SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C.  20549


                                    FORM 10-Q


             Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


   For the Quarterly Period Ended                              Commission File
   March 31, 1999                                              No. 1-11632



                           AMERICAN ANNUITY GROUP, INC.



   Incorporated under                                          IRS Employer
   I.D.
   the Laws of Delaware                                        No. 06-1356481



                  250 East Fifth Street, Cincinnati, Ohio  45202
                                  (513) 333-5300






   Indicate by check mark whether the Registrant (1) has filed all reports
   required to be filed by Section 13 or 15(d) of the Securities Exchange Act
   of 1934 during the preceding 12 months, and (2) has been subject to such
   filing requirements for the past 90 days.  Yes    X        No      



   As of May 1, 1999, there were 42,380,622 shares of the Registrant's Common
   Stock outstanding.


                                   Page 1 of 21



                        AMERICAN ANNUITY GROUP, INC. 10-Q
                                      PART I
                              FINANCIAL INFORMATION

                  AMERICAN ANNUITY GROUP, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEET
                              (Dollars in millions)

                                                  March 31, December 31,
                                                      1999       1998 
   Assets
     Investments:
       Fixed maturities - at market
         (amortized cost - $5,931.3 and $5,782.8) $6,092.1   $6,023.1 
       Equity securities - at market 
         (cost - $44.1 and $46.7)                     82.0       85.2 
       Investment in affiliate                        17.5       15.9 
       Mortgage loans on real estate                  21.3       40.1 
       Real estate                                    59.0       55.1 
       Policy loans                                  219.3      220.5 
       Short-term investments                         86.8       73.6 
         Total investments                         6,578.0    6,513.5 
    
     Cash                                             24.7       59.4 
     Accrued investment income                        99.4       97.6 
     Unamortized insurance acquisition costs, net    271.2      247.4 
     Other assets                                    150.5      152.5 
     Assets held in separate accounts                162.2      120.0 

                                                  $7,286.0   $7,190.4 

   Liabilities and Capital
     Annuity benefits accumulated                 $5,482.3   $5,449.6 
     Life, accident and health reserves              350.8      341.6 
     Notes payable                                   149.9      131.0 
     Payable to affiliates, net                       60.0       54.1 
     Deferred taxes on unrealized gains               61.1       84.3 
     Accounts payable, accrued expenses and other
       liabilities                                   143.4       96.1 
     Liabilities related to separate accounts        162.2      120.0 
         Total liabilities                         6,409.7    6,276.7 
     
     Mandatorily redeemable preferred securities
       of subsidiary trusts                          219.6      225.0 

     Stockholders' Equity:
       Common Stock, $1 par value
         -100,000,000 shares authorized
         - 42,379,991 and 42,576,933 shares 
             outstanding                              42.4       42.6 
       Capital surplus                               350.0      354.1 
       Accumulated deficit at December 31, 1992     (212.6)    (212.6)
       Retained earnings since January 1, 1993       362.2      344.5          
       Unrealized gains on marketable
           securities, net                           114.7      160.1 
         Total stockholders' equity                  656.7      688.7 
    
                                                  $7,286.0   $7,190.4 
                                        2

                        AMERICAN ANNUITY GROUP, INC. 10-Q

                  AMERICAN ANNUITY GROUP, INC. AND SUBSIDIARIES
                          CONSOLIDATED INCOME STATEMENT
                     (In millions, except per share amounts)


                                                   Three months ended           
                                                         March 31,            
                                                      1999      1998          
   Revenues:
     Life, accident and health premiums             $ 25.6    $ 46.8        
     Net investment income                           119.9     127.0    
     Realized gains on sales of investments            4.0      10.2     
     Equity in net earnings of affiliate               1.8       2.4         
     Other income                                      3.7       3.2           
                                                     155.0     189.6    
   Costs and Expenses: 
     Annuity benefits                                 64.9      71.1         
     Life, accident and health benefits               18.9      38.1           
     Insurance acquisition expenses                    8.2      14.0         
     Trust preferred distribution requirement          4.7       4.8         
     Interest and other debt expenses                  2.4       2.5        
     Other expenses                                   23.4      21.0   
                                                     122.5     151.5       
   Income before income taxes, extraordinary item and
     cumulative effect of accounting change           32.5      38.1    
   Provision for income taxes                         10.1      12.4       
   Income before extraordinary item and cumulative effect
     of accounting change                             22.4      25.7         
   Extraordinary item - loss on prepayment of debt      -       (0.8) 
   Cumulative effect of accounting change             (4.7)       -           

   Net Income                                       $ 17.7    $ 24.9           
                                                                      
   Average number of common shares:                                         
     Basic                                            42.5      43.1   
     Diluted                                          43.2      43.8           

   Basic earnings (loss) per common share:
     Before extraordinary item and cumulative effect
       of accounting change                          $0.53     $0.60        
     Loss on prepayment of debt                         -      (0.02) 
     Cumulative effect of accounting change          (0.11)       -        
     Net income                                      $0.42     $0.58

   Diluted earnings (loss) per common share: 
     Before extraordinary item and cumulative effect
       of accounting change                          $0.52     $0.59           
     Loss on prepayment of debt                         -      (0.02)          
     Cumulative effect of accounting change          (0.11)       -   
     Net income                                      $0.41     $0.57         

                                        3

                        AMERICAN ANNUITY GROUP, INC. 10-Q

                  AMERICAN ANNUITY GROUP, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                  (In millions)

                                                   Three months ended   
                                                       March 31,       
                                                    1999       1998   
   Common Stock:
     Balance at beginning of period               $ 42.6     $ 43.2   
     Common Stock retired                           (0.2)      (0.1)  
       Balance at end of period                   $ 42.4     $ 43.1   
    

   Capital Surplus:
     Balance at beginning of period               $354.1     $368.0   
     Common Stock issued                             0.2         -    
     Common Stock retired                           (4.3)      (1.7)  
       Balance at end of period                   $350.0     $366.3   


   Accumulated Deficit at December 31, 1992      ($212.6)   ($212.6)  




   Retained Earnings Since January 1, 1993: 
     Balance at beginning of period               $344.5     $252.1   
     Net income                                     17.7       24.9   
       Balance at end of period                   $362.2     $277.0   


   Unrealized Gains, Net:
     Balance at beginning of period               $160.1     $133.2   
     Change during period                          (45.4)       2.7   
       Balance at end of period                   $114.7     $135.9   


   Comprehensive Income (Loss):
     Net income                                   $ 17.7     $ 24.9   
     Other comprehensive income - change in net
       unrealized gains on marketable securities   (45.4)       2.7          
       Comprehensive income (loss)               ($ 27.7)    $ 27.6   

                                        4

                        AMERICAN ANNUITY GROUP, INC. 10-Q

                  AMERICAN ANNUITY GROUP, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (In millions)

                                                   Three months ended  
                                                      March 31,      
                                                     1999       1998  
   Cash Flows from Operating Activities:
     Net income                                    $ 17.7     $ 24.9  
     Adjustments:
       Extraordinary loss on prepayment of debt        -         0.8  
       Cumulative effect of accounting change         4.7         -   
       Increase in life, accident and health reserves 9.0       16.2  
       Benefits to annuity policyholders             64.9       71.1  
       Amortization of insurance acquisition costs    8.2       14.0  
       Equity in net earnings of affiliate           (1.8)      (2.4) 
       Depreciation and amortization                  3.2        1.9  
       Realized gains on sales of investments        (4.0)     (10.2) 
       Increase in insurance acquisition costs      (28.2)     (24.3) 
       Increase in accrued investment income         (0.7)      (1.0) 
       Increase in other assets                      (6.5)      (5.8) 
       Increase (decrease) in other liabilities       7.5       (2.3) 
       Other, net                                    (3.1)      (1.2) 
                                                     70.9       81.7  

   Cash Flows from Investing Activities:
     Purchases of and additional investments in:
       Fixed maturity investments                  (405.0)    (285.7) 
       Equity securities                             (4.3)      (4.4) 
       Real estate, mortgage loans and other assets  (6.8)      (4.7) 
     Purchase of subsidiaries                       (26.6)     (31.0) 
     Cash and short-term investments of
        acquired subsidiaries                        31.1       21.7  
     Maturities and redemptions of fixed
        maturity investments                        203.0      157.4  
     Sales of: 
       Fixed maturity investments                   163.8       97.7  
       Equity securities                              7.0        2.0  
       Real estate, mortgage loans and other
          assets                                     18.8       12.5  
     Decrease in policy loans                         1.2        0.6  
                                                    (17.8)     (33.9) 

   Cash Flows from Financing Activities:
     Fixed annuity receipts                         107.5      107.8  
     Annuity surrenders, benefits and withdrawals  (191.1)    (164.0) 
     Additions to notes payable                      19.0       50.0  
     Reductions of notes payable                     (0.2)     (25.5) 
     Issuance of Common Stock                         0.2         -   
     Retirement of Common Stock                      (4.5)      (1.8) 
     Repurchase of trust preferred securities        (5.5)        -   
                                                    (74.6)     (33.5) 

   Net increase (decrease) in cash and
       short-term investments                       (21.5)      14.3  

   Cash and short-term investments at
       beginning of period                          133.0       50.7  
   Cash and short-term investments at
       end of period                               $111.5     $ 65.0  

                                        5

                        AMERICAN ANNUITY GROUP, INC. 10-Q

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


   A. Description of the Company

      American Annuity Group, Inc. ("AAG" or "the Company") markets retirement
      products, primarily fixed and variable annuities, and various forms of
      life and supplemental health insurance through independent agents,
      payroll deduction plans, financial institutions and in-home sales.    

      American Financial Group, Inc. ("AFG") and its subsidiaries owned 83% of
      AAG's Common Stock at May 1, 1999.

   B. Accounting Policies

      Basis of Presentation  The accompanying Consolidated Financial
      Statements for AAG and its subsidiaries are unaudited, but management
      believes that all adjustments (consisting only of normal recurring
      accruals unless otherwise disclosed herein) necessary for fair
      presentation have been made.  The results of operations for interim
      periods are not necessarily indicative of results to be expected for the
      year.  The financial statements have been prepared in accordance with
      the instructions to Form 10-Q and therefore do not include all
      information and footnotes necessary to be in conformity with generally
      accepted accounting principles.  

      The preparation of the financial statements requires management to make
      estimates and assumptions that affect the amounts reported in the
      financial statements and accompanying notes.  Changes in circumstances
      could cause actual results to differ materially from those estimates.

      Investments  All fixed maturity securities are "available for sale" and
      reported at fair value with unrealized gains and losses reported as a
      separate component of stockholders' equity. 

      Short-term investments are carried at cost; mortgage loans on real
      estate are generally carried at amortized cost; policy loans are stated
      at the aggregate unpaid balance.  Premiums and discounts on mortgage-
      backed securities are amortized over their expected average lives using
      the interest method.

      Gains or losses on sales of securities are recognized at the time of
      disposition with the amount of gain or loss determined on the
      specific identification basis.  When a decline in the value of a
      specific investment is considered to be other than temporary, a
      provision for impairment is charged to earnings and the carrying
      value of that investment is reduced.
     
      Investment in Affiliate  AAG's investments in equity securities of
      companies that are 20% to 50% owned by AFG and its subsidiaries are
      generally carried at cost, adjusted for a proportionate share of their
      undistributed earnings or losses.  Changes in AAG's equity in its
      affiliate caused by issuances of the affiliate's stock are recognized in
      earnings when such issuances are not part of a broader reorganization.  

      Insurance Acquisition Costs and Expenses  Insurance acquisition costs
      and expenses consist primarily of deferred policy acquisition costs and
      the present value of future profits on business in force of acquired
      insurance companies.  In addition, certain marketing and commission
      costs are expensed as paid and included in insurance acquisition
      expenses.

                                        6

                        AMERICAN ANNUITY GROUP, INC. 10-Q

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


      Deferred Policy Acquisition Costs ("DPAC")  DPAC (principally
      commissions, advertising, underwriting, policy issuance and sales
      expenses that vary with and are primarily related to the production of
      new business) is deferred to the extent that such costs are deemed
      recoverable.

      DPAC related to annuities and universal life insurance products is
      amortized, with interest, in relation to the present value of expected
      gross profits on the policies.  These expected gross profits consist
      principally of estimated future net investment income and surrender,
      mortality and other policy charges, less estimated future interest on
      policyholders' funds, policy administration expenses and death benefits
      in excess of account values.  DPAC is reported net of unearned revenue
      relating to certain policy charges that represent compensation for
      future services.  These unearned revenues are recognized as income using
      the same assumptions and factors used to amortize DPAC.

      To the extent that realized gains and losses result in adjustments to
      the amortization of DPAC, such adjustments are reflected as components
      of realized gains.

      To the extent that unrealized gains (losses) from securities classified
      as "available for sale" would result in adjustments to DPAC, unearned
      revenues and policyholder liabilities had those gains (losses) actually
      been realized, such balance sheet amounts are adjusted, net of deferred
      taxes.

      DPAC related to traditional life and health insurance is amortized over
      the expected premium paying period of the related policies, in
      proportion to the ratio of annual premium revenues to total anticipated
      premium revenues.  Such anticipated premium revenues were estimated
      using the same assumptions used for computing liabilities for future
      policy benefits.

      Present Value of Future Profits  Included in insurance acquisition costs
      are amounts representing the present value of future profits on business
      in force of acquired insurance companies, which represent the portion of
      the costs to acquire such companies that is allocated to the value of
      the right to receive future cash flows from insurance contracts existing
      at the date of acquisition.

      These amounts are amortized with interest over the estimated remaining
      life of the acquired policies for annuities and universal life products
      and over the expected premium paying period for traditional life and
      health insurance products.

      Annuity Benefits Accumulated  Annuity receipts and benefit payments are
      recorded as increases or decreases in "annuity benefits accumulated"
      rather than as revenue and expense.  Increases in this liability for
      interest credited are charged to expense and decreases for surrender
      charges are credited to other income.

      Life, Accident and Health Reserves  Liabilities for future policy
      benefits under traditional life, accident and health policies are
      computed using the net level premium method.  Computations are based on
      anticipated investment yields, mortality, morbidity and surrenders and
      include provisions for unfavorable deviations.  Reserves are modified as
      necessary to reflect actual experience and developing trends.  

      The liability for future policy benefits for interest sensitive life
      policies is equal to the sum of the accumulated fund balances under such
      policies.
                                        7

                        AMERICAN ANNUITY GROUP, INC. 10-Q

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


      Assets Held In and Liabilities Related To Separate Accounts  Separate
      account assets and related liabilities represent variable annuity
      deposits. 

      Life, Accident and Health Premiums and Benefits  For traditional life,
      accident and health products, premiums are recognized as revenue when
      legally collectible from policyholders.  Policy reserves have been
      established in a manner which allocates policy benefits and expenses on
      a basis consistent with the recognition of related premiums and
      generally results in the recognition of profits over the premium-paying
      period of the policies.

      For interest-sensitive life and universal life products, premiums are
      recorded in a policyholder account which is reflected as a liability. 
      Revenue is recognized as amounts are assessed against the policyholder
      account for mortality coverage and contract expenses.  Surrender
      benefits reduce the account value.  Death benefits are expensed when
      incurred, net of the account value.

      Income Taxes  AAG and its principal subsidiary, Great American Life
      Insurance Company ("GALIC"), have separate tax allocation agreements
      with American Financial Corporation ("AFC"), a subsidiary of AFG, which
      designate how tax payments are shared by members of the tax group.  In
      general, both companies compute taxes on a separate return basis.  GALIC
      is obligated to make payments to (or receive benefits from) AFC based on
      taxable income without regard to temporary differences.  If GALIC's
      taxable income (computed on a statutory accounting basis) exceeds a
      current period net operating loss of AAG, the taxes payable by GALIC
      associated with the excess are payable to AFC.  If the AFC tax group
      utilizes any of AAG's net operating losses or deductions that originated
      prior to AAG's entering AFC's consolidated tax group, AFC will pay to
      AAG an amount equal to the benefit received.

      Deferred income tax assets and liabilities are determined based on
      differences between financial reporting and tax basis and are measured
      using enacted tax rates.  The Company recognizes deferred tax assets if
      it is more likely than not that a benefit will be realized.  Current and
      deferred tax assets and liabilities of companies in AFC's consolidated
      tax group are aggregated with other amounts receivable from or payable
      to affiliates.

      Stock-Based Compensation  As permitted under Statement of Financial
      Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
      Compensation", AAG accounts for stock options and other stock-based
      compensation plans using the intrinsic value based method prescribed
      by Accounting Principles Board Opinion No. 25, "Accounting for Stock
      Issued to Employees."

      Benefit Plans  AAG sponsors an Employee Stock Ownership Retirement
      Plan ("ESORP") covering all employees who are qualified as to age and
      length of service.  The ESORP, which invests primarily in securities
      of AAG, is a trusteed, noncontributory plan for the benefit of the
      employees of AAG and its subsidiaries.  Contributions are
      discretionary by the directors of AAG and are charged against
      earnings in the year for which they are declared.  Qualified
      employees having vested rights in the plan are entitled to benefit
      payments at age 60.

      AAG and certain of its subsidiaries provide certain benefits to eligible
      retirees.  The projected future cost of providing these benefits is
      expensed over the period the employees earn such benefits.

                                        8

                        AMERICAN ANNUITY GROUP, INC. 10-Q

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


      Start-Up Costs   Certain costs associated with introducing new products
      and distribution channels had been deferred by AAG and were being
      amortized on a straight-line basis over five years.  In 1999, AAG
      implemented Statement of Position ("SOP") 98-5, "Reporting on the Costs
      of Start-Up Activities".  The SOP requires that (i) costs of start-up
      activities be expensed as incurred and (ii) unamortized balances of
      previously deferred costs be expensed and reported as the cumulative
      effect of a change in accounting principle.  Accordingly, effective
      January 1, 1999, AAG expensed previously capitalized start-up costs
      of $4.7 million (net of tax) or $0.11 per diluted share, effective
      January 1, 1999.  

      Derivatives   The Financial Accounting Standards Board issued SFAS No.
      133, "Accounting for Derivative Instruments and Hedging Activities,"
      during the second quarter of 1998.  AAG must implement SFAS No. 133 by
      no later than January 1, 2000.  SFAS No. 133 establishes accounting and
      reporting standards for derivative instruments, including derivative
      instruments that are embedded in other contracts, and for hedging
      activities.  SFAS No. 133 requires the recognition in the balance sheet
      of all derivatives (both assets and liabilities) at fair value.  Changes
      in fair value of derivative instruments are included in current income
      or as a component of comprehensive income (outside current income)
      depending on the type of derivative.  Implementation of SFAS No. 133 is
      not expected to have a material effect on AAG's financial position or
      results of operations.

      Earnings Per Share  Basic earnings per share is calculated using the
      weighted-average number of shares of common stock outstanding during the
      period.  Diluted earnings per share include the effect of the assumed
      exercise of dilutive common stock options.   

      Comprehensive Income   Comprehensive income represents the total of net
      earnings plus other comprehensive income.  For AAG, other comprehensive
      income represents the change in net unrealized gain on marketable
      securities net of deferred taxes.  

      Statement of Cash Flows  For cash flow purposes, "investing
      activities" are defined as making and collecting loans and acquiring
      and disposing of debt or equity instruments and property and
      equipment.  "Financing activities" include annuity receipts, benefits
      and withdrawals and obtaining resources from owners and providing
      them with a return on their investments.  All other activities are
      considered "operating."  Short-term investments having original
      maturities of three months or less when purchased are considered to
      be cash equivalents for purposes of the financial statements.

   C. Acquisitions and Sale of Subsidiaries

      In February 1999, AAG acquired Old Republic Life Insurance Company of
      New York for approximately $27 million in cash.

      In September 1998, AAG sold its Funeral Services Division for
      approximately $165 million in cash realizing a $14.8 million after-tax
      gain. This division included American Memorial Life Insurance Company
      (acquired in 1995) and Arkansas National Life Insurance Company
      (acquired in 1998) and had assets of approximately $1 billion as of the
      sale date.                                                           
    
                                        9

                        AMERICAN ANNUITY GROUP, INC. 10-Q

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

                                                                          
   D. Segments of Operations

      AAG operates in three major segments:  (i) retirement products, (ii)
      life, accident and health insurance and (iii) corporate and other. 
      AAG's retirement product companies sell tax-deferred annuities to
      employees of primary and secondary educational institutions, hospitals
      and in the non-qualified markets.   More than one-fourth of AAG's
      retirement annuity premiums came from California in the first quarter of
      1999.  No other state accounted for more than 10% of premiums.  Sales
      from AAG's top two Managing General Agencies accounted for 12% and 4% of
      retirement annuity premiums in the first quarter of 1999.

      AAG's life, accident and health businesses sell various forms of life
      and supplemental health products in the United States and Puerto Rico. 
      Sales in Puerto Rico accounted for nearly one-half of AAG's life,
      accident and health premiums in the first quarter of 1999.

      Corporate and other consists primarily of AAG (parent), AAG Holding and,
      in 1998, the Funeral Services Division.

      In the first quarter of 1999, AAG implemented SFAS No. 131, "Disclosures
      about Segments of an Enterprise and Related Information."  SFAS No. 131
      requires segment information to be reported based on how management
      internally evaluates the operating performance of its business units. 
      Implementation of this standard had no impact on AAG's financial
      position or results of operations.

      The following tables (in millions) show AAG's revenues and operating
      profit (loss) by significant business segment.  Operating profit (loss)
      represents total revenues (excluding realized gains) less interest and
      operating expenses.

                                                                 
                                           Three months ended March 31,   
                                                  1999      1998 
         Revenues
           Retirement annuities                 $110.6    $107.8 
           Life, accident & health                33.4      30.6 
           Corporate and other                     5.2      38.6 
           Total operating revenues              149.2     177.0 
           Realized gains                          4.0      10.2 
           Equity in net earnings of affiliate     1.8       2.4 
           Total revenues per income statement  $155.0    $189.6 

         Operating profit (loss) - pretax                                    
           Retirement annuities                 $ 30.2    $ 24.7 
           Life, accident & health                 2.3       3.8 
           Corporate and other                    (5.8)     (3.0)
           Total pretax operating income          26.7      25.5 
           Realized gains                          4.0      10.2 
           Equity in net earnings of affiliate     1.8       2.4 
           Total pretax income per income
              statement                         $ 32.5    $ 38.1 

                                        10

                        AMERICAN ANNUITY GROUP, INC. 10-Q

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

    
   E. Investments

      "Investing activities" related to fixed maturity investments in AAG's
      Statement of Cash Flows, for the three months ending March 31, consisted
      of the following (in millions):

                                           Held to Available 
                                          Maturity  for Sale  Total  
         1999
         Purchases                          $   -   ($405.0) ($405.0) 
         Maturities and paydowns                -     203.0    203.0 
         Sales                                  -     163.8    163.8 

         1998
         Purchases                          $   -   ($285.7) ($285.7)
         Maturities and paydowns              75.0     82.4    157.4 
         Sales                                18.3*    79.4     97.7 

         * Sold at a gain of $0.4 million in the first quarter of 1998 due to
           significant deterioration of the issuers' creditworthiness.

      At March 31, 1999, AAG's fixed maturity portfolio was comprised of
      corporate bonds (57%), mortgage-backed securities (31%), public
      utilities (7%) and government securities (5%).

   F. Investment in Affiliate

      Investment in affiliate reflects AAG's 4% ownership (2.7 million shares;
      carrying value of $17.5 million at March 31, 1999) of the common stock
      of Chiquita Brands International which is accounted for under the equity
      method.  AFG and its other subsidiaries own an additional 33% interest
      in the common stock of Chiquita.  Chiquita is a leading international
      marketer, producer and distributor of bananas and other quality fresh
      and processed food products.

      The market value of AAG's investment in Chiquita was approximately $27
      million at March 31, 1999 and $26 million at December 31, 1998.    

      Included in equity in Chiquita's earnings for the first quarter of 1998
      is a $0.9 million gain attributable to Chiquita's issuance of common
      stock.

   G. Unamortized Insurance Acquisition Costs

      Unamortized insurance acquisition costs consisted of the following (in
      millions):
                                                March 31, December 31,
                                                   1999         1998 
         Deferred policy acquisition costs       $347.7       $320.1 
         Present value of future profits acquired  58.6         59.9 
         Unearned revenues                       (135.1)      (132.6)
                                                 $271.2       $247.4 


    
                                        11

                        AMERICAN ANNUITY GROUP, INC. 10-Q

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


   H. Notes Payable

      Notes payable consisted of the following (in millions):

                                                 March 31, December 31,
                                                     1999         1998 
           
           Direct obligations of AAG               $  1.2       $  1.2 
           Obligations of AAG Holding (guaranteed by AAG):
             6-7/8% Senior Notes due 2008           100.0        100.0 
             Bank Credit Line                        46.0         27.0 
           Other subsidiary debt                      2.7          2.8 
                Total                              $149.9       $131.0 

      AAG Holding has a $200 million revolving credit agreement with several
      banks.  Loans under the bank credit agreement mature from 2000 to 2003
      and bear interest at floating rates based on prime or Eurodollar.  At
      March 31, 1999, and December 31, 1998, the weighted-average interest
      rate on amounts borrowed under AAG Holding's bank credit line was 5.46%
      and 6.09%, respectively.
      
      In February 1998, AAG Holding borrowed $50 million under the credit line
      and retired its 11-1/8% Notes realizing a pretax extraordinary loss of
      $1.2 million.

      At March 31, 1999, AAG and its subsidiaries had no material amounts of
      scheduled principal payments due until final maturity of the bank credit
      line in 2003.

   I. Mandatorily Redeemable Preferred Securities of Subsidiary Trusts

      Wholly-owned subsidiary trusts of AAG Holding issued $225 million of
      preferred securities and, in turn, purchased a like amount of AAG
      Holding subordinated debt which provides interest and principal
      payments to fund the Trusts' obligations.  The preferred securities
      are mandatorily redeemable upon maturity or redemption of the
      subordinated debt.  The three preferred securities issues are
      summarized as follows:
                                                                   Optional
   Date of     Issue                                             Redemption
   Issuance    (Maturity Date)           3/31/99    12/31/98          Dates
   November 1996  9-1/4% TOPrS*      $74,600,000   $75,000,000   On or after
                  (2026)                                          11/7/2001
   March 1997    8-7/8% Preferred 
                   Securities (2027)  70,000,000    75,000,000    On or after
                                                                   3/1/2007
   May 1997       7-1/4% ROPES**
                  (2041)              75,000,000    75,000,000    Prior to      
                                                                9/28/2000 and  
                                                               after 9/28/2001

   *  Trust Originated Preferred Securities
   ** Remarketed Par Securities

     In the first quarter of 1999 AAG repurchased $5.4 million of its preferred 
     securities for $5.5 million in cash.

     AAG and AAG Holding effectively provide an unconditional guarantee of the  
     Trusts' obligations. 



                                        12

                        AMERICAN ANNUITY GROUP, INC. 10-Q

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


   J.      Stockholders' Equity

           The Company is authorized to issue 25,000,000 shares of Preferred
           Stock, par value $1.00 per share.  

           At March 31, 1999, there were 3.0 million shares of AAG Common Stock
           reserved for issuance under AAG's stock option plans.  Under the
           plans, the exercise price of each option equals the market price of
           AAG Common Stock at the date of grant.  Options generally become
           exercisable at the rate of 20% per year commencing one year after
           grant.  All options expire ten years after the date of grant.

           "Retained earnings since January 1, 1993" reflects
           accumulated changes in AAG's retained earnings since its
           acquisition of GALIC.

           The change in net unrealized gains on marketable securities for the
           three months ended March 31 included the following (in millions):

                                          1999          1998       
                              Pretax  Taxes    Net   Pretax  Taxes     Net 
   Unrealized holding
    gains (losses) on
    securities arising
    during the period          ($64.6) $21.8 ($42.8)  $5.9  ($2.0)   $3.9 
   Reclassification adjustment
    for investment
     gains realized in
     net income                  (4.0)   1.4   (2.6)  (1.8)   0.6    (1.2)
   Change in net unrealized
    gains on marketable
     securities                ($68.6) $23.2 ($45.4)  $4.1  ($1.4)   $2.7 

   K.      Earnings Per Share

           The number of common shares outstanding used in calculating diluted
           earnings per share in the first quarter of 1999 and 1998,
           respectively, includes 0.7 million shares for the effect of the
           assumed exercise of AAG's outstanding stock options.  

   L.      Contingencies

           The Company is continuing its clean-up activities at certain of its
           former manufacturing operations and third-party sites, in some cases
           in accordance with consent agreements with federal and state
           environmental agencies.  Changes in regulatory standards and further
           investigations could affect estimated costs in the future. 
           Management believes that reserves recorded are sufficient to satisfy
           the known liabilities and that the ultimate cost will not,
           individually, or in the aggregate, have a material adverse effect on
           the financial condition or results of operations of AAG.  AAG is
           actively pursuing recovery of a portion of the costs from the
           companies which provided insurance coverage for the former
           manufacturing operations.  No assurance can be given as to the
           ultimate amount which may be recovered.  



                                        13

                        AMERICAN ANNUITY GROUP, INC. 10-Q

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


   M.      Additional Information

           Statutory Information of Great American Life Insurance
           Company  Insurance companies are required to file financial
           statements with state insurance regulatory authorities
           prepared on an accounting basis prescribed or permitted by
           such authorities (statutory basis).  Certain statutory
           amounts for GALIC, AAG's primary insurance subsidiary, were
           as follows (in millions):

                                            March 31, December 31,
                                                1999         1998 
                Capital and surplus           $352.4       $350.4 
                Asset valuation reserve         67.2         62.6 
                Interest maintenance reserve    20.8         20.6 

                                          Three months ended March 31,
                                                1999         1998 
                Pretax income from operations  $11.1        $20.1 
                Net income from operations       8.3         16.2 
                Net income                       8.4         16.0 

   The amount of dividends which can be paid by GALIC without prior approval of
   regulatory authorities is subject to restrictions relating to capital and
   surplus and statutory net income.  Based on net income for the year ended
   December 31, 1998, GALIC may pay $35.6 million in dividends in 1999 without
   prior approval.

                                       14 

                        AMERICAN ANNUITY GROUP, INC. 10-Q

                       Management's Discussion and Analysis
                 of Financial Condition and Results of Operations


   GENERAL

   American Annuity Group, Inc. ("AAG" or "the Company") and its subsidiary,
   AAG Holding Company, Inc., are organized as holding companies with nearly
   all of their operations being conducted by their subsidiaries.  These
   companies, however, have continuing expenditures for administrative
   expenses, corporate services, satisfaction of liabilities in connection with
   discontinued operations and for the payment of interest and principal on
   borrowings and stockholder dividends.

   Uncertainties
            Year 2000 Status   AAG's Year 2000 Project is a corporate-wide
   program designed to ensure that its computer hardware and software systems,
   telecommunications and other business activities function properly in the
   Year 2000.  The project also encompasses communicating with agents, vendors,
   financial institutions and others with which the Company conducts business
   to determine their Year 2000 readiness and resulting effects on AAG.  As
   part of the project, the Company is also developing contingency plans for
   the systems and procedures deemed most critical to the Company.  AAG's Year
   2000 Project is being coordinated by a team of individuals from a variety of
   disciplines in the organization which monitors the work being performed by
   the various business units and reports frequently to senior management.  The
   Company's internal audit staff reports at least quarterly to the Audit
   Committee of the Board of Directors on the Company's Year 2000 progress.

   To address its Year 2000 issue, AAG's operations have been divided into
   separate systems groups.  At March 31, 1999, these groups were in the
   process of either (i) testing internally developed and third party software
   applications believed to be Year 2000 compliant without need for any
   modifications; (ii) modifying and testing other software applications or
   (iii) replacing software with new applications that are Year 2000 compliant,
   and testing those replacements for operational acceptance and Year 2000
   compliance.  

   Approximately 40% of the operating units are currently on target with their
   internal plans to be complete in the second quarter of 1999.  Approximately
   60% of the operating units have experienced some delay and their overall
   projects are running behind schedule on internally established timelines. 
   Substantially all of these systems have been remediated and testing is
   expected to be completed in the third quarter of 1999.  

   Contingency plans provide a documented order of actions necessary to keep
   the Company's business functions operating and mitigate the extent of any
   potential disruptions.  The Company expects to complete its contingency
   planning process for all mission critical software applications and
   operational processes in the second quarter of 1999, and for less
   significant software applications and operational processes in the third
   quarter of 1999.  These plans will be tested through the balance of the
   year.  

   Many of the systems being replaced were planned replacements, which were
   accelerated due to Year 2000 considerations.  A significant portion of AAG's
   Year 2000 Project is being completed using internal staff.  Therefore, cost
   estimates for the Year 2000 Project do not represent solely incremental
   costs.  Since the beginning of 1997, AAG has incurred an estimated $17
   million in Year 2000 costs, including 

                                        15

                        AMERICAN ANNUITY GROUP, INC. 10-Q

                       Management's Discussion and Analysis
           of Financial Condition and Results of Operations - Continued


   capitalized costs of $12 million for new systems; the Company expensed $3.5
   million in Year 2000 costs in 1998 and $1.7 million in the first quarter of
   1999.  AAG estimates it will spend an additional $6 million in connection
   with the Year 2000 Project during the remainder of 1999, of which $4 million
   is expected to be expensed.  Projected Year 2000 costs and completion dates
   are based on management's best estimates.  There can be no assurance that
   these estimates will be achieved.

   AAG believes it has reasonable plans in place to ensure business activities
   function properly in the Year 2000.  However, should software modifications
   and new software installations not be completed on a timely basis, the
   resulting disruptions could have a material adverse impact on operations. 
   AAG's operations could also be materially adversely affected by the
   inability of third parties such as agents, vendors and policyholders'
   employers to also function properly in the Year 2000.

   Forward-Looking Statements   The Private Securities Litigation Reform Act of
   1995 encourages corporations to provide investors with information about the
   Company's anticipated performance and provides protection from liability if
   future results are not the same as management's expectations.  This document
   contains certain forward-looking statements that are based on assumptions
   which management believes are reasonable, but, by their nature, inherently
   uncertain.  Future results could differ materially from those projected. 
   Factors that could cause such differences include, but are not limited to: 
   changes in economic conditions, regulatory actions, the Year 2000 issue and
   competitive pressures.  AAG undertakes no obligation to update any forward-
   looking statements.  

   LIQUIDITY AND CAPITAL RESOURCES  

   Ratios   AAG's earnings to fixed charges continue to exceed 5 times; its
   consolidated debt to capital ratio remains under 25%.  Consolidated debt
   includes the Company's notes payable and its Remarketed Par Securities
   ("ROPES").  Capital represents the sum of consolidated debt, redeemable
   preferred securities of subsidiary trusts and stockholders' equity
   (excluding unrealized gains on fixed maturity investments).

   AAG's proforma consolidated debt to capital ratio remains well under 20%. 
   Proforma amounts assume unrestricted cash and marketable investments on hand
   at AAG (parent) have been used to reduce consolidated debt.

   The National Association of Insurance Commissioners' ("NAIC") risk-based
   capital ("RBC") formulas determine the amount of capital that an insurance
   company needs to ensure that it has an acceptable expectation of not
   becoming financially impaired.  At March 31, 1999, the capital ratios of
   each of AAG's principal insurance subsidiaries was at least 4.8 times its
   authorized control level RBC. 

                                        16


                        AMERICAN ANNUITY GROUP, INC. 10-Q

                       Management's Discussion and Analysis
           of Financial Condition and Results of Operations - Continued


   Sources and Uses of Funds   To pay interest and principal on borrowings,
   obligations related to discontinued manufacturing operations and other
   holding company costs AAG (parent) and AAG Holding use cash and investments
   on hand as well as capital distributions from their principal subsidiary,
   Great American Life Insurance Company ("GALIC").  At March 31, 1999, AAG
   (parent) had nearly $100 million of cash and investments on hand. The amount
   of capital distributions which can be paid by GALIC is subject to
   restrictions relating to statutory surplus and earnings.  The maximum amount
   of dividends payable by GALIC during the remainder of 1999 without prior
   regulatory approval is $35.6 million.  

   In the first quarter of 1999, AAG repurchased $5 million of its preferred
   securities and $4 million of Common Stock using cash on hand and bank
   borrowings.

   Including cash and investments on hand and the unused availability under a
   bank line of credit, AAG and AAG Holding had approximately $250 million of
   liquidity at March 31, 1999.  Based upon the current level of operations and
   anticipated growth, AAG believes that it will have sufficient resources to
   meet its liquidity requirements.

   Investments   Insurance laws restrict the types and amounts of investments
   which are permissible for life insurers.  These restrictions are designed to
   ensure the safety and liquidity of insurers' investment portfolios.  The
   NAIC has developed a model investment law which management believes will not
   have a material impact on AAG's operations.

   AAG invests primarily in fixed income investments which, including loans and
   short-term investments, comprised 98% of its investment portfolio at March
   31, 1999.  AAG generally invests in securities with intermediate-term
   maturities with an objective of optimizing interest yields while maintaining
   an appropriate relationship of maturities between AAG's assets and expected
   liabilities.

   At March 31, 1999, AAG's mortgage-backed securities ("MBSs") portfolio
   represented less than one-third of its fixed maturity investments.  AAG
   invests primarily in MBSs which have a lower risk of prepayment.  In
   addition, the majority of MBSs held by AAG were purchased at a discount. 
   Management believes that the structure and discounted nature of the MBSs
   will reduce the effect of prepayments on earnings over the anticipated life
   of the MBS portfolio.

   Nearly 90% of AAG's MBSs are rated "AAA" with substantially all being
   investment grade quality.  The market in which these securities trade is
   highly liquid.  Aside from interest rate risk, AAG does not believe a
   material risk (relative to earnings or liquidity) is inherent in holding
   such investments.

   The NAIC assigns quality ratings to publicly traded as well as privately
   placed securities.  At March 31, 1999, 92% of AAG's fixed maturity portfolio
   was comprised of investment grade bonds (NAIC rating of "1" or "2"). 
   Management believes that the high credit quality of AAG's investment
   portfolio should generate a stable and predictable investment return.



                                        17

                        AMERICAN ANNUITY GROUP, INC. 10-Q

                       Management's Discussion and Analysis
           of Financial Condition and Results of Operations - Continued


   RESULTS OF OPERATIONS

   General  In September 1998, AAG sold its Funeral Services Division. 
   Accordingly, certain 1999 income statement components are not comparable to
   1998.  

   Pretax earnings from operations (before realized gains, equity in results of
   affiliate, extraordinary item and accounting change) for the first quarter
   of 1999 and 1998 were $26.7 million and $25.5 million, respectively.  On a
   diluted basis, net earnings from operations (before realized gains, equity
   in earnings of affiliate, extraordinary item and accounting change) for the
   same periods were $0.43 per share and $0.40 per share, respectively.

   Retirement Products    The following table summarizes AAG's premiums for its
   retirement annuities (in millions).
                                                     Three months ended
                                                         March 31,             
                                                         1999    1998           
    Retirement Annuity Premiums:
        Single premium deferred annuities               $ 52    $ 52 
        Flexible premium deferred annuities               41      45         
        Variable annuities - single premium               35      13 
        Variable annuities - flexible premium             12       4 
          Total                                         $140    $114 
    
   Management believes that the performance of the stock market and the recent
   interest rate environment have resulted in decreased sales and persistency
   of traditional fixed annuities.  Sales of annuity products linked to the
   performance of the stock market (equity-indexed and variable annuities)
   helped offset this decrease.

   Life, Accident and Health Premiums   The following table summarizes AAG's
   life, accident and health premiums as shown in the Consolidated Income
   Statement (in millions).

     Life, Accident and Health Premiums:                1999    1998         
        Life insurance (excluding Funeral
         Services Division)                              $18     $17         
        Accident and health insurance                      8       6         
                                                          26      23         
        Funeral Services Division                          -      24         
                                                         $26     $47 

   Net Investment Income   Net investment income decreased 6% in 1999 from the
   comparable three month period in 1998 resulting primarily from less invested
   assets due to the sale of the Funeral Services Division.  

   Realized Gains   Individual securities are sold from time to time as market
   opportunities appear to present optimal situations under AAG's investment
   strategies.

                                        18


                        AMERICAN ANNUITY GROUP, INC. 10-Q

                       Management's Discussion and Analysis
           of Financial Condition and Results of Operations - Continued


   Equity in Net Earnings of Affiliate   Equity in net earnings of affiliate
   represents AAG's proportionate share of the results of Chiquita Brands
   International.  Chiquita reported net income for the first quarter of 1999
   and 1998 of $49 million and $41 million, respectively.  Included in equity
   in Chiquita's first quarter 1998 earnings is a gain attributable to
   Chiquita's issuance of common stock.    

   Annuity Benefits   Annuity benefits reflect amounts accrued on annuity
   policyholders' funds accumulated.  The majority of AAG's fixed rate annuity
   products permit AAG to change the crediting rate at any time (subject to
   minimum interest rate guarantees of 3% or 4% per annum).  As a result,
   management has been able to react to changes in market interest rates and
   maintain a desired interest rate spread.   

   On its deferred annuities (annuities in the accumulation phase), AAG
   generally credits interest to policyholders' accounts at their current
   stated "surrender" interest rates.  Furthermore, for "two-tier" deferred
   annuities (annuities under which a higher interest amount can be earned if a
   policy is annuitized rather than surrendered), AAG accrues an additional
   liability to provide for expected deaths and annuitizations.  Changes in
   crediting rates, actual surrender and annuitization experience or
   modifications in actuarial assumptions can affect this accrual.

   On immediate annuities (annuities in the pay-out phase), interest is
   credited based on discount rates used at the time the policies are
   annuitized.  Discount rates are generally based on interest rates in effect
   at annuitization.

   Annuity benefits decreased 9% in the first quarter of 1999 compared to the
   same period in 1998 due primarily to (i) decreases in crediting rates, (ii)
   changes in actuarial assumptions, (iii) the sale of the Funeral Services
   Division and (iv) decreased sales and persistency of fixed annuities.  
     
   Insurance Acquisition Expenses   Insurance acquisition expenses include
   amortization of deferred acquisition costs ("DAC") as well as certain
   marketing expenses and commissions on sales of life insurance products. 
   Insurance acquisition expenses also include amortization of the present
   value of future profits of businesses acquired.  The decrease in the first
   quarter of 1999 compared to the same period in 1998 reflects primarily the
   sale of the Funeral Services Division.  

   Preferred Distributions and Interest Expenses   Trust preferred distribution
   requirements and interest and other debt expenses decreased 3% in the first
   quarter of 1999 compared to the same period in 1998 due primarily to lower
   preferred amounts and average borrowings outstanding.

   Other Expenses   Increases in other expenses reflect (i) higher depreciation
   and amortization expenses and (ii) operating expenses of relatively recent
   start-up activities.  AAG had previously deferred such operating expenses
   (see "Accounting Change" below).

   Extraordinary Item   Extraordinary item reflects AAG's losses, net of tax,
   on retirements of its debt.

                                       19 




                        AMERICAN ANNUITY GROUP, INC. 10-Q

                       Management's Discussion and Analysis
           of Financial Condition and Results of Operations - Continued


   Accounting Change   In the first quarter of 1999, AAG implemented Statement
   of Position ("SOP") 98-5, "Reporting on the Costs of Start-Up Activities." 
   The SOP requires that costs of start-up activities be expensed as incurred
   and that unamortized balances of previously deferred costs be expensed and
   reported as the cumulative effect of a change in accounting principle. 
   Accordingly, AAG expensed previously capitalized start-up costs of $4.7
   million (net of tax) in the first quarter of 1999. 







                                      ITEM 3

            Qualitative and Quantitative Disclosure About Market Risk

   As of March 31, 1999, there were no material changes to the information
   provided in AAG's Form 10-K for 1998 under the caption "Exposure to Market
   Risk" in Management's Discussion and Analysis of Financial Condition and
   Results of Operations.


                                        20

                        AMERICAN ANNUITY GROUP, INC. 10-Q
                                     PART II
                                OTHER INFORMATION




                                      ITEM 1

                                Legal Proceedings

   In January 1999, GALIC was named a defendant in a purported class action
   lawsuit (Woodward v. Great American Life Insurance Company, Hamilton County
   Court of Common Pleas, Case No.  A9900587, filed February 2, 1999).  The
   complaint seeks unspecified damages based on alleged (i) failure of GALIC to
   allow the tax-free transfer of the annuity value of certain annuities to
   other product providers, and (ii) misleading disclosures concerning GALIC's
   interest crediting practices.  The Company has not completed its review of
   the complaint but believes it has meritorious defenses.  However, it is too
   early to predict the ultimate outcome of this action and its impact on the
   Company.





                                      ITEM 6

                         Exhibits and Reports on Form 8-K

   (a)   Exhibit 27 - Financial Data Schedule as of March 31, 1999.  For
         submission in electronic filing only.

   (b)   Report on Form 8-K - None

               







                                    Signature


   Pursuant to the requirements of the Securities Exchange Act of 1934, the
   Registrant has duly caused this report to be signed on its behalf by the
   undersigned duly authorized.

                                      American Annuity Group, Inc.


   May 14, 1999                       BY:/s/William J. Maney             
                                         William J. Maney
                                         Senior Vice President, Treasurer
                                          and Chief Financial Officer

                                        21