Despite the devastating damage caused by a 7.1-magnitude earthquake in western China last week, previous experience suggests insured losses will be low.

The quake struck the Southern Qinghai region on April 14, with the remote Yushu County and its population of about 100,000 suffering the worst effects.

State news agency Xinhua reported on April 18 that at least 1706 people had been killed, with 256 still missing. More than 12,000 have been injured.

Global reinsurance broker Guy Carpenter says the event compares in magnitude with the 2008 earthquake in neighbouring Sichuan province.

However, that quake occurred close to densely populated areas and claimed close to 90,000 lives, destroying 5 million buildings and causing economic losses of about $US120 billion ($129 billion) and insured losses of more than $US300 million ($322 million).

Damage in the sparsely populated Southern Qinghai region is expected to be much lower. The area is predominantly inhabited by Tibetan farmers and is also home to several mines.