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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, ladies and gentlemen. Welcome to the CPIC 2019 Interim Results Presentation. I'm Ma Xin, Co-Chairman of CPIC Group. It's my great pleasure to have this opportunity to share some of the information with all of you, and welcome you all to this event.
Now today, we are going to give you the results of our interim performance and also our future strategy. This event will be conducted in the form of conference -- teleconference and in Mandarin with English simultaneous interpretation. Now let me introduce the other executives of CPIC Group to this event. They are Mr. Kong Qingwei, CPIC Group Chairman; and Mr. He Qing, CPIC Group President; and Pan Yanhong, CPIC Life General Manager; and Mr. Gu Yue, CPIC P&C Chairman; and Mr. Yu Bin, Vice President of CPIC Group; and Mr. Zhang Yuanhan, Chief Actuary and CFO of CPIC Group; and Mr. Rong Guoqiang, CPIC's Chief Technology Officer; and Mr. Deng Bin, CIO of CPIC Group. First of all, Mr. Chairman Kong Qingwei and President He will give you a presentation on the company's interim results, and then we will conduct a Q&A session.
First, Chairman Kong.
Good morning, everyone. I'm Kong Qingwei. Well, as usual, we are going to conduct this event in the form of teleconference though we do not meet face to face, but we will give you all the information in a very transparent way. I'm glad to share our results with you.
In the first half of the 2019, time flies so now we should review the performance of our first half. You see in the first half of this year, we faced with some difficulties. We pursued a steady development and delivered solid results. We focused on, on one hand, steady development in the new economic cycle and also on the performance of the business targets of the current period and delivered a solid result. And on the other hand, we pressed ahead with Transformation 2.0 in a bid to enhance capabilities for long-term growth and the implementation of transformation. In the first half of this year, we delivered solid business results and with continued increasing confidence and strength as we can see for the first half of this year. We posted a lot of numbers related to the #2. First of all, gross written premiums amounted to CNY 207 billion, up 7.9% year-on-year and due to favorable tax policies and better investment results, of course, it's come to the general market. And the net profit outperformed our target, with net profit attributable to shareholders of parent company reached CNY 16.1 billion, up 96%; and our AUM reached CNY 1.8 trillion, an increase of 12.5%; and the embedded value totaled CNY 365 billion, up 8.6%. And our capability to acquire and retain customers continued to improve with our total number of customers reaching 134 million. And under [indiscernible], our group comprehensive solvency margin ratio reached 296%. And CPIC was also included in the recently released Fortune Global 500 ranking for the ninth consecutive year and occupying the 199th place for the first time, up 21 notches from last year.
While delivering good results, we supported China's national strategies in all around ways and served the real economy and fulfilled our corporate responsibilities and we provided financing the risk protection to China's key national initiatives and economic development, played the role of a driver of the economy and the social development and to cushion social shocks. To contribute to the Yangtze River Delta region integration initiative, we supported the demonstration zone for green and integrated development of the Yangtze River Delta and the new Shanghai Free-Trade Zone, provided the integrated insurance and the financial solution to the science and technology center and the rural areas invigoration initiative.
As long-term investors, we supported infrastructure projects in transportation and energy in Central and Western China. We intensified efforts in green financing and enhanced development of the liability insurance against environment pollution.
We have provided our products to more than 2,000 firms across the country with total SA over CNY 2.46 billion. And in June, we joined hands with Shanghai Urban Investment and Construction company and established a Shanghai environment protection financial services company to provide funding and services to environmental protection efforts and organization of the Yangtze region.
In July, we signed a cooperation agreement with China International Import Expo and was officially designated as a sponsor and the insurance provider of the event. Then we are the only insurance group to achieve this result. We will do an even better job as insurance with a full range of insurance-related licenses.
We're also deeply involved in poverty alleviation, and we are going to combine poverty reduction and poverty prevention. By the first half of this year, we have covered over 5.98 million documented impoverished households and provided a total of CNY 2.32 trillion in sum assured to the poverty-stricken areas.
Our Fangpinbao antipoverty insurance program marked the establishment of the innovative model of poverty reduction. So far, it has provided over -- covered over -- against the poverty to 40 million vulnerable people in 126 countries across 13 provinces and 2 municipalities.
Our Rainbow e-commerce platform is designed for people to make projects from the impoverished household and has reached -- realized a turnover of CNY 15 million benefiting 15,000 poverty-stricken households.
First rollout of our transformation initiatives, our capability for growth -- for future growth has been enhanced. We rigorously pushed forward the development model of insurance products plus service and achieved initial success. Our development in health care industry under the brand of CPIC Home gained momentum and begins to take shape. And actually, I'd like to [ state ] the experience center in Hangzhou, and after substantial progress in Chengdu and Dali, we also have new projects in Hangzhou and we joined hands with Orpea firm, leveraging their expertise in premium elderly care and foster brand as a top-notch elderly care operator in China. And this year, Orpea is going to join the second import expo. So we are going to build a holistic system.
And we have Taibao Lanben, a full life cycle health management services was rolled out steadily, which provides integrated solutions spanning the whole process of hospital visits, also health counseling, advance payment medical bills -- of medical bills, and green channel for terminal illnesses.
We continued the decent collaborative development to enhance capability in providing integrated services to customers and driving value growth. The number of customers, which entered into partnership with us increased by 25% by the end of last year. So far, we have formed a partnership with 58% of China's provincial and municipal governments.
Strategic partnerships boosted rapid development of agricultural insurance, occupational annuity, government-sponsored critical illness programs, third-party admin of social medical insurance and product liability insurance for high-tech equipment.
We have been selected as occupational annuity manager of all the 25 provincial municipal governments, which started the bidding process and become China's second insurer with business licenses of agricultural insurance in all administrative regions of the country.
For individual customers, we have focused on establishing 100 exemplary sites for cross-sell and extended the product lineup for cross-sell. In the first half, the auto premium cross-sold by live agents grew by 10.9%, and short-term medical insurance product covered 10% of our long-term life insurance customers, up 3.4 percentage points. We intensified the digital empowerment to drive operational efficiency. We achieved a rapid growth of users of our online services amounting to 71 million in the first half of this year, up more than 52%. At the same time, we established a NPS platform, putting in place a closed-loop management mechanism of customer experience for CPIC Life and P/C.
The app for the agency channel can support a variety of functions like customer relationship management, assistance in claims handling, training, real-time sales performance and team management with number of average user, monthly average user -- active user for this app reaching 640,000.
We also enhanced capability in online claims management for auto insurance. The number of claims processed online reached 520,000. And well, eligible customers may receive payment in a minimum of 15 minutes.
As China's first brand for agricultural insurance, the e-agricultural system accelerated upgrading. We achieved the digitization of land patches management covering 43 million of farmlands of 10,000 villages in 261 counties of 24 provinces.
We also developed a biometric identification platform for livestock insurance supporting biometric identification, head counting and automatic weight reading. Looking to the future, we'll also face some challenges. At this stage, transformation is going to be structural challenges. For example, life insurance growth driven by agent head count has been losing momentum while a new development model based on higher agent productivity and income is yet to be established.
Automobile insurance needs to be further enhanced into -- further enhance capabilities in retention and the direct acquisition of customers.
On the investment side, at the fall of the long-term interest rate curve calls for better asset/liability management capability.
In digital empowerment, mechanism for agile response of business and IT teams are yet to be improved. Much remains to be done to boost deployment of health care big data and the health services integration. And the model of our insurance products plus service is still in its early stage.
To meet these challenges, forging ahead with transformation is the only way forward. Next, we're going to continue to roll out the following initiatives centering on high-quality development. We will continue to enhance the [ branding ] of CPIC service, push forward development of -- the development model of insurance products plus services making service our differentiating competitiveness. We will accelerate the establishment of a new model for the agency channel, focusing on agent productivity and income to achieve a shift of value growth drivers.
We will optimize resource allocation for renewed business and improve retention of high-quality auto insurance customers, boosting the building of high-quality growth model for the business.
We'll enhance asset liability management, set up group capabilities in integrated investment research, risk control and portfolio allocation. We'll establish a mechanism for agile response.
We will continue to deepen the model of collaborative development to enhance collaboration at grassroots levels so as to turn this model into tangible value growth.
Transformation is always a process of twist and turns and may present many unexpected challenges as we proceed. In 2019, we will focus on overcoming the difficulties and resolving structural issues and much towards the target of being the best in customer experience, business quality and risk control capabilities and industry leadership for healthy and steady development.
Thank you. I will now hand over to President He who will walk you through the performance of our business segments.
Thank you, Chairman Kong.
Now I will give you an overview of our performance. First of all, if you look at the customer number, it continued to grow. It totaled 134 million by the end of the first half of this year, adding 7.1 million in 6 months. Of this, the number of customers with 2 insurance policies or above grew by 15.7% to reach 23.45 million.
An increasing in the expanding customer base lays a solid foundation for our sustainable development. At the same time, given our focus on customers and the continued efforts in anticipation of protection product lineup, we continued to increase the level of protection for customers. By the end of the first half of this year, the average SA on critical illnesses per customer grew by 6.5% (sic) [ 6.4% ] to CNY 150,000. The number of auto insurance customers with third-party liability SA exceeding CNY 1 million increased to 11.4 million, up 18.5% year-on-year. And for the first time, we disclosed the OPAT in the interim results announcement which should account -- which should note short-term investment movement and changes to evaluation assumptions and the impact of material one-off factors on the basis of net profit so it is more aligned with the long-term business nature of life insurance.
In the reporting period, the group OPAT attributable to the parent amounted to CNY 13.6 billion, a growth of 14.7%. Of this, the life OPAT was CNY 11.09 billion, up 18.9%.
We always value communication with our investors because your support is indispensable to our development. Improving transparency not only provides more information about our business performance, but also helps us improve internal business management conducive to long-term and healthy development of the company. And that's very good for the long-term development. Going forward, we will persist in this direction committed to creating sustainable value and returns for our shareholders. In life insurance, the NBV growth was weak, declining by 8.4% from the same period of last year. In the face of this decline, we took a host of measures to drive business development such as heightened training of protection business selling skills; enhanced control of pace of growth; increased the product and the service innovation, which helped to deliver a recovery in the second quarter, with NBV growth more evenly distributed.
We upheld the protection as the basic value proposition of insurance, deepened the product and the service innovation and delivered steady increase in residual margin, which grew by 10.5%, versus the end of 2018, amounting to CNY 315.46 trillion.
CPIC Life reported renewal business growth from the agency channel of 13.5% and driving GWP growth of 5.6% for the first half reaching CNY 138 billion.
In addition to top line growth, business quality remained healthy. The surrender ratio for the first half fell by 0.4 pt to 0.5%.
And for productivity. For the first half, the monthly average number of agents reached 796,000, a decrease of 11% for the -- from the same period of last year. This core sales force maintained stability. Monthly average number of active and high-performing agents reached 309,000 and 168,000, increasing slightly. FYP per agent amounted CNY 5,887, an increase of 5.0% year-on-year.
Next, we'll deepen Transformation 2.0 and center on sustainable value growth and the empowerment of agent benefit. We will focus on enhancement of sales force via high-quality recruitment, intensified training and increase of empowerment by technology, products and services. In particular, we will strengthen our capability in new customer acquisition and up-sell, follow the path of high-quality development so as to achieve sustainable value growth. On the P&C side, the business recorded a combined ratio of 98.6%, down by 0.1 pt from the first half of last year. Of this, loss ratio stood at 59.2%, up 1.2 pt and expense ratio was 39.4%, down by 1.3 pt. While maintaining very stable underlying profit, P&C business reported rapid growth with GWP reaching CNY 68.247 billion, up 12.5%. Of this, auto insurance proactively adapted to the changing environment, improved its renewal management and reported GWPs of CNY 46.133 billion, a growth of 5.2% year-on-year. The non-auto insurance achieved fast growth, driven by emerging market -- emerging lines and recorded a GWP of CNY 22.114 billion, up 31.4% year-on-year.
So for the first half of this year, both auto and non-auto delivered underwriting profitability where the combined ratio of auto business increased by 0.4 pt to 98.4% and therefore, non-auto falling by 2.2 pt to 99.5%.
Auto insurance achieved a shift in the growth drivers via enhanced renewal management. The attribution analysis shows that renewal business has become the key driver of auto premium growth.
Emerging business lines such as agriculture and the guaranteed insurance drove rapid growth of non-auto business. Agricultural insurance continued to expand the geographies of business and innovative products. In the first half, CPIC P/C and Anxin Agricultural Insurance combined realized a primary insurance premium of CNY 4.308 billion, up 43.6% year-on-year, which gives them a steady increase in market share.
Guarantee insurance delivered a solid growth based on effective risk control. They reported CNY 2.6 billion in GWP, up 46% (sic) [ 47% ]. Personal line accounted for over 80% of the total with stable business quality, that is why we achieved such a good year-on-year growth for the first half. Now let's turn to asset management. We saw a steady growth in our asset under management over the past year. At the end of June this year, growth -- the group assets under management totaled CNY 1.873 trillion, up 12.5%, of which the group in-house AUM reached CNY 1.356 trillion, a growth of 10% and third-party AUM by CPIC AMC, Changjiang Pension, CPIC Fund combined totaled CNY 516.7 billion, up 19.5% from the end of 2018 pointing to sustained improvement of market competitiveness. We continued to enhance asset liability management and optimize strategic asset allocation. With the guidance of strategic asset allocation, we shift the market opportunities and the increased allocation in long-duration treasury bond, high credit rating corporate bonds and equity. We've also increased the investment in high-quality private financing instrument while maintaining liquidity.
The share of fixed income assets stood at 82.6%, down by 0.5 pt from the end of last year. And the core equity investment reached 13.7%, up 1.2 pt. And of this, stocks and stock funds amounted for -- amounted to 7.4% of the total investment assets, up 1.8 pt.
In the first half of this year, we achieved solid investment volumes. Annualized comprehensive investment yield rose by 1.1 pt to 5.9%, the highest in 3 years as a result of equity marketing rally. The total investment income amounted to CNY 32.6 billion, up 24.7%, mainly attributable to increased gains from securities trading and the fair value movement as a result of the equity market rallies with annualized total investment yield at 4.8%, up 0.3 pt. Net investment income totaled CNY 29.69 billion, up 13.5% year-on-year. This stemmed mainly from increased interest income from fixed income investment. The annualized net income and net investment yield reached 4.6%, up 0.1 pt.
We adhere to long-term value and prudent investment to maintain prudence in credit risk exposure. 99.8% of our corporate bonds and financial bonds issued by nongovernment-sponsored banks had an insurer or debt rating of AA or above. Of this, the share of AAA reached 92%. And of the private financing instruments with external credit rating, the share of the AAA reached 93.7% and the share of AA+ and above reached 99.9%. Except for those exempt from a debt issuer external credit rating, the rest boasted guarantee or pledge of collateral. The underlying projects of our private financing instruments spread across sectors such as infrastructure, nonbank financial institutions, communications. So we actually -- we voluntarily added more information disclosure in this announcement so that you can have a better understanding of our underlying investments.
And the blended nominal yield of our investments of private financing instruments was 5.6% with an average duration of 6.4 years.
That concludes my presentation. Thank you.
Thank you, Chairman Kong and President He. Now let's enter into the Q&A session. Now it's 9:30 a.m., we have more than 300 investors online. [Operator Instructions] Now let's start the questions.
[indiscernible]
The connection is bad, so I can barely hear the gentleman.
Now okay. Now we know that the government is pursuing SOE reforms, so for example, these kind of share options for the big financial SOEs. Now CPIC is a very good company in Shanghai, SOE company. So is CPIC going to become a pilot project? And of course, we see a lot of personnel changes in the past year. So how will the company further improve top -- your good people, your top talents. So that's my first question about the reform of SOE and your talent retention measures.
And the third -- second question about the sales, your business. How will CPIC judge the pressures, the cycles for developing business especially for the second half?
Excuse me. So sorry to interrupt, actually, the connection is patchy. So I'm not sure what the problem is. So could I just repeat your question? The first question about the reform of SOEs in Shanghai, right? Second question, is it about the life insurance policy -- the life insurance business development, right?
Yes.
Thank you. Thank you for your questions. I didn't get your point initially but I'll try to answer your questions. Now first, about the reform of SOEs in Shanghai. Now for companies like CPIC, personally, I believe this kind of reform is critical to its long-term development. There should always be a reform. For example, for the previous 10 years, we've become a listed company. It's a structural or shareholding reform. And of course, Shanghai just announced that it's going to pursue this kind of comprehensive SOE reforms. As the Chairman of CPIC, actually I'm encouraged and excited about these measures announced by Shanghai government because the essence of the reform is actually sharing of the risks and enjoying of the results and achievements by all. So the key to it is to retain -- attract and retain top talent. Actually, in our Transformation 2.0, we also have one big initiative about talent conservation. So -- but to be specific about the stock options, we will focus on 2 long-term building: one is long-term capability building and the second is long-term incentives. So we will, of course, study this closely guided by regulatory policies and we will abide by information disclosure rules as a listed company. Currently, we don't have the relevant information to disclose, and we will keep you posted. Thank you.
Thank you for the first question. We didn't quite get the second question. So maybe we should continue with the next gentleman or the next one?
From Citigroup -- Citibank. I'm Michelle from Citibank. I have 2 questions. Number one, you talked a lot about transformation, the achievements. Now my question is about the KPI for your senior executives. Is there KPIs for the transformation initiatives? And for second half, for life, for your key values, is there any target?
Second question about the dividend. So dividend, is it going to be linked to OPAT or accounting profits?
Now let me just repeat the first question. Now we said -- well, you mentioned a lot about the achievement of transformation in the PBT. So now we'd like to -- I'd like to know is there any kind of KPIs being linked to transformation for executives?
Thank you for the first question. Now about the transformation in the first half of this year and also the achievements of transformation, I believe we have touched upon many of them in the previous presentations. Now you -- not -- on the mechanism to drive the transformation, actually we have combined the project management methodologies with the CPIC realities and we have built a mechanism to boost CPIC transformation, encompassing execution, decision making, think tanks and project management and we have built kind of a monthly review mechanism. Each year, we have these kind of transformation review meetings to look into every transformation project. And we also have this kind of a quarterly color-coded assessment, green light, red light, amber light, et cetera. So for the 14 projects initiated at this half of the -- first half of this year, for the 14 projects, 7 of them actually got a green light assessment and 5 of the projects -- well, 6 to be specific, 6 got the amber light and actually 2 projects got a red light.
And we also got -- have annual assessment or evaluation mechanism. So for each project leader, each project team and project members and also the management team, we have relevant KPI targets, which will be included in their annual performance evaluation. So with this kind of an evaluation mechanism, we achieved a good synergy and we have been seeing good results for driving forward these transformations.
Now if I may just repeat the second question. Now the second question is about dividend policy. Now is it packed or linked to net profit or is it going to be like with our peers that is linked to the OPAT?
Well, I answered this question. Now the company has always focused a lot on paying out dividend, that is, providing reasonable returns to our investors. And since we got listed, our dividend level increased each year and the payout ratio also were quite high compared to peers. As you mentioned, for this interim announcement, we released our OPAT for the first time. Now OPAT can better reflect the long-term nature of the insurance business and also the company's fundamentals. So going forward, when deciding -- determining our dividend level, we will gradually link it to OPAT, but also take full consideration of our solvency and the net profit levels so that we can provide more stable and long-term investment return to our investors.
Thank you. Now the next. Next, a gentleman from Guotai Junan Securities.
Two questions. Number one, Chairman Kong mentioned, money-driven development model is problematic. So do you have a better model for managing the channel, agency channel? Second, about embedding the value. Now we see the value of in-force business grew quite slowly. What's the reason?
Now if I may just repeat the 2 questions. Number one, about the agency productivity, they'd like to know what are the future measures or differentiated measures to boost the productivity of our agents. Is there going to be more investments to build a competitive edge? Second, about the actuary. Now for the first half of this year, the VIF only grew by 6.5%. It's quite slow. So what are the reasons behind it?
Thank you for the questions. I'll answer the first question. Now for this year, the life insurance industry is under pressure. Now a main issue or main reason is the growth of agency head count. It's reaching a bottleneck. So going forward, I believe we need to enhance the productivity of our agents. I believe we need to focus on several things. Number one, focus on the high-performing agents so as to build a differentiated tiered level, tiered agency channel, that is focusing on this kind of high-performing active agents. Number two, we will boost the top agents' development, that is to build this kind of honorary system for our top agents. And then most importantly, to enhance training system so as to empower the front-tier agents, to enhance this kind of a basic training, front-line training and also use digital technologies to build online digital training system. We are already doing all these. And also, in terms of the compensation scheme for the agents, we are actually revising the compensation scheme. So we are focused on developing the team and also enhancing productivity rather than focusing solely on organization expansion. And for the empowering of the agent teams, we're going to use digital or technology measures so as to enhance the quality of the team, agent team, and their productivity. I believe also, of course, maybe other companies are doing pretty much the same thing because we believe -- well, of course, I mean, we don't know how to do it, but what's important is try to stick with it for the long time.
Well, for the second question, VIF grew by 6.5% for the first half of this year, slightly lower than previous years. Now the main reason is because of the NBV growth is slightly slower. So -- and the base for VIF is quite high and also some adjustment of actuary assumptions. On the whole for the long term, our VIF and EV growth will maintain a stable level. For the whole year, it will maintain a double-digit growth basically.
Well, let's welcome the next. Well, now a lady from Haitong Securities. Thank you.
Two questions from my side. Number one, for Ms. Pan, now for life business, your business grew slower than your peers. So what's the reason for the slower performance? So what are the measures to address it for this year? What about the whole year? So either -- what's the likelihood of a positive growth for the whole year? Second question, about the assets side. Now we see your bond allocation has a duration of 15 years. So what was the specific assets and the yield? And what about your overall duration of your assets?
Thank you. Thank you for your questions. Now actually, the life insurance entered a new cycle for the whole industry, and now it's going to turn more to high-quality growth. So for CPIC Life -- for CPIC Group, we are pursuing Transformation 2.0. And of course, CPIC Life, we will focus more on both the quality and the volume of the team focused on enhancing the quality of agents. So for the -- well, if you look at the numbers for the first half, it's not very good, but we believe we are confident about the future transformation. Now first of all, we are confident because we're focused on value growth. We persisted in doing so, and I believe you have a very good result. You can feel it.
And also, for the -- I believe we are confident we have the right people, right agents of high quality. And also, we are confident because we have a successful experience for transformation. We now realize that we need to -- we need some time for transformation to produce results. So I believe everyone in CPIC Life has a clear understanding of the transformation. And of course, this round of the transformation might prove then even harder. It will take even longer time because maybe for the previous round of our transformation, we just -- well, for example, we just expanded the team, expanded the agency channel while downsizing the bank channel, bank insurance channel. But in this round of the transformation, we need to do modification. For example, we are going to focus on value, focus on agency team, focus on -- and the focus on empowerment, for example, empowerment by training, by digital technology so as to change their capability, change their skills. So -- and we also need to get rid of some of our old habits, get rid of some of our old behaviors so as to build our capabilities internally. It's like a, well, a marathon. For example, in the past, maybe we run very quickly. But then you become very tired before you finish the whole marathon. If you run too fast at the beginning, you can't finish even 10 kilometers. So how should we do it?
We should change our pace, we should change our shoes, we should adjust our pace, we should slow down as for the full whole -- for the long term. So in this kind of a change momentum, we should focus on more on the fundamentals. We should build our long -- build up our heart so that we can run faster -- run a longer distance. As I said, we should focus on value, focus on sustainable development and also focus on building the team and recruiting high-quality people, focus on empowerment. And we are going to develop this kind of a capability-driven agent team, focus on improve our recruitment, improve our training, improve team empowerment and that we move from focusing on new recruitment to focusing on retention. But of course, there are a lot of specific work behind these principles. I will skip the details. And if I have another chance, we can talk more in details.
Now -- but for this year's business target, I cannot give you a very specific forecast. But as I mentioned, for a life company, long term is more important than the current period. We are confident about the future. Thank you.
And if I may just answer the second question about the, well, investment. Our asset liability management is focusing on value, long-term prudent investment. So we should increase our duration and narrow down -- narrow the gap, duration gap. So for the first half of this year, we actually -- we saw that the long-term bond gives a relatively high yield. So we allocated a lot in 30-year treasury bond, so that is why we have a stable duration with only a slight lengthening of the duration. You see, if we do not invest in long-term bonds, the duration of our assets will gradually decrease. So to offset that kind of a gradual decline, we invested in long-term bonds. So you can see for the second half -- for the second quarter, the 30-year treasury bond has produced a lower yield. So actually, that means we took the opportunity when the yield was still high. Now on the whole, our asset allocation is 6.5% and the liability gap is 15 years. So the gap is less than 9. So the gap of 9 is not very -- it's not a bad gap for the life insurance business. We will continue to track our gap. At the same time, even with this kind of gap, our solvency is still very good. We are very prudent. This kind of a good solvency gives us a very good basis for investment. Going forward, we'll continue to lengthen the asset duration and then narrow the asset and the liability gap.
Thank you. Now the next -- now Ms. Jiang Li from Morgan Stanley.
Jenny from Morgan Stanley. My question is -- we talked a lot about digital empowerment. So the question is, could you sum up, in the first half of this year, what have you done in terms of the digital empowerment, especially for agents of your life company and also for P&C in terms of enhancing efficiency? Now going forward, what other projects are you going to launch? And compared to peers, what's your strength and weaknesses in terms of digital empowerment?
Now I can answer the question. For the first half of this year, for the group, we invested a lot in digital technologies. So for example, we adjusted our structure and framework. Now in terms of digital delivery, project delivery and the capability, it increased by 15% to 20%. Now for life and the P&C subsidiaries, we have dozens of projects for digital empowerment. To give you very simple examples, for example, our life agents now can have a better training due to digital empowerment. So for example, you see our agents and external partners, external students, they can all use digital technologies for training with enhanced efficiency and effectiveness. So now participation ratio can reach 70% to 80%. And we also launched this kind of a smart visit, that is to say with smart visits, our agents can visit our customers smartly in a fast way. And this function has been used by 650,000 agents. Now this kind of a smart visit can enhance interaction between agents and customers with, well, a lot of the data gathered.
And also, for the first half of this year, our -- we also have a lot of applications using AI in terms of voice recognition, et cetera. I believe we are on par with our peers. For our services, our sales and operational processes, we all use digital technologies, smart measures. For example, for the Typhoon Lekima, we launched a catastrophe platform using AI technologies. There's kind of a remote sensoring, satellite monitoring, et cetera, et cetera. And also, we utilized our data for covering a lot of the villages in China. So a lot of those information become visible to us.
Now you asked for the future plan. Now under the guidance of our Chairman and President, we are going to further boost 5 areas, for example, data capability, management capability, data service capability, et cetera. Now, we have a [ 40 pt ] of data, I believe, and that's a very big number compared to peers. And each day, we have more than 100 million visits in terms of data pushed through. So we have a lot of data for our frontline agents. We have profiles of more than 10 million customers. We also have a lot of technology transformation capabilities so that the frontline agents, they can benefit directly.
Thank you. Next, please
I'm Xue Yuan from CIC. Two questions from my side. First of all, you talked about the collaborative synergy. Now what are the specific measures? And do you have KPIs for that?
And second, about agents. FYP declined, but in your first year, commission increased. So what are the reasons?
Now the first question, collaborative synergy -- now collaboration is a way of using resource more effectively. It includes sharing the resources, also marketing resources, operational resources and centralized management. Now CPIC Group, we effectively linked different sectors to serve the customers in a comprehensive way.
So for the first half of this year, we did several things. Number one, we developed a collaborative mechanism for the company. For the group, we established a collaborative synergy committee. And on the subsidiary level, led by CPIC P&C, we had a steering committee. And for life, we also have a committee for cross-sell so that the collaborative mechanism has been embedded at all levels. And we also established 100 exemplary cross-sell centers. And for individual customers, for the life channel -- for the agency channel, we launched this kind of exclusive product mechanism and focused on the whole life cycle service for the customers. And the cross-sell actually produced more than CNY 8 billion in premium. And more than 23 million of our customers have more than 2 policies from CPIC. So for specific -- for strategic customers, we've built this kind of integrated sales management system to produce this kind of a basket of financial solutions. For the first half, we have -- we added 25% more strategic partners. And we get 100% selected as the provider of enterprise annuity in the bidding process. And we also have this kind of a cross-subsidiary customer services mechanism. And also, we offer this kind of management tools for our agent team, agent channels.
And the second question, the per capita income increased a little bit and the first year premium for per capita also increased slightly for the first half. And for the head count for the whole agency channel, it decreased a little bit. And for -- actually, the commission level for the same product remained stable, no change.
The next, please?
The next question is Kailesh from HSBC.
Two questions and one request, actually. Just if you could help us, just coming back to this issue about new business value for the life business in 2019. If you could help us, in the second half, what will be the key driver of NBV? Will it be volumes or margins? And obviously, if there's any sort of guidance you can provide on that, that would be helpful.
Secondly, on life OPAT, life operating profit, can you give us an idea of how much the residual margin unwind was as well as the operating experience therein? And obviously, any other balancing items? And the request is, before you report full year '19 results, could you give us 2 or 3 years of operating profit history for the group overall, the life business and the P&C business?
Well, I'll answer the question. For the second half of this year, I believe the growth will come from the new business. In terms of margin of our products, it will remain stable. But of course, there will be some kind of a product mix adjustment. Starting from July, we launched a long-term protection product in [ Huangshan ]. The margin of the product will increase a little bit compared to the old product. So this will help our NBV in the second half. Now the second question, we released the OPAT for the first time, and it has actually removed some of the nonrecurring -- one-off factors and this kind of changes of our assumptions. Now excluding all that, because of the assumption changes, for example, so that we can better reflect the whole changing factors for the whole life cycle of the policy and for this year's residual margin amortization included and also the spread, interest rate spread deviation, now operating deviation is positive and the other factors also in line with peers.
Now for previous years, I believe OP for the previous years grew by about 15%. Now we only registered this year's OP growth which was 14.7% for our group. And for life, it's 18.9% for life OP growth.
Thank you. Next, please.
I'm from Tianfeng Securities. Number one question, about actuaries. Now NBV declined a little bit in the first half, but the cost of capital increased. So what's the reason? Is that because of the product mix change? And we also see surrender ratio increased in the actuary assumption. But the VIF actually increased alongside the increase of a standard surrender ratio. Second question. Now CPIC P&C is doing very well with good combined ratio, performance, et cetera. And if we look at the peers, combined ratio actually of our peers -- of your peers increased slightly. So what's your forecast for the combined ratio going forward?
Now you see CPIC Group, for NBV, the cost of capital increased a little bit because of the changes to business mix. Now we -- the long-term protection policies, well, it's mainly traditional insurance which cost more -- which required more capital. That is why you'll see for the first half, our cost of capital improved a little bit. And the surrender ratio actually decreased in terms of the actuary assumption. So this kind of decline will increase, VIF increase, but it's not related to the new business value.
Thank you for your question. Now thank you for the P&C question. Allow me the opportunity. Now you see, this year, there's a lot of new changes for the P&C market for the first half, as the President and Chairman mentioned. For the second half, in terms of the forecast, if we look at auto insurance and with the deepening of commercial auto insurance, you see there will be more, for example, declining premiums per policy. And also, the expense will go down because of the stricter regulation. But this kind of a -- but the increase of loss ratio will increase combined ratio. Also, on the auto market, the sales of new cars in China is declining. So on the whole, for the second half, we believe there will be some pressure for P&C auto insurance. For non-auto business, now you see the Typhoon Lekima, well, it did some damage. Now actually, there is still -- it's still the typhoon season for the coastal cities. And also you see the, well, the pig disease, the swine disease also caused some damages, lingering damages. So we should pay attention to all these. So to respond to these questions, P&C will continue to improve quality control. Now we have a quite high standard for quality control, business quality control, and we have laid very solid foundations. But faced with commercial auto reform and these kind of natural disasters, we still need to do a lot.
For example, in response to Typhoon Lekima, we launched this kind of a risk radar and risk surveying machine. Now these machines played a very positive role in assessing those damages. And also, they helped a lot in terms of improving customer experience, but these tools need to be improved further. For example, our e-agricultural insurance, in terms of dealing with the swine disease, needs to be further improved. Our e-agriculture insurance has been developed over the past 5 years. It has constantly improved over the past 5 years. We have had a lot of improvement in these aspects, but we need more breakthroughs.
Secondly, we continue to pay attention to customer development and upsell and further exploring customer values. Secondly -- thirdly, we will continue to focus on digital empowerment. For P&C, it's a key topic. You see, the results for the past few years won't be possible without digital empowerment. Now digital empowerment cannot only improve efficiency and reduce cost, it can also produce very good customer experience and further improve the CPIC brand. Despite the challenges and pressures for the second half, CPIC P&C will continue with the good work, continue to improve our management.
Thank you. Well, time flies. I believe we only have time for the last question.
Actually, I have 2 questions, one for life and one for P&C. For life, agent income is increasing, but what about the structure? Now first year premium -- first year commission is only about CNY 1,000, but what about the whole year income? What's the focus on this kind of income growth? What's your target for your agents' income? Second, for P&C, now, the combined ratio is quite high. Is there room for further improvement for health insurance under P&C? So what's your strategy?
Okay. I'll answer your first question. Now for agent FYP, it's around CNY 1,250, slightly up. Now for per person, per agent income is CNY 3,300 amount. Well, it's not high. It's low income. But I mentioned going forward, we'll continue to improve agent income by focusing on this kind of building a tiered agency team. Now the average income wouldn't tell you a lot because we need to focus on high-performing agents, active agents. We need to empower them with digital skills, digital technologies so that our core agents, our active agents can remain with us for the longer term.
Thank you for giving me the last question. Now for the first half of this year, P&C saw a shift of growth momentum, especially growth actually from non-auto insurance accounting for 50% of the new business or newly added business. Now 4 main areas: overseas, guarantee and the core sector, individual customer. Now for individual customer, PA insurance and home property insurance and health insurance. So for individual business, now they grew by more than 50%. Now as you mentioned, for our individual business, home property and the PA insurance were at a normal range. But for health insurance, it grew very fast, but there is a side effect. The combined ratio was above 100%. If I may just explain a little bit. First of all, health insurance grew very fast. Secondly, health insurance is still an emerging business line under P&C company. So we need to further enhance its foundation. So I believe that that's a new focus of our company. And the way it leveraged our group level -- group-wide resources, for example, our CPIC Allianz JV has a very strong capability and expertise. We will leverage that expertise and also CPIC P&C's distribution network so to create synergy and that would give a positive growth, healthy growth for our health insurance. Then I'd like to thank all the management team for their answering -- for their answers. Now this interim results announcement, for the first time, released OPAT and also underlying assets and also guarantee -- risk management of guaranteed insurance and also productivity of our agents. All these newly disclosed information were added to this results announcement. If you have further questions about all that, you just talk to our IR team. Now -- well, that concludes this announcement. Thank you very much for your attention. [Statements in English on this transcript were spoken by an interpreter present on the live call.]