The conductor is moving in non-uniform magnetic field or in the time-dependent magnetic field. The interior of conductor create current to make energy loss called eddy current loss. The interior of conductor form a closed current lines that called eddy. The iron core and changing flux that create induced electromotive force in secondary side and also in iron core then form into eddy.  The eddy make iron core heat and consume electric energy. Due to permeability magnetic material as medium in transformer and mostly are conductor would produce eddy. The insulation damaged would enlarge eddy and the eddy loss also increased.
The eddy loss is the existence of  axial leakage flux at the position of the conductor. The factors affecting the eddy current in the conductor are the maximum flux density, the thickness of the conductor and the current density. The thicker the conductor, the higher loss of  the eddy. The insulation damage of transposition wire and composite wire is equivalent to increasing the thickness of wire and lead to the increase of eddy.  In addition to eddy, broken wires can also increase circulation.
The big conductor is moving in the magnetic field or in the changing magnetic field would create induced electromotive force to form eddy and make bigger eddy loss. To reduce eddy loss, iron core usually made of thin ferromagnetic conductor. The surface of these slice covered with varnish or insulating oxide. When flux across narrow section, the eddy is restrict in narrow loop with low electromotive force . the loop length is long and the slice materials with big electrical resistivity that could reduce eddy loss.