Today, after the market closing, we released the Q3 report. It's our pleasure to have you with us for this Q3 results announcement. Welcome you all. Now, on the CPIC side, we have Mr. Zhao Yonggang, CPIC Group President, Mr. Su Gang, CPIC Group VP and CFO, and Mr. Li Jinsong, General Manager of CPIC Life, and Mr. Liu Zengbo, Deputy General Manager of CPIC P&C and also CFO. First of all, Mr. Zhao will give you a presentation on the results of the first three quarters, to be followed by a Q&A. Now, I'll give the floor to Mr. Zhao.
Thank you. Distinguished guest investors, good evening. I'm Zhao Yonggang. I'll give you a brief introduction on our results and performance in the first three quarters. As we all know, since the beginning of the year, with disruption in the macroeconomic environment and capital markets, we have continued to deepen high-quality growth and strengthen asset liability coordination. In the first three quarters, our performance has remained stable. In the first three quarters, our insurance service revenue was CNY 218 billion, up 0.1% year-on-year.
With the steady increase in the amortization of the CSM, and also improvement in the property insurance underwriting profit, our operating profit grew by 5.6% year-on-year to CNY 30 billion. Affected by short-term factors such as the capital market volatility, our net profit decreased by 20.3% year-on-year to CNY 36.4 billion. If we look at the business lines regarding CPIC Life, it focuses on value growth, and its core operating performance remains stable. To be specific, its GWP was CNY 267 billion, up 1.4%.
New business value was CNY 14.3 billion, down 6.5%. If we look at the channels, value of the agency maintained a steady growth, and the bank insurance was under pressure for the value growth due to a high base from last year, and also because of the phased changes in product mix and changes in the market environment. Our agency channel is pursuing steady growth and team optimization. It focuses on customer differentiation, optimize the product supply to match customers' diversified needs. Its GWP was CNY 185.3 billion in the first three quarters, up 0.5% year-on-year.
We also see the share of the mid-tier and above customers increase by 6.3 percentage points to 33.6%. Thirdly, the team size remained stable. At the end of the third quarter, there were 182,000 agents, and the monthly average first-year premium per core agent was CNY 91,000, up 27%. For the bank channel, it's still value-oriented. It strove to improve capacity building in channel cooperation, customer management, product and service mix system, team development, and digital empowerment. In the first three quarters, we deepened strategic cooperation and tailor-made products and services accordingly, and improved the resilience of the channel structure.
The bank's GWP was CNY 62.4 billion, up by 7.1%. For our group channel, we played up our strengths to explore new models of worksite marketing and inclusive finance. In the first three quarters, its GWP was CNY 16.3 billion, up 0.3%, of which worksite marketing achieved new regular premium of CNY 1.14 billion, up by 14.4% year-on-year. We have served over 280 million people under inclusive insurance schemes. If you look at the P&C side, it enjoyed stable growth and improving underwriting profitability.
For the first three quarters, it continued to focus on customer management and service system. Its primary GWP was CY 163.2 billion, up 1.9%. It strengthened the business quality control and optimized its risk reduction management. It also accurately assessed catastrophe risks and improved disaster prevention and response, and achieved a combined ratio of 96.2%, down 1.4 percentage points. For the auto insurance side, it continued to promote business quality and efficiency and achieved CNY 80.5 billion in GWP, up 0.1%.
We continue to optimize business mix structure optimization with the share of private vehicle auto premiums up 0.4 percentage points year-on-year. We also improved the customer management to enhance customer service, upgrade mid-office platform to improve customer reach and management. The renewal rate of auto insurance policies for individual customers increased by 1.9 percentage points. For the non-auto insurance, we continue to optimize business structure and quality.
The GWP was CNY 82.7 billion, up 3.7%. We also deepened the group customer management, expanded service scenarios in key industries. At the same time, we are also building different scenario-based products and also to leverage the mid-office service platform to build a one-stop full service, smart service system, and continuously cultivate new growth points for non-auto insurance. For agriculture insurance, we continue to optimize the claim processes and improve service quality and efficiency. If we look at the asset management facing the new low interest rate environment and capital market volatility, we continue to strengthen our market judgment to maintain risks properly.
With predefined SAA, we executed disciplined and flexible TAA, captured the fixed income asset allocation opportunities amid interest rate fluctuations, and maintained resilient investment performance. As of the end of the third quarter, the group's investment assets exceeded CNY 3.2 trillion, up by 6.4% from the end of the previous year. Our unannualized net investment yield was 2.4%, down by 0.2 percentage points, and the unannualized total investment yield was 2.5%, down by 2.7 percentage points. Well, that wraps my presentation on the performance in the first three quarters. Thank you. Let's start the Q&A.
Thank you, Mr. Zhao, for your presentation. Now we will start the Q&A. Well, if you want to ask any questions, please press star and one, and please identify yourself and your employer before asking any questions. Please ask no more than two questions. Well, we have the first question from Dongwu Securities. Thank you.
Thank you, Mr. Zhao, for your presentation. I am Sun Ting from Dongwu Securities. Of course, if you look at Q3, the profit N BV are under stress, but CPIC's numbers is quite solid compared to your peers. For example, your operating profit for life is growing and the profitability of the P&C business is also up by a lot. I have two questions. First of all, on the asset side. Actually, I remember last year, I remember that you mentioned something about the 2026 prospects. Now, my question also on the grand opening of 2027 in terms of the asset liability side.
Now, of course, we did not expect this kind of pressure for the second half of this year. So what about 2027? About bank channel or your product strategy, et c. Secondly, on the investment side, we know CPIC is a conservative or cautious investor. Now, actually, your investment yield is quite good. My question is, in terms of SAA, in terms of equity investment, what is your view or idea? What is your view on the position or share of equity investment? Any specific ideas, et c? Thank you.
Thank you for the questions. First of all, on behalf of the life. Regarding the grand opening of next year, we have already made the preparation. First of all, you see, we combine the grand closing with grand opening. I believe we have told you before in the previous meeting, for CPIC, we have quite an even-paced business. I would say we have equal emphasis on the grand opening and the grand closing. We focus on value. We continue to focus on our customer. We strive to push our business. We are cautiously optimistic about the grand opening for next year.
For next year as a whole, well, since interest rate is going down. You see, actually, Q3 this year, we faced a lot of pressure because of actually a lot of the product termination in Q3 last year. Secondly, if we look at the regulatory trends, more and more stricter rules regarding the market practice integrity, and also we need to be aware that there is a lot of market demand. If we look at the preparation of our grand opening for next year for agency channel, we are going to focus on all levels of our customer segments, products.
We focus on whole life and also health products, annuity products. We will try to target or tailor-make our products to our customer needs. For the grand opening, we will focus on whole incremental life, and whole annuity. For the agency, in terms of our sales force, we need to focus on organization growth and new recruitment and training, especially focusing on the core agents. In terms of the customer, we will use digital tools to improve their customer satisfaction and also increase the conversion ratio.
In terms of bank channel, this year, we would say the bank channel faced quite some pressure this year as a whole, but I think it is a fatal issue. This year, I would say in terms of volume, in Q1, it is quite a lot of pressure, but in Q2, Q3, things were better. For next year's grand opening for bank channel, first of all, for the channel strategy, we are going to focus on this kind of big state-owned banks. First, of course, the focus will be on the branches of those state banks.
In terms of product, we are going to focus on value growth. We should have more competitive products, especially what we need to manage the products with the specific channels. For example, our whole life products and annuity products will be the focuses. We are going to further push up the value of our customers. For the bank channel. So much about the bank channel.
Thank you. I will answer the second question. Especially on the investment side. In terms of equity investment on the whole, we actually look at our overall SAA, our risk preference, and tolerance. Equity investment has a lot to do with the long-term economic growth of China. If we look at the macro side, in the long term, we are still positive. We do see a lot of resilience from China's economy. I would say, going forward, in terms of technology growth and also other areas, the economy of China is still bullish. I believe the fundamental is still very solid. There is a possibility of a slow bull market or a long-term slow bull market.
That gives us a lot of room for maneuver. But of course, FAA and also the proper share of equity investment, all these questions are company-specific issues. I would say any company should base these on its asset liability requirements, on their strategy, and also on various constraints, so that they can come up with a more appropriate FAA or TAA or share of equity allocation. For the macroeconomy, I would say, given the low interest rate in China, fixed income investment will face a lot of pressure in terms of high return, especially for new investments.
Equity investments should be able to bring in the high returns to improve our net investment yield to complement the fixed asset investments. It's inevitable. But how to better manage the volatility so that the equity investment will be placed under the overall SAA. It can bring not only long-term risk-based return, but also not to produce short-term impact on our investment yield. For CPIC, I would say, guided by SAA, given that all these kind of limits or constraints, we are going to do it in a phased way, in a proper way, incremental way. We will not take one-sided or aggressive actions. We need to balance the yield, volatility, and the long-term return, and the current period financial challenges.
I would say this is the way for equity investment to contribute to our overall investment activities so that we can better manage or cover our long-term liabilities. But of course, equity investment is quite a complicated issue. There are various or different segments or styles for equity investment. We need to look very closely at the different sectors, how to do it on a regular basis. Of course, I believe we look. There's a lot of rotation of sectors in the first half of this year. In Q3, we also see a very quick reversal of those rotations on those sectors. I'm going to say it's a very complex market out there.
Our high dividend stock strategy is still valid, so that we can have a quite good long-term comprehensive yield. It's a very balanced approach, and we will stick to it. It's a very well-tested strategy. I mean, the high yielding shares or stocks strategy. Given that, since the market now we are facing has a lot of new features, we need to also focus on growth areas. For example, high-tech sectors. We need to look out for new opportunities, new areas of growth. Of course, we need to do a lot of work in this regard.
That is what we call the core-plus-satellite strategy. So we can have not only the long-term stable return, but also when the market rotates, we will be able to seize upon these opportunities. For example, recently, we see quite a lot of adjustment for the high-tech sectors. But on the whole, we believe China still presents a lot of potential in terms of growth for high-tech sectors. This kind of adjustment is also where the opportunity lies.
Especially, you can see there's a lot of free cash flow there. Many of those companies have a lot of entry barriers. I believe there is still opportunity there. We will keep doing it, keep utilizing our diversified investment strategy to secure, to accumulate our asset for the long run, to better utilize the satellite strategy so that these strategies can complement our core strategy, that is the high yielding stock strategy.
Thank you. Let's welcome the next question. I have a gentleman from Haitong Securities.
Thank you. I have two questions. Number one, about next year's asset prospects or liability prospects. To be specific, actually, starting from July of this year, you are promoting par annuity, which gives a lot of or more commission for the channels so that your agents can get money. What about your grand opening for par annuity? What's your target for volume of business for the grand opening? Secondly, in terms of solvency ratio, given this kind of big volatility of the stock market, your solvency is quite stable. What are the reasons? Is it because of the dropping interest rate? No. For example, if the stock market fluctuated by 10%, how will it affect your solvency?
Thank you. I will answer your question. Number one, for the business prospects of next year. For bank assurance, I believe bank assurance will grow better than agency. That's my personal view. Secondly, I would say, if we look at agency and the banker, for agency, in terms of product. Actually, we have said in our interim report is that our products must be based on customer needs. We need to further improve it or optimize it. But of course, China is very big.
There's a lot of differences between eastern China, western China, northern and southern China. I would say we need to diversify our product offering. For example, of course, we are going to offer par products and also traditional products. We will have annuity and also whole of life products. So on these four dimensions, we are going to boost our sales.
So for next year's grand opening, I would say for par annuity and par whole life products will be our absolute focuses. For example, par annuity, its share will be higher than this year's share. If we look at the traditional products, it will become complementary products for the agency channel. For the bank channel, it's similar to agency but different. It will focus on par incremental life and par annuity. For other products, they will not be focused on that much.
Second question regarding solvency. Thank you for your interest. You actually did some calculation. I would say our solvency, by June, is above 200%, and it's still above 200%. In terms of the core solvency ratio, it was 144%, actually 1 percentage point higher than the previous number. I would say our solvency adequacy ratio are always prudent or stable. That is thanks to our effective asset liability matching. Let me give you an example. Actually, our net asset grew by 9.3% by the end of the Q3 this year. I would say our self-driven capability is quite strong.
So with effective ALM and control on our business growth and also our effective capital planning. I would say through all these, through our self-driven profitability, we can replenish our actual capital, which is very good for our solvency ratio numbers. Especially if we look at the insurance side, we had a lot of boost or underpinning from the insurance business. We can accumulate internally our capital. For P&C side, combined ratio is improving, business is growing. I would say this is very positive, and also for the solvency.
Of course, market interest rate is quite low. Actually, it is dropping slowly. It would actually have some influence on our solvency numbers. The equity market volatility, of course, it will have some negative impact on our solvency numbers, unlike the interest rate trend. But on the whole, I would say we have quite stable solvency numbers. We are less impacted by the equity market volatilities. You mentioned about the sensitivity issue. Well, of course, we can do some more thorough, do some more complex calculation after the meeting.
Thank you.
Let's welcome the next question. We will have a question from Credit Suisse.
I have two questions. Number one on NBV. Actually, your NBV number dropped by 7%. What is your yearly target? Are you going to have a positive growth for the whole year? How can you make up for this? The second question about the ALM. I believe you previously have mentioned about some indicators during your midterm or your interim report. What about the numbers in September? Could you elaborate a little bit on this? That is to say, your duration gap. Is it good? Do you have the effective measures? What is the target for your duration gap, et c.
Let me answer your question. As of the end of Q3, our NBV negative growth was 6.5%. Well, that was kind of expected because we had quite a high base last year, Q3 last year. Actually, it is not only CPIC. Our peers, they are also having negative growth in Q3. For the whole year, we are still aiming for positive growth of NBV. To be specific, number one, we need to play up our diversified channel strategy. That is agency and also bank channel, and we also have a worksite marketing channel or the group channel. We will rely on all these channels.
Secondly, for agency channel itself, we are going to focus on more protection-type products and health insurance products so that we can have more growth in terms of value. For the bank channel, you are going to see that we are going to focus on the high-end annual growth. For worksite marketing, we are going to be more targeted. I believe our business model is more sophisticated. If we look at the company as a whole, we are going to better manage our cost input and output. For HQ and the branches, we need to have more coordination, synergy, and better combination or integration of grand closing with grand opening so that we can have positive NBV growth for the whole year.
Thank you. Let me answer the second question regarding the ALM. Of course, there are some new rules, regulatory rules on ALM of insurance companies. We also paid a lot of attention to the new rules. We conducted a lot of research and study sessions. We developed the relevant systems. We adjusted some of our rules and structures. Actually, even today, on the group level, we are going to set up a standalone ALM body.
For our main subsidiaries, they are going to also have their own independent ALM organizations. In our interim report, we have three sets of numbers comparing cost and input and output, cost and benefit. Those numbers showed you what we have already done, and especially before the release of the new rules. Actually, starting from 2023, we have actually launched the net investment yield plus strategy. That is to say, we made a lot of preparation beforehand. Of course, we do not know the specific details for the new rules, but I would say what we have anticipated, actually, a lot of it coincide with what was actually there in the new rules.
I believe we have also shared with you some of our own indicators. I mean, our own indicators and the differences between our indicators and regulatory indicators. There is a lot of similarities. For example, setting up of these thresholds. Sometimes we have stricter thresholds than the regulatory numbers. I would say we have done the basics. These are solid work. Even compared with those three sets of numbers, I would say that I can mention some of the changes. If you look at the new fixed income asset yield.
I would say in comparison, in Q3, there is a slight drop. But on the whole, I would say our yield is still higher than our liability cost. For the second set, I believe the gap is widening. That is to say, for the long-term net investment yield, the gap is in our favor. I mean, the guaranteed cost is going down slowly. The positive gap is widening. If we look at the three-year average comprehensive investment yield minus the liability cost, there is also a positive gap. If we look at the three sets of numbers, I would say in Q3, compared to first half, there is no significant worsening, and even some numbers are getting better.
But you would say, of course, you need to calculate as per the regulatory indicators, regulatory calibers. You are correct 100%. We have already done relevant calculations. We have done simulations. Based on these simulated calculations, I would say our regulatory indicators were 100% in line with their requirements. That is we hope going forward, we can further improve. So we are going to give you better picture, more clearer numbers as per regulatory requirements.
Thank you.
We will have a gentleman from Huaxi Securities.
Thank you. Good evening. I have the questions. Number one, we see the interest rate is going down. So what is your judgment for interest rate? How will it influence your SAA? Second question regarding equity. Your position in equity is quite cautious. Your OCI share is not high, and the trading category is quite good. As Mr. Su mentioned, by increasing the allocation in equity, you can have better net investment yield. But going forward, how about these kind of high dividend yielding stocks? Are going to be put into the category of OCI or the trading category?
Thank you for the question. For the fixed income assets. For the interest trend, I believe it is something we have been tracking for a long time. This year, on the whole, it actually declined a little bit more than the expectations. I would say in the next three to five years, I believe the trend will still be a downward one. Maybe slowly downward. But the absolute interest rate is getting lower. How much more can it go down further? Maybe in the short term, there might be some kind of a short-term recovery rebound.
But of course, any kind of a market fluctuation will have this kind of long-term pattern and the short-term volatility. On the whole, if we look at China as a whole, and China has a very big economy and the population is aging. I would say with lowering return on capital, on the whole, business or economy is slowing down. That is to say, in the mid to long term, the interest rate is pointing downward. The macroeconomic controls or actually long-term intervention is focusing less on short-term stimulus.
Chinese government also want to have a better quality growth. On the whole, I would say the mid to long term interest rate in China is going to decline slowly. If you look at the structure. Previously, we focused on the real estate and the infrastructure. Now we focus on technology and sustainability. Previously we focused on high leverage. Now, we don't need this kind of very big mid and long-term financing. I believe there will be less need for this kind of very big financing demand. We need to prepare ourselves for these long-term changes.
But I don't think the interest rate will drop fast quickly. I don't think it will do that because, first of all, you see there are constraints. For example, the interest rate spread for the banks also face pressure. The Chinese government, they are going to use this kind of interest rate corridor to better help the banks, better manage their spread. China's economy is still recovering. It's a process. I would say, you see some kind of old productivity is going out.
There are going to be new quality productivity in China, production in China. Actually, you see the global market, the overseas market, they are having higher or growing interest rate. China will be cautious about its low interest rate. I believe overall, mid term, long term, the interest rate will go down slowly with short-term volatility. Of course, given this, the equity investment will be a big issue. OCI share for CPIC equity investment is about 33%, higher a little bit than the first half. What is a proper number of OCI number?
I don't think there is a consensus on this issue. Different companies have different approaches to this, and we are all optimizing. There is no long-term consensus on the OCI number. What is a proper one? Well, it depends on the product mix, ALM, risk preference, and also tolerance for the interest rate fluctuation. But it's a very complex issue. I believe for CPIC, we would want a balanced approach. A balanced approach in terms of accounting categorization. Eventually, I believe it will be highly correlated with our investment strategy. We want to have a high yielding dividends, high dividend yielding stocks.
Also at the same time, have some new areas of investment yield. Not only we will secure the long term investment yield and also secure some short term high investment yield. But of course, it will be difficult to do. It will be hard to find the proper assets. It will be hard to satisfy on both fronts. We are also thinking about this. Maybe we need to further optimize our high dividend-yielding stock strategy. If we want to have a stable net investment yield, we should look for better yielding stocks.
If we want to be immune from short-term volatilities, we should have a higher OCI share. We also want to have a very appropriate price gap, trading gap. We would want contribution to the current period profit. To do that, we can also put these assets under the TPL category. It depends on the asset's performance on the market. It should be a case-by-case issue.
The meeting is about to end, we only have time for one last question.
Thank you. I'm Liu Qi from GF Securities. Number one on P&C. The combined ratio improved to 96.2%. My question is what's your prospects for the whole year and for next year? If you look at the premium growth, not a lot of good growth there. What will be the growth area? OPAT is lower than the net profit. Short-term investment yield is negative. Why is OPAT smaller than the net profit?
To answer your question on the P&C side. For P&C, Q3 combined ratio improved. I would say that's very good news because we kept improving our quality of business. Be it auto insurance and non-auto insurance, our combined ratio are declining. If we look at the quarter-on-quarter basis, if we say Q3 is always having a lot of natural disasters, catastrophes. Q3, we also had this year, had a lot of disasters. Q3 did worse than Q2 because of the catastrophes bigger impact for Q3 this year. Excluding that, I would say the trend is very positive.
If we look at Q4, if disaster, natural disaster remain the same as last year, then for the whole year, I believe the trend is improving all the way. We are quite confident about our profitability for P&C business. For business development this year, because if you look China's vehicle market, there's a positive growth. Our auto insurance premium actually slowed down. In Q4, I don't think there will be a rebound of new car sales in China. For our side, we are actually developing our group customers very hard. We are improving our customer service. Especially, you can see for the non-auto business, the trends are more positive. There is growth expected.
Secondly, on the OPAT issue, you see OPAT for CPIC is quite stable, up by 5.6% year-on-year in Q3. I believe this has met our expectations. OPAT and the net profit, because of the different caliber in the calculation. For net profit on the new accounting standards includes more contents. It involves the one-off factors, if such a one-off issue, one-off items, non-occurring items. For OPAT, some insurance groups actually use OPAT to reflect the sustainability of our insurance business. OPAT is an indication of a stable business development.
OPAT actually excluded short-term volatility, short-term investment volatility, for example. Some of these kind of short-term unrealized gains, unrealized loss will be excluded. That's different from the net profit. OPAT actually excluded a lot of non-recurring or one-off gains or losses. We also have this kind of non-insurance subsidiaries. Actually, we don't look at their long-term investment yield. That is also a factor. OPAT and the net profit also have different actuarial assumptions. It's not 100% comparable. It's only natural that there will be a difference between OPAT and the net profit. I wouldn't say OPAT should always be bigger than net profit. Sometimes it is just natural.
Well, thank you very much for your attention and also for your questions. If you have more questions, please contact our IR team after the meeting. That concludes our teleconference. Thank you very much. Bye-bye.