(Bloomberg) -- Axa SA, France’slargest insurer, plans to increase profitability through 2020 byseeking 2.1 billion euros ($2.4 billion) of cost cuts and growingdigital investments to tap rising demand for policiesprotecting savings and health. The firm may also seekacquisitions to boost growth.

Axa is targeting an adjusted return on equity, a key measure ofprofitability, of 12% to 14% between this year and 2020, theParis-based company said in a statement on Tuesday. Underlyingearnings per share are expected to rise 3% to 7% annually over theperiod, the insurer said.

“Axa’s earnings target is rather ambitious, given the strongdecline in interest rates,” said Andreas Schaefer, an analyst atBankhaus Lampe with a buy rating on the insurer. “However, theinsurer has a good track record of reaching its cost saving goals.”The shares were up 0.4% at 10 a.m. in Paris trading.

The insurer may spend about 1 billion euros annually onacquisitions “balanced across mature and emerging markets,” thecompany said in a presentation on its website. Axa is targeting 900million euros of underlying earnings in Asia in 2020, up from 551million euros last year, the company said.

Management reshuffle

Axa in March picked Thomas Buberl as its next CEO after61-year-old Henri de Castries made the surprise decision to leavethe group. Under de Castries, Axa grew into one of the world’sbiggest insurers through acquisitions in Switzerland and, morerecently, in faster-growing markets like China and Colombia. DenisDuverne, currently deputy CEO, will become chairman.

“We have an excellent starting point to pursue ourtransformation, and to adapt and grow in a challenging economicenvironment,” Buberl, 43, said in the statement. “We will furthergrow our operations in selected areas, such as commercial lines,capital light savings products and in Asia.”

Growing earnings is increasingly difficult for big insurers likeAxa as competition for premiums intensifies and quantitative easinglimits returns from investments such as bonds. Underlying earningsper share at the French firm have risen 7% on average annually overthe past five years. Allianz SE, Europe’s largest insurer, has saidit wants to achieve annual earnings per share growth of 5% onaverage from 2016 to 2018.

Net income rose last year

Axa’s net income last year rose 12% to 5.62 billion euros and thecompany has said it met its 2015 financial targets. Buberl,formerly CEO of Switzerland at Zurich Insurance Group AG, joinedAxa four years ago to lead its German business and joined theinsurer’s top-management committee last year. Buberl, a Germancitizen who already lived in France as a student, will become CEOat the start of September, marking the first time a foreigner leadsa major French financial institution with global presence.

Axa has dropped 18% in Paris trading this year, trailing the35-member Stoxx Europe 600 Insurance Index.

Axa last month sold its SunLife unit in the U.K. to PhoenixGroup Holdings. Axa is also divesting its traditional investmentand pension business in the U.K. as the company aims to grow therein property & casualty, health and asset management. The saleof SunLife, together with earlier disposals of its Elevate businessto Standard Life Plc and an offshore bond business, will cut netincome by 400 million euros.

Buberl already reshuffled his top management team. Paul Evanswill replace him as head of the life & savings business andalso head of the global health business, Axa said last month.Gaelle Olivier will be in charge of the global property &casualty business, replacing Jean-Laurent Granier, a veteran at theinsurer who decided to leave. Nicolas Moreau, head of Axa’s Frenchunit, is leaving for unspecified reasons and Jacques de Peretti issucceeding him in the role.

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