Insulating paper is a traditional insulation material used for transformer insulation. Transformer development is not only limited to small sizes and large capacities, but also limited to insulation life as insulating paper cannot withstand high temperatures. Therefore, recent studies have focused on improving the performance of insulation paper and discovering better insulation materials. In this study, two types of polymeric materials, polycarbonate (PC) and polyester film (PET), were chosen for comparative analysis. In order to test whether these two materials could be used in oil-immersed transformers, the PC and PET were placed in transformer oil for thermal aging at 110°C and 130°C, respectively. The thermal cracking processes and fragmentation mechanisms of the PC, PET, and insulation paper were analyzed using thermal gravimetric analysis (TGA), differential scanning calorimetry (DSC), and atomic force microscopy (AFM), as well as their degrees of polymerization and surface morphologies. According to the test results, the initial thermal decomposition temperature of PC and PET are higher than insulation paper and exhibited a better thermal resistance. PC and PET have the potential to substitute insulation paper for large capacity power transformer.