So far more than 14,000 people have reportedly been killed in the quake, including more than 100 schoolchildren that were killed when their school in Dujisngyan City collapsed.

The epicenter of the earthquake was 90km north-west of the province's capital and largest city Chengdu, which has a population of about 12 million. At least eight aftershocks, with a magnitude of 5.0 or more, have been reported.

Risk modeler Risk Management Solutions says property losses could reach between $10bn and $15bn. And although only a fraction of those losses will be insured, the earthquake is still likely to result in the highest insured losses in China to date.

Fellow risk modeler AIR Worldwide estimates insured losses are likely to exceed RMB2 billion ($300 millio).

Domenico del Re, senior model manager at RMS in London, said the extent of destruction is still uncertain because of a communications

But he added: "As the west coast of China has become increasingly expensive, many domestic and international companies have set up operations in Chengdu to take advantage of the lower property and labor costs. Although many of the commercial buildings will have been constructed to withstand some level of ground-shaking from earthquakes, we can expect to see a large number of insurance claims coming from this area."

Office blocks in Shanghai and Beijing were evacuated and ground-shaking was felt as far away as Hong Kong, Taiwan and even Hanoi, Vietnam.

"The quake occurred along the border between the more fractured rock of western China and older, denser rock to the east," said Bingming Shen-Tu, China project manager at AIR Worldwide. "Dense rock propagates seismic energy over a large area, which, together with the large magnitude of this event and the long-period waves it generated, explains why it was so widely felt, particularly by people in high-rise buildings."

The region has suffered

In 1978, in response to the magnitude 7.8 Tangshan earthquake which killed at least 240,000 people in 1976, China enacted strict building codes. However, it is difficult to determine how strictly the codes are enforced and there is uncertainty over whether newer buildings' performance will match their theoretical design. Older buildings and traditional constructions are likely to have sustained severe damage.

"This event is a reminder for organizations considering moving into China that business continuity insurance should be a risk management priority, due to the country's susceptibility to earthquakes," said Del Re at RMS.

Losses for insurers are likely to be mitigated by very low penetration in the region of the epicenter – insurance take-up is about 2%-5%, estimates AIR. But take-up rates for projects under construction are higher – close to 40% –which could lead to higher losses in rapidly-growing Chengdu.