French insurer Axa has sold its Canadian business for $C2.6 billion ($2.5 billion) to Canada’s biggest property and casualty insurer, Intact Financial.

Axa Chairman and CEO Henri de Castries revealed the sale when releasing a new five-year strategic plan at a meeting with investors in Paris last week.

The sale is part of the company’s strategy to retreat from maturing Western insurance markets.

The deal to sell the Canadian businesses values Axa Canada at 13 times implied underlying earnings for 2010, the company says.

Axa Canada is the sixth largest home, auto and business insurance company in Canada and its addition will add around $C2 billion ($1.9 billion) in premium to Intact, lifting its total gross written premium to more than $C6.5 billion ($6.3 billion).

Mr de Castries says Axa will be more selective in mature Western markets in the future by concentrating on higher-margin business, while focusing on developing countries in Asia for growth.

In April, Axa completed a deal that saw it sell its Australian life business to AMP and take full control of its Asian operations, which were the fastest growing in the group last year.