French insurer AXA SA (CS.FR) said Tuesday that it plans to pump more investment into its emerging markets operations and businesses such as protection and health, as it adapts its business model to a changing market beyond the financial crisis.

AXA said it was confident of succeeding in its plan to acquire full control of Asian operations belonging to AXA Asia Pacific Holdings Ltd. (AXA.AU), a key part of its expansion plan in fast-growing emerging countries that has proved elusive in the last year.

Deputy Chief Executive Denis Duverne told reporters that the insurer expects to close the transaction in April 2011 after obtaining formal approval from Australian authorities.

The company will in future also place greater emphasis on generating free cash-flow. "This, together with an increased focus on improving the business efficiency of our operations, should allow us to gain flexibility and contribute to fund our investments for our future growth," Chief Executive Henri de Castries said.

Within its life and savings business, AXA aims to increase the proportion of new premiums delivered by its protection and health businesses over the next four years, and to raise the unit-linked portion of its Continental Europe investment and savings activities.

For its non-life business, the insurer is targeting a combined ratio of 100% in 2011. The combined ratio measures the percentage of premiums an insurer has to pay out in claims and expenses. A figure below 100% indicates an underwriting profit.

It also expects average targeted price increases for its non-life products of around 3% next year.

Kepler analyst Pierre Flabbee, who has a buy recommendation on the stock, said AXA's plan is ambitious, noting that the cost-cutting targets are aggressive and better than expected.

Analysts at Keefe, Bruyette & Woods said the tone in AXA's update and the targeted figures show the insurer has been listening to investors. "There may be some one-offs that need exploring, particularly with regards to the cash flow data, but superficially the comments are supportive," the analysts said.

At 1508 GMT, AXA shares were down 3.5%, or EUR0.47 lower at EUR13.07, underperforming the CAC-40 index, but were broadly in line with other French financial stocks.

AXA has repeatedly said it is keen to expand in emerging markets in Asia in order to grow its business.

On Monday, it teamed up with Australian wealth manager AMP Ltd (AMP.AU) to launch a fresh $13.1 billion bid for AXA Asia Pacific Holdings in a move that would allow AXA to exit the Australian market and focus on its plan to grow in Asia.

AXA, which owns 54% of AXA Asia Pacific, will pay around EUR1.8 billion in cash under the terms of the deal, which is expected to increase earnings-per-share in 2011.

AXA Asia Pacific said Tuesday that five of its six independent directors have decided to recommend the bid from AXA and AMP Ltd. in the absence of a superior offer and subject to an independent assessment. But one of the directors is seeking further information before deciding whether to back the proposal, the company said.

In a move to further its ambitions in the Chinese life assurance market, AXA last month formed an alliance with Industrial & Commercial Bank of China Ltd (1398.HK). The Chinese lender paid around CNY1.2 billion ($179.10 million) for a 60% stake in AXA-Minmetals Assurance Co., an insurance joint venture between AXA and China Minmetals Corp.

The company aims to increase the share of overall new business premiums from its protection and health activities by five points by 2015, while increasing the unit-linked portion of its Continental Europe investment and savings business new premiums by 20 points over the same period.

AXA sold the bulk of its life operations in the U.K. in June to consolidation vehicle Resolution Ltd. for GBP2.75 billion, but retained high-margin, low-capital intensive businesses such as healthcare insurance and wealth management.

The Paris-based insurer plans to present details of its Ambition AXA strategic plans in the first half of 2011.

-By Elena Berton, Dow Jones Newswires; +33 1 40 17 17 65; elena.berton@dowjones.com
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