AXA , Europe's second-largest insurer, launched a new five-year plan to boost profits and cut debt on Wednesday, kicking off with the cash sale of its Canadian unit for US$2.7 billion.

AXA said the sale marks another step in its move to redeploy its capital in higher-growth emerging markets, where the French insurer plans to double in size and profitability on a comparable basis by 2015.

It also said it would look for acquisitions in emerging markets.

Under the new plan AXA is aiming for underlying growth of 10 percent in earnings per share by 2015 on a compound annual growth rate basis, Chief Executive Henri de Castries said at an investor day on Wednesday.

The group has been under pressure to deliver a convincing strategy after the financial crisis made it shelve previous growth targets.

It's not a revolution but it's a significant evolution, de Castries said. We've tried to learn our lessons from the crisis, even if some of you could think that it has taken too long.

Shares in the group were up 2.7 percent at 15.23 euros at 0750 GMT,, when the Stoxx Europe 600 insurance sector index <.SXIP> was up 0.3 percent. The insurer's stock has outperformed so far this year after a dismal 2010 performance but trades on one of the lowest price-to-book multiples in its peer group.

Under the five-year plan AXA is aiming for an operating free cash flow target of 24 billion euros and an adjusted return on equity target of 15 percent.

These are solid targets. If they are reached, it will be positive, said Pierre Flabbee, an analyst at Kepler.

EFFICIENCY GAINS

AXA has grown over the past three decades from a small mutual insurer in Normandy to a global player via a string of acquisitions. It is now turning its hand to making the parts fit together better and saving costs as the global economy recovers.

By increasing efficiency and cutting costs across its core life insurance and property and casualty insurance businesses, AXA aims to unlock 1.5 billion euros ($2.16 billion) in pre-tax cost savings by 2015. By 2013 the group said it will have reached 800 million euros in pre-tax savings.

AXA is targeting a property and casualty combined ratio -- total claims and expenses as a percentage of income -- of below 96 percent, driven by lower costs and more rigorous claims management.

In asset management, a troublespot for the group, AXA is aiming for a turnaround of net asset flows in 2011 and then 4 to 5 percent net new money flows per year between 2012 and 2015.

The focus of the group now is to be less 'all things to all people' and to focus on selective and profitable growth, said Espirito Santo analyst Joy Ferneyhough.

AXA also wants to cut its debt gearing to 25 percent, from 28 percent at the end of 2010.

The sale of its Canadian operations to Intact Financial Corp for C$2.6 billion (US$2.7 billion) in cash nets a one-off capital gain of 900 million euros ($1.3 billion).

The deal should also free up some capital and provide some room for maneuver in further reallocating cash and capital to growth markets, Societe Generale analyst Emmanuelle Cales said.

(Editing by Greg Mahlich)