XL Capital Ltd. chief executive officer Mike McGavick believes the United States will see Bermuda's insurance industry as "too valuable to undermine" when lawmakers consider whether to make tax law changes that could hurt the Island's major industry.

In an interview published in yesterday's edition of Insurance Day, Mr. McGavick appeared less concerned about the potential for US tax changes damaging to the Island than he was in November when he told an international business audience at the Fairmont Hamilton Princess that the threat of such legislation was "extremely real".

Mr. McGavick told Insurance Day editor Richard Banks that Bermuda had been "one of the world's genuinely remarkable business stories over the past few decades".

"In the end it's my belief that the US Government will find it is in its self-interest to continue to benefit from the existence of the Bermuda insurance and reinsurance markets as it so demonstrably has through the existence of the market," Mr. McGavick was quoted as saying.

"So while there's a lot of rhetoric going on, my own belief is that self-interest will prevail and that the US Congress will come to the conclusion that Bermuda serves not only the economy, but the global economy, in a unique way."

Mr. McGavick said the Island's most valuable industry asset was its "aggregation of talent".

"While people could argue that talent is something of a movable feast, the reality is Bermuda is one of the world's greatest concentrations of talent and I think people will see that contribution as too valuable to undermine." The XL CEO was also upbeat about the prospects for his company, which suffered heavy losses in 2008.

"I would suggest that by all evidence now that we have the fourth quarter on the books, we were successful at showing that this franchise is viable, strong and in fact has been battle-tested in some of the worst economic conditions you can imagine and came through very well," Mr. McGavick said.