PARIS (Reuters) - French insurer AXA AXAF.PA will narrow its acquisition focus to 16 key countries and could sell some assets in markets where it lacks scale, its executives said on Tuesday.

FILE PHOTO: Logo of France's biggest insurer Axa is seen in front the compagny headquarter in Paris, France, August 4, 2016. REUTERS/Jacky Naegelen/File Photo

“We want to focus on fewer countries. We want to focus on these countries where we have scale and potential,” Chief Executive Thomas Buberl told analysts at an investors’ day in Paris.

AXA singled out 10 developed markets - such as Germany, France, Belgium, Italy and the United States - and six in emerging markets - Brazil, China, Indonesia, Mexico, the Philippines and Thailand - countries that together account for nearly 90 percent of AXA’s profits.

“Our M&A (mergers and acquisitions) strategy will focus only on those 10 plus six countries,” Buberl said.

AXA earlier this year ruled out major takeovers. Buberl said on Tuesday that the company did not want to overpay for acquisitions, and would be ready to use the money for share buybacks, if it did not find the right takeover target.The insurer also said on Tuesday it would dedicate 200 million euros ($234 million) of its annual one billion euro mergers and acquisitions budget to innovation.

The company said it could sell some assets in 26 markets where it lacks scale.

Chief Financial Officer Gerald Harlin said that did not mean that activities in these countries - which include Algeria, Colombia, Turkey and Russia - would all be sold.

“What we said is that we will rationalize it. There will be some that will be sold and there will be others that indeed will be managed for more profit,” Harlin said.

Buberl, at the helm of the insurer since 2016, aims to grow the business in areas such as health, protection and property and casualty insurance for small and mid-sized companies to help boost profitability.

NO CHANGE IN TARGETS

AXA earlier confirmed its earnings per share and cashflow targets at the investors’ day, drawing a muted response from the market, with AXA shares down 0.9 percent by 1430 GMT.

In reply to an analyst who voiced disappointment that the company had not revised up targets, Buberl said that now was not the right time to raise them, given the company was only a year and a half into its original business plan.

“We are well on the journey and we are accelerating. Due to the fact that I am coming from a German culture with a very prudent approach, I’d really like to keep it there and leave some room for later till 2020,” he added.

In health insurance, one of the business areas where it wants to expand, Buberl said AXA would consider putting money into medical centers.

AXA aims to increase earnings per share by 3 to 7 percent a year over 2016-2020 and have a cumulative cashflow of 24-27 billion euros over that time frame, before the proceeds from an initial public offering of its combined U.S. life insurance and asset management unit, scheduled for the second quarter of 2018.

On Monday, AXA presented a plan to simplify its operating model with a new structure based on geographical areas, rather than business units.

The reshuffle saw the departures of two executives who had worked at the group for more than 15 years - Gaëlle Olivier, head of AXA’s global property and casualty business and Paul Evans, head of life, savings and health.

($1 = 0.8556 euros)