IRISH Life, which is facing possible industrial action by sales staff, is expected to report embedded value profits for 1995 of £74 million to £82 million this week. This would compare with profits of £73 million for 1994.
The life assurance group will disclose its product sales figures for 1995 on Thursday as well as profits for the year. Embedded value profits is a measure for life assurance companies which takes into account the future value of policies sold during the year, the value of existing business and increases in the value of shareholders investments.
Irish Life is expected to benefit from strong sales in the US, in France and at the International Financial Services Centre operation, Irish Life International. But sales figures are expected to show that the company's market share in Ireland remained under pressure while cutbacks in Britain will have resulted in lower sales there.
The 1995 results will be boosted by a reduction in the discount rate at which future earnings are translated into current day profits and by stronger investment earnings in better markets.
The life company has embarked on a plan to restructure its sales force which could result in industrial action. Last week, the union representing staff, MSF, warned that the plans to redeploy sales managers has put the company on a collision course with sales staff. Irish Life said it wants to reorganise its sales force in line with a changing marketplace and changes in customer requirements. The company wants to change its sales process as well as the manner of remuneration and the management structure of the sales force.
Changes in the remuneration structure are aimed at rewarding the quality of sales and the advice and service to customers rather than the volume of sales, Ms Jean Wood, chief executive for Ireland, said. Many of the existing sales managers are super salesmen" rather than managers she said, arguing that the role has now changed from that of a "super salesman" to a coach who can develop people and measure quality of performance.
Phase one of this plan is completed. There were three regional managers, now there are six. One of the former regional managers retired and of the four new managers, two were recruited from the company's 14 area managers and two came from outside Irish Life.
The next phase of the plan involves the 84 area and sales managers. Irish Life plans to abolish the grade of area manager and have 50 sales managers - 45 personal finance managers and five home service managers - reflecting the new divisions of the company's business.
Irish Life is selecting suitable people for these jobs and those not selected will be offered alternatives, Ms Wood said.
These options include remaining on the sales force as a salesman or becoming self employed agents selling Irish Life products.
The company is refusing to offer a redundancy package to the 32 salespeople who will be affected. There are roles for all the existing managers within the new structure and "no sensible company pays for good people to leave", Ms Wood said. Union sources said the company is concerned its managers would be recruited by its competitors.
On managers' concerns about their career outlook, she said: "In low growth environments there will not be the hierarchical structures of the past in any organisation. To me the most secure job would be a personal financial adviser where the salesperson has a strong relationship with the customer base and services it. Nobody can take that away and it is highly rewarding both financially and emotionally. It is a more secure job than mine." On concerns about remuneration, she said the company is guaranteeing that basic salaries will remain the same and managers will be paid the same commission (as the previous year) for the first year. At the same time their commission under the new process will be tracked so "they will have an opportunity to see where they need to make changes in their pattern of sales".
