Property and casualty insurers started a major effort this week to improve construction materials and building methods across the country.

The first order of business will be a massive study of building codes. Under consideration is a national system of grading communities on how well codes are written and enforced.The grades would be a factor in setting insurance premiums for the area.

"We are entering into a time when hurricanes, earthquakes and urban wildfires are becoming ever more prevalent," said Eugene Lecomte, president of the National Committee on Property Insurance.

To spearhead the effort, insurers on Monday announced the formation of The Insurance Institute for Property Loss Reduction.

The National Committee on Property Insurance, of Boston, is folding most of its operations into the new institute. The only exception is the committee's Property Insurance Plan Service Office, which provides advice and administrative assistance to state risk pools that sell policies to individuals unable to obtain insurance from the private market. That unit will operate separately from the new institute.

Enforcement is high on the institute's list of priorities. Hurricane Andrew, which devastated Florida and parts of Louisiana in 1992 revealed while strict codes were in place that required builders to use materials and construction techniques capable of withstanding 100-mph winds, many builders had cheated.

The new institute will also sponsor research into wind engineering, seismic and wind retrofitting and wind resistance capability of commercial structures.

Ron Schlattman, vice president of Safeco Insurance Co. of Seattle, said, ''The insurance industry has a long and distinguished history when it comes to mitigation efforts that reduce the loss of life, limb and property."

In addition to Hurricane Andrew, major losses in the past two years have included the Los Angeles riots, flooding of Chicago's downtown, the bombing of New York's World Trade Center and the flooding of the Mississippi River.

"The time to act is now, and the entity to provide the leadership is clearly the insurance industry," Mr. Lecomte said.

"The institute will serve as the industry's building code watchdog," he said. "It will pursue the development of new building materials and methods."

Mr. Lecomte said the new organization's board of directors will meet at the beginning of next year to select its president. Mr. Lecomte is interested in the post himself and he said he knows of no other candidates for the job.