The insurance sector has witnessed a considerably changing landscape in terms of regulation and the role of Credit Rating Agencies (CRAs). The coverage of these issues in the academic literature has been limited. In particular, prior studies on insurers’ Financial Strength Ratings (FSR) are scarce, notwithstanding the role of insurers as a key pillar of the global financial system. Further, very little prior research has investigated the rating dynamics across all four major CRAs active in the insurance sector. A high quality long-run dataset is constructed for this thesis. The primary aims of the research are to investigate FSR dynamics following three perspectives: (i) FSR evolution and sources of rating changes; (ii) examining the effect of split ratings on rating migration; and (iii) analysing the stock market impact of FSR actions. The first empirical chapter analyses rating trends of U.S. Property/Casualty (P/C) insurers for the four major CRAs. The chapter reports that AM Best has the least amount of rating activity during the sample period from 2000-17, whereas S&P is the most active CRA. This chapter confirms that the effect of the financial crisis on FSRs of P/C insurers was uneven. However, climate-related events are revealed as a discernible and important factor. The second empirical chapter analyses how split ratings can affect subsequent rating changes. The results show that split ratings among the four major CRAs are influential on each other’s future rating migrations. Moody’s is the CRA that appears most influenced by the other three CRAs in both upgrades and downgrades. AM Best is influenced by all three other CRAs for upgrades. The third empirical chapter examines the impact of FSR actions of U.S. P/C insurers on the share prices of the parent companies. The chapter presents evidence that negative FSR actions have a greater impact on the stock market compared to positive actions. The strongest market reaction is observed for negative FSR actions by Fitch. For S&P, the market reacts to negative Outlook, for Moody’s to negative Watch actions while for AM Best, a slight yet significant reaction to positive FSR actions, specifically upgrades, is revealed. This thesis provides many original contributions to the literature. Novel perspectives on FSR are presented. Due to the high quality dataset, new insights are revealed. In comparison to the broader literature on CRAs, the thesis draws attention to the unique role of AM Best as a key additional player in insurance company ratings. This study provides policy insights within the wider context of Solvency II regulations, climate change as a factor with serious implications for insurers, and the current debate on insurers’ systemic risk.