The sinking of the Deepwater Horizon drill rig in the Gulf of Mexico will create a $52.8 million (EUR40 million) loss for German reinsurer Hannover Re, the firm said last week.

Its announcement came as the Coast Guard began efforts to burn a small section of the 600-square-mile oil slick from the sunken rig. The flow was threatening the ecosystem of the Louisiana coast, and a test burn was to precede a decision on a full-scale burn.

Hannover Re said despite the size of the loss involved, it is something the company can handle.

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