Tornadoes, severe thunderstorm, floods and wildfires, once considered secondary perils, are rapidly becoming the leading cause of loss for insurers, according to a new Moody’s report.

The ratings agency’s senior client director, Robert Stevenson, attributed this to climate variability, changing population patterns and economic development.

“It no longer feels appropriate to call these events secondary,” Mr Stevenson wrote.

He preferred the term “earnings perils” for the profound impact on the insurance industry’s bottom line.

“While individually these events are relatively less severe than primary peril risks, they occur much more frequently and, in aggregate, can result in high losses for insurers,” he said. “In other words, death by a thousand cuts.”

Mr Stevenson said two years ago insured losses from earnings perils, at $73 billion, overtook primary threats, which stood at $63 billion.

The trend continued last year, a relatively benign year in terms of major catastrophes, that still saw over $100 billion in insured losses from earnings risks.

In the United States, more people are moving to climate risk danger zones, owing to urban housing shortages, favourable tax policies and the rise of remote work, among other things.

“At the same time, increased labour and materials cost, plus persistent supply-chain bottlenecks, has increased the cost of rebuilding in the wake of weather events, with litigation pushing the costs of insurance claims even further,” Mr Stevenson said.

The constellation of threats has led some property and casualty insurers to stop their operations in Florida and California, or to scale back their coverage in other areas, leaving homeowners with fewer options when seeking insurance coverage.

Mr Stevenson said: “The current state of affairs isn’t ideal for anyone, particularly insurers, who ultimately make money through the process of underwriting policies, collecting premiums, and paying claims.”

He said the solution is mitigation through millions of data points.

“It means using more granular assessments that better anticipate risks so that insurers can protect businesses, homeowners and their own bottom lines while identifying new opportunities for growth,” he said.