Halifax Insurance is to create 85 new jobs over the next three years at its offices in the Shannon free zone, Co Clare.

The British insurer currently employs 155 at Shannon, where it opened in 2001.

Halifax Ireland operates in the UK insurance market, underwriting and administering creditor insurance policies. It has more than two million policy holders and last year underwrote premiums worth €410 million.

Speaking at the official opening of the Halifax offices in Shannon yesterday, the Tánaiste, Ms Harney, commended the company for bucking the trend that saw most insurers locate in Dublin rather than the regions.

She described its decision to expand the workforce as a hugely significant fillip for the mid-west economy.

"This is a tremendous boost for the Shannon region and for the economy of Co Clare. Halifax Insurance Ireland is one of the most high-profile and significant insurance companies to set up outside Dublin, and I am delighted to learn that their sales and performance targets are well ahead of expectations for their first year of production."

The announcement comes amid growing uncertainty over the long-term sustainability of the Shannon free zone.

Several months ago the region suffered a serious setback when US telecommunications company Tellabs closed its Shannon factory, with the loss of all 400 jobs.

Last year the incoming chief executive of Shannon Development, Mr Kevin Thompstone, warned the zone would be severely buffeted by the global downturn.

Yesterday he said it was "delighted" that a company of Halifax's stature had chosen to locate in Shannon but Mr Thompstone has warned that the region could be facing job losses in the industrial sector.