Generali has begun working with Wonder, a payments fintech, to expand the types of payment methods the insurer can accept from policyholders in Hong Kong.
The move is both to grow the top line by ensuring customers can use e-wallets or other payment methods, as well as to position Generali for future business, such as embedded insurance, says Alessandro Lavenia, chief financial officer for the Hong Kong business.
The arrangement is just for the Hong Kong businesses in general insurance, although Lavenia says there could be aspects that are adaptable in other markets, or other products. “There are some synergies,” he told DigFin. Working with Wonder should allow Generali to quickly adopt new payment methods that arise in the future.
Citi pitch
Lavenia’s team began to rethink payments a year ago following requests by the sales and distribution teams. At that point, Generali only accepted bank transfers and Visa and Mastercard. The company already used a technology vendor for its payments, but found it wasn’t suited for handling new payment methods.
“We needed to implement a dedicated gateway for each new type of payment,” Lavenia said. “Each project could take months. It meant a lot of work for our staff, more risk, and a slow time to market.” He declined to name the vendor, which has since been replaced.
Lavenia asked the firm’s partner transaction banks for ideas. He needed a solution that wouldn’t burden the IT team and could readily integrate with Generali’s accounting and reporting systems. After some back and forth, his relationship manager at Citi, Carine Souvannavong, pitched using Wonder because it would only require a single integration.
The insurer has already been using fintechs in other parts of the business, including underwriting and customer service. The company was comfortable with outsourcing and leaving the burden of updates on the partner, so long as it passed Generali’s compliance requirements – and provided Generali was confident that Wonder could get the job done quickly.
Broader partnerships
Jason Ngan, co-founder and CEO of Wonder, says the company began doing payments in Hong Kong seven years ago, as a unit of New York-based fintech Bindo. It targeted restaurants and bars, and more recently taxis, all services that traditionally only took cash but where customers want to use a variety of e-wallets or a credit card.
“If we can integrate digital payments in taxis, why not with insurers?” Ngan said.
The deal reflects a fintech strategy at Citi, which also recognized gaps in its merchant acquiring capabilities. Its digital payments unit, Spring by Citi, is focused on credit-card processors.
“Bindo complements us,” said Sean Brierly, head of fintech sales at Citi in Hong Kong and an executive in the bank’s regional transaction bank. “We can process cards while they can manage the other online pieces.” Bindo also allows acceptances of other credit cards, such as UnionPay and JCB.
Citi’s partnership with Bindo is likely to go beyond a single deal with Generali. Ngan mentioned cross-border payments, noting UnionPay, WeChat Pay and Alipay capabilities open China.
Open and embedded
Brierly cited the emergence of open-banking standards in various regional markets as one driver of business.
Open banking is predicated on data sharing, and Generali is also thinking along those lines. The firm already works with local fintech Yas Digital for covering bike accidents based on usage: people buy insurance when they rent the bike and sensors ensure their coverage lasts during the time they are riding.
“We want to develop new businesses related to specific risks for people riding the MTR or taking a taxi,” such as loss of property, Lavenia said. Such digital microinsurance requires volumes, and it also requires a smooth customer experience – a single hiccup on an app means people won’t complete the purchase.
“Embedded is not huge today, but we want to diversify our lines of business,” Lavenia said.
Ngan added, “Embedded insurance can help improve service levels, say by providing coverage for a wheelchair that got damaged in a taxi.”
Brierly says embedded models will get a boost with the adoption of digital assets. “My guess is, if you can buy small-ticket policies through a digital asset like a stablecoin or a central-bank digital currency, we’ll see there’s pent-up demand.”
Another growth area Generali is considering is parametric insurance for small- and medium-sized enterprises, which need cover for climate-related disasters such as floods. (See our story on Yas for insights into these models.)
The insurer will also work with Wonder to extend its payment acceptances to other products. For now it is starting with low-volume general-insurance (property and casualty) products, where there’s just one premium.
But the insurer will explore fitting this to life insurance. High-ticket products and those with multiple premiums or features require human sales. The goal isn’t to fully automate these, but to make the experience smoother for customers, which should boost sales.
