The insurance industry has appealed to the Government for the second year to issue a clear policy on whether it intends to join the European single currency.

The Association of British Insurers' report found that an overwhelming 95% of the 100 leading companies interviewed, controlling about 80% of the UK insurance market, wants definitive guidelines on the complex issues of convergence.

It is estimated that more than £1 billion of investment will be needed over three-years if UK insurance is to be ready for monetary union with Europe.

"It will need clearer signals from government before these resources are committed," said ABI senior economist, Chris Smith,

"Meanwhile, contingency preparations are going ahead to manage the risks that rapid entry would create."

The industry is split on the preferred speed of entry, with 47% favouring the euro being phased in over several years. As opposed to 32% which favour the "big bang" effect of joining quickly. The remainder take no view.

The ABI is warning against the big bang, favouring a three-year phasing in process, if Britain opts to join at all. It has previously warned that a shorter period could incur high costs.

About 60% of respondents regard euro entry as having a neutral impact on business.

Very few insurers expect price transparency to have a major impact on the pricing of policies.

Of those surveyed, 17% regard euro entry as detrimental to the industry. But 23% regard it as beneficial.

Management consultants Ernst & Young worked with the ABI to produce the report.

Britain's largest insurer, Royal and Sun Alliance, has already come out in favour of joining the euro.

It views price transparency as becoming increasingly important for commercial lines.

RSA argues commercial business is increasingly global. About half of its premiums are generated overseas.

Norwich Union spokesman, James Duffell, said about guidelines: "The sooner we get the date, the easier it is for us to finalise what we are doing."