This paper examines macroeconomic factors and their relationship to property-liability insurer rating transitions. We find that intensities of insurer rating upgrades and downgrades are significantly related to macroeconomic and market covariates. In particular, controlling for firm-specific characteristics including rating history, firm size, business mix, and organizational form, results indicate that macroeconomic conditions are important to insurers’ upgrade intensity, while insurance market conditions are dominant in insurers’ downgrade transitions.