stocks (Cost $356,255)				477,827
Short-Term Investment (0.6%)
Investment Company (0.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note H) (Cost $2,853)		2,852,933		2,853
Total Investments (99.3%) (Cost $359,108) (a)				480,680
Other Assets in Excess of Liabilities (0.7%)				3,389
Net Assets (100.0%)			$	484,069

(a)  At June 30, 2018, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $125,464,000 and the aggregate gross unrealized depreciation is approximately $3,892,000, resulting in net unrealized appreciation of approximately $121,572,000.

REIT  Real Estate Investment Trust.

The accompanying notes are an integral part of the financial statements.
3

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Portfolio of Investments (cont'd)

U.S. Real Estate Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Office		23.3	%
Regional Malls		17.1
Apartments		14.2
Health Care		7.8
Industrial		7.4
Other*		6.8
Shopping Centers		6.5
Self Storage		6.1
Diversified		5.7
Lodging/Resorts		5.1
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

U.S. Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2018 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $356,255)	$	477,827
Investment in Security of Affiliated Issuer, at Value (Cost $2,853)		2,853
Total Investments in Securities, at Value (Cost $359,108)		480,680
Receivable for Investments Sold		3,506
Dividends Receivable		1,788
Receivable for Fund Shares Sold		47
Receivable from Affiliate		6
Other Assets		34
Total Assets		486,061
Liabilities:
Payable for Investments Purchased		729
Payable for Advisory Fees		728
Payable for Fund Shares Redeemed		175
Payable for Servicing Fees		167
Payable for Distribution Fees — Class II Shares		54
Payable for Professional Fees		44
Payable for Administration Fees		31
Payable for Directors' Fees and Expenses		8
Payable for Custodian Fees		7
Payable for Transfer Agency Fees		4
Other Liabilities		45
Total Liabilities		1,992
NET ASSETS	$	484,069
Net Assets Consist of:
Paid-in-Capital	$	354,912
Accumulated Undistributed Net Investment Income		16,986
Accumulated Net Realized Loss		(9,401	)
Unrealized Appreciation (Depreciation) on:
Investments		121,572
Net Assets	$	484,069
CLASS I:
Net Assets	$	219,992
Net Asset Value, Offering and Redemption Price Per Share Applicable to 10,090,613 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	21.80
CLASS II:
Net Assets	$	264,077
Net Asset Value, Offering and Redemption Price Per Share Applicable to 12,203,928 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	21.64

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

U.S. Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2018 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers	$	8,902
Dividends from Security of Affiliated Issuer (Note H)		30
Total Investment Income		8,932
Expenses:
Advisory Fees (Note B)		1,857
Servicing Fees (Note D)		330
Distribution Fees — Class II Shares (Note E)		319
Administration Fees (Note C)		186
Professional Fees		58
Shareholder Reporting Fees		23
Custodian Fees (Note G)		11
Directors' Fees and Expenses		8
Transfer Agency Fees (Note F)		7
Pricing Fees		2
Other Expenses		11
Total Expenses		2,812
Waiver of Advisory Fees (Note B)		(404	)
Rebate from Morgan Stanley Affiliate (Note H)		(4	)
Net Expenses		2,404
Net Investment Income		6,528
Realized Gain (Loss):
Investments Sold		3,954
Foreign Currency Translation		(—	@)
Net Realized Gain		3,954
Change in Unrealized Appreciation (Depreciation):
Investments		(10,462	)
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		(10,462	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(6,508	)
Net Increase in Net Assets Resulting from Operations	$	20

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

U.S. Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2018 (unaudited) (000)			Year Ended December 31, 2017 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	6,528		$	10,411
Net Realized Gain		3,954			43,212
Net Change in Unrealized Appreciation (Depreciation)		(10,462	)		(38,742	)
Net Increase in Net Assets Resulting from Operations		20			14,881
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(3,525	)
Class II:
Net Investment Income		—			(3,676	)
Total Distributions		—			(7,201	)
Capital Share Transactions:(1)
Class I:
Subscribed		10,256			22,972
Distributions Reinvested		—			3,525
Redeemed		(19,020	)		(53,089	)
Class II:
Subscribed		10,190			24,087
Distributions Reinvested		—			3,676
Redeemed		(29,345	)		(46,654	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(27,919	)		(45,483	)
Total Decrease in Net Assets		(27,899	)		(37,803	)
Net Assets:
Beginning of Period		511,968			549,771
End of Period (Including Accumulated Undistributed Net Investment Income of $16,986 and $10,458)	$	484,069		$	511,968
(1) Capital Share Transactions:
Class I:
Shares Subscribed		508			1,086
Shares Issued on Distributions Reinvested		—			169
Shares Redeemed		(936	)		(2,495	)
Net Decrease in Class I Shares Outstanding		(428	)		(1,240	)
Class II:
Shares Subscribed		512			1,145
Shares Issued on Distributions Reinvested		—			177
Shares Redeemed		(1,440	)		(2,219	)
Net Decrease in Class II Shares Outstanding		(928	)		(897	)

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

U.S. Real Estate Portfolio

	Class I
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	21.72		$	21.39		$	20.28		$	20.13		$	15.74		$	15.59
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.30			0.45			0.35			0.30			0.27			0.22
Net Realized and Unrealized Gain (Loss)		(0.22	)		0.20			1.04			0.12			4.38			0.11
Total from Investment Operations		0.08			0.65			1.39			0.42			4.65			0.33
Distributions from and/or in Excess of:
Net Investment Income		—			(0.32	)		(0.28	)		(0.27	)		(0.26	)		(0.18	)
Net Asset Value, End of Period	$	21.80		$	21.72		$	21.39		$	20.28		$	20.13		$	15.74
Total Return(3)		0.37	%(9)		3.11	%		6.81	%		2.17	%		29.72	%		2.05	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	219,992		$	228,487		$	251,517		$	191,188		$	204,740		$	289,874
Ratio of Expenses to Average Net Assets(11)		0.90	%(4)(10)		0.92	%(4)(5)		0.97	%(4)(6)		1.00	%(4)		1.06	%(4)(7)		1.10	%(4)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			1.00	%(4)		1.05	%(4)(7)		1.08	%(4)
Ratio of Net Investment Income to Average Net Assets(11)		2.95	%(4)(10)		2.13	%(4)		1.66	%(4)		2.36	%(4)		1.52	%(4)		1.36	%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%(8)(10)		0.00	%(8)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		22	%(9)		44	%		21	%		26	%		25	%		17	%
(11) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.07	%(10)		1.07	%		1.06	%		1.07	%		1.11	%		N/A
Net Investment Income to Average Net Assets		2.78	%(10)		1.98	%		1.57	%		2.29	%		1.47	%		N/A

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.90% for Class I shares. Prior to July 1, 2017, the maximum ratio was 0.95% for Class I shares.

(6)  Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class I share. Prior to July 1, 2016, the maximum ratio was 1.00% for Class I shares.

(7)  Effective July 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to July 1, 2014, the maximum ratio was 1.10% for Class I shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Financial Highlights

U.S. Real Estate Portfolio

	Class II
	Six Months Ended June 30, 2018			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2017			2016(1)			2015			2014			2013
Net Asset Value, Beginning of Period	$	21.59		$	21.26		$	20.16		$	20.02		$	15.66		$	15.52
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.27			0.40			0.29			0.25			0.23			0.18
Net Realized and Unrealized Gain (Loss)		(0.22	)		0.20			1.04			0.12			4.35			0.10
Total from Investment Operations		0.05			0.60			1.33			0.37			4.58			0.28
Distributions from and/or in Excess of:
Net Investment Income		—			(0.27	)		(0.23	)		(0.23	)		(0.22	)		(0.14	)
Net Asset Value, End of Period	$	21.64		$	21.59		$	21.26		$	20.16		$	20.02		$	15.66
Total Return(3)		0.23	%(9)		2.87	%		6.55	%		1.92	%		29.43	%		1.75	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	264,077		$	283,481		$	298,254		$	281,056		$	279,305		$	185,999
Ratio of Expenses to Average Net Assets(11)		1.15	%(4)(10)		1.17	%(4)(5)		1.22	%(4)(6)		1.25	%(4)		1.31	%(4)(7)		1.35	%(4)
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			1.25	%(4)		1.30	%(4)(7)		1.33	%(4)
Ratio of Net Investment Income to Average Net Assets(11)		2.70	%(4)(10)		1.88	%(4)		1.41	%(4)		2.11	%(4)		1.27	%(4)		1.11	%(4)
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%(8)(10)		0.00	%(8)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		22	%(9)		44	%		21	%		26	%		25	%		17	%
(11) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.32	%(10)		1.32	%		1.31	%		1.35	%		1.46	%		1.45	%
Net Investment Income to Average Net Assets		2.53	%(10)		1.73	%		1.32	%		2.01	%		1.12	%		1.01	%

(1)  Reflects prior period Custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class II shares. The Ratio of Expenses to Average Net Assets and the Ratio of Net Investment Income to Average Net Assets would be unchanged as the reimbursement of Custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

(4)  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.15% for Class II shares. Prior to July 1, 2017, the maximum ratio was 1.20% for Class II shares.

(6)  Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.20% for Class II shares. Prior to July 1, 2016, the maximum ratio was 1.25% for Class II shares.

(7)  Effective July 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class II shares. Prior to July 1, 2014, the maximum ratio was 1.35% for Class II shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements

Morgan Stanley Variable Insurance Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of ten separate active, diversified and non-diversified funds (individually referred to as a "Fund", collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the U.S. Real Estate Portfolio. The Fund seeks to provide above average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts ("REITs"). The Fund offers two classes of shares — Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Company is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the se-

curity on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; and (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

10

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Company has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis and reviews of any related market activity.

The Fund invests a significant portion of its assets in securities of REITs. The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Fund.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

11

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2018:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Apartments	$	68,423	$	—	$	—	$	68,423
Commercial Financing		4,422		—		—		4,422
Data Centers		11,774		—		—		11,774
Diversified		27,547		—		—		27,547
Health Care		37,552		—		—		37,552
Industrial		35,362		—		—		35,362
Lodging/Resorts		24,693		—		—		24,693
Office		111,774		—		—		111,774
Regional Malls		82,090		—		—		82,090
Self Storage		29,171		—		—		29,171
Shopping Centers		31,158		—		—		31,158
Single Family Homes		10,980		—		—		10,980
Specialty		2,881		—		—		2,881
Total Common Stocks		477,827		—		—		477,827
Short-Term Investment
Investment Company		2,853		—		—		2,853
Total Assets	$	480,680	$	—	$	—	$	480,680

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2018, the Fund did not have any investments transfer between investment levels.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)
Beginning Balance	$	651
Purchases		—
Sales		(762	)
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		1,483
Realized gains (losses)		(1,372	)
Ending Balance	$	—
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2018	$	—

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower

12

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

6.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded

on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.80	%		0.75	%		0.70	%

Effective July 1, 2018, the Fund's annual rate based on the daily net assets will be as follows:

First $500 million			Next $500 million			Over $1 billion
	0.70	%		0.65	%		0.60	%

For the six months ended June 30, 2018, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.62% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares and 1.15% for Class II shares. Effective July 1, 2018, the Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses will not exceed 0.82% for Class I shares and 1.07% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2018, approximately $404,000 of advisory fees were waived pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Servicing Fees: The Company accrues daily and pays quarterly a servicing fee of up to 0.17% of the average daily value of shares of the Fund held in an insurance company's

13

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

account. Certain insurance companies have entered into a servicing agreement with the Company to provide administrative and other contract-owner related services on behalf of the Fund.

E. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Fund and provides the Fund's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Fund is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class II shares.

F. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2018, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $103,130,000 and $121,522,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2018.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2018, advisory fees paid were reduced by approximately $4,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2018 is as follows:

Affiliated Investment Company	Value December 31, 2017 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	7,095	$	44,235	$	48,477	$	30

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2018 (000)
Liquidity Funds	$	—	$	—	$	2,853

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

I. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

14

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Notes to Financial Statements (cont'd)

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2017, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2017 and 2016 was as follows:

2017 Distributions Paid From:				2016 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	7,201	$	—	$	6,124	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments in the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to REIT basis adjustments, securities sold with return of capital basis adjustment and an expired capital loss carryforward, resulted in the following reclassifications among the components of net assets at December 31, 2017:

Accumulated Undistributed Net Investment Income (000)			Accumulated Net Realized (Loss) (000)		Paid-in- Capital (000)
$	(835	)	$	59,134	$	(58,299	)

At December 31, 2017, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	9,661	$	—

During the year ended December 31, 2017, capital loss carryforwards of approximately $58,299,000 expired for federal income tax purposes.

In addition, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $42,651,000 during the year ended December 31, 2017.

J. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2018, the Fund did not have any borrowings under the Facility.

K. Other: At June 30, 2018, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 60.4%.

15

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2017, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that while the Fund's contractual management fee and total expense ratio were higher than its peer group averages, the actual management fee was higher than but close to its peer group average. After discussion, the Board concluded that the Fund's (i) performance was acceptable, (ii) management fee was competitive with its peer group average and (iii) total expense ratio was acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser

16

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018

Investment Advisory Agreement Approval (unaudited) (cont'd)

and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

17

Morgan Stanley Variable Insurance Fund, Inc.

Semi-Annual Report – June 30, 2018 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Patricia Maleski

Michael E. Nugent, Chair of the Board

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
30 Rockefeller Plaza
New York, New York 10112

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semi-annual and annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-1520.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Company's Statement of Additional Information contains additional information about the Fund, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFREISAN
2190987 EXP. 08.31.19

Item 2.  Code of Ethics.

Not applicable for semiannual reports.

Item 3.  Audit Committee Financial Expert.

Not applicable for semiannual reports.

Item 4. Principal Accountant Fees and Services

Not applicable for semiannual reports.

Item 5. Audit Committee of Listed Registrants.

Not applicable for semiannual reports.

Item 6.

(a) Refer to Item 1.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable for semiannual reports.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Applicable only to annual reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

Applicable to reports filed by closed-end funds.

Item 10. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 11. Controls and Procedures

(a)  The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b)  There were no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits

(a) Code of Ethics — Not applicable for semiannual reports.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Variable Insurance Fund, Inc.

/s/ John H. Gernon

John H. Gernon

Principal Executive Officer

August 21, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ John H. Gernon

John H. Gernon

Principal Executive Officer

August 21, 2018

/s/ Francis Smith

Francis Smith

Principal Financial Officer

August 21, 2018