A new polarisation-insensitive and robust all-fibre-optic interferometer is outlined and demonstrated. The interferometer consists of a polarisation maintaining (PM) 3 dB coupler and a PM fiber in a simple Sagnac configuration. An insertion loss of 1.2 dB±0.1 dB and an extinction ratio better than 28 dB is obtained for an interferometer designed to have a free spectral range (FSR) of 16 GHz. Exploiting the interferometer for FM to AM conversion has high potential for overcoming dispersion limitations in long distance and high-speed optical communication systems