-------------------------------------------------------------------------------
                       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, 2001                                             No. 1-7361



                         AMERICAN FINANCIAL CORPORATION




Incorporated under                                         IRS Employer I.D.
the Laws of Ohio                                           No. 31-0624874


                 One East Fourth Street, Cincinnati, Ohio 45202
                                 (513) 579-2121






     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, 2001, there were 10,593,000 shares of the Registrant's Common
Stock outstanding, all of which were owned by American Financial Group, Inc.










                                  Page 1 of 19
-------------------------------------------------------------------------------

<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q
                                     PART I
                              FINANCIAL INFORMATION

                 AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                             (Dollars In Thousands)
<TABLE>
<CAPTION>

                                                                        March 31,       December 31,
                                                                            2001               2000
                                                                    ------------        -----------
<S>                                                                 <C>                <C>
Assets:
  Cash and short-term investments                                    $   210,562        $   437,263
  Investments:
    Fixed maturities - at market
      (amortized cost - $10,355,140 and $10,148,248)                  10,526,540         10,164,648
    Other stocks - at market
      (cost - $175,708 and $174,959)                                     308,208            385,359
    Investment in investee corporations                                   23,996             23,996
    Policy loans                                                         212,005            213,469
    Real estate and other investments                                    249,485            270,250
                                                                     -----------        -----------
        Total investments                                             11,320,234         11,057,722

  Recoverables from reinsurers and prepaid
    reinsurance premiums                                               1,940,462          1,845,171
  Agents' balances and premiums receivable                               706,746            700,215
  Deferred acquisition costs                                             782,939            763,097
  Other receivables                                                      253,431            239,806
  Variable annuity assets (separate accounts)                            472,902            533,655
  Prepaid expenses, deferred charges and other assets                    484,025            508,163
  Cost in excess of net assets acquired                                  328,033            322,380
                                                                     -----------        -----------

                                                                     $16,499,334        $16,407,472
                                                                     ===========        ===========

Liabilities and Capital:
  Unpaid losses and loss adjustment expenses                         $ 4,504,618        $ 4,515,561
  Unearned premiums                                                    1,482,400          1,414,492
  Annuity benefits accumulated                                         5,549,650          5,543,683
  Life, accident and health reserves                                     598,133            599,360
  Payable to American Financial Group, Inc.                              424,706            439,371
  Long-term debt:
    Holding companies                                                    186,401            204,338
    Subsidiaries                                                         192,492            195,087
  Variable annuity liabilities (separate accounts)                       472,902            533,655
  Accounts payable, accrued expenses and other
    liabilities                                                        1,057,422            998,104
                                                                     -----------        -----------
        Total liabilities                                             14,468,724         14,443,651

  Minority interest                                                      522,191            509,705

  Shareholders' Equity:
    Preferred Stock - at liquidation value                                72,154             72,154
    Common Stock, no par value
      - 20,000,000 shares authorized
      - 10,593,000 shares outstanding                                      9,625              9,625
    Capital surplus                                                      977,659            974,766
    Retained earnings                                                    275,381            258,371
    Unrealized gain on marketable securities, net                        173,600            139,200
                                                                     -----------        -----------
        Total shareholders' equity                                     1,508,419          1,454,116
                                                                     -----------        -----------

                                                                     $16,499,334        $16,407,472
                                                                     ===========        ===========
</TABLE>


                                        2
<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

                 AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENT OF EARNINGS
                      (In Thousands, Except Per Share Data)


                                                          Three months ended
                                                              March 31,
                                                       -----------------------
                                                           2001           2000
                                                           ----           ----
Income:
   Property and casualty insurance premiums            $644,723       $572,137
   Life, accident and health premiums                    69,158         49,919
   Investment income                                    209,790        209,015
   Realized losses on sales of:
     Securities                                          (6,881)        (1,433)
     Subsidiaries                                        (1,586)          -
   Other income                                          58,292         54,627
                                                       --------       --------
                                                        973,496        884,265

Costs and Expenses:
   Property and casualty insurance:
     Losses and loss adjustment expenses                496,216        417,651
     Commissions and other underwriting expenses        184,974        178,432
   Annuity benefits                                      69,264         66,161
   Life, accident and health benefits                    54,083         36,724
   Interest charges on borrowed money                    18,873         15,554
   Other operating and general expenses                 107,871         96,106
                                                       --------       --------
                                                        931,281        810,628
                                                       --------       --------

Operating earnings before income taxes                   42,215         73,637
Provision for income taxes                               14,952         24,255
                                                       --------       --------

Net operating earnings                                   27,263         49,382

Minority interest expense, net of tax                    (6,919)        (8,207)
Equity in net earnings (losses) of investees,
   net of tax                                            (3,334)         7,175
                                                       --------       --------

Net Earnings                                           $ 17,010       $ 48,350
                                                       ========       ========








                                        3
<PAGE>

                       AMERICAN FINANCIAL CORPORATION 10-Q

                 AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                     Common Stock                    Unrealized
                                        Preferred     and Capital    Retained       Gain (Loss)
                                            Stock         Surplus    Earnings     on Securities           Total
                                        ---------    ------------    --------     -------------      ----------
<S>                                      <C>            <C>         <C>               <C>           <C>
Balance at January 1, 2001                $72,154        $984,391    $258,371          $139,200      $1,454,116

 Net earnings                                -               -         17,010              -             17,010
 Change in unrealized                        -               -           -               34,400          34,400
                                                                                                     ----------
   Comprehensive income                                                                                  51,410

 Capital contribution from parent            -              3,067        -                 -              3,067
 Other                                       -               (174)       -                 -               (174)
                                          -------        --------    --------          --------      ----------

Balance at March 31, 2001                 $72,154        $987,284    $275,381          $173,600      $1,508,419
                                          =======        ========    ========          ========      ==========




Balance at January 1, 2000                $72,154        $970,407    $296,246          ($14,700)     $1,324,107

 Net earnings                                -               -         48,350              -             48,350
 Change in unrealized                        -               -           -              (22,600)        (22,600)
                                                                                                     ----------
   Comprehensive income                                                                                  25,750

 Capital contribution from parent            -              3,067        -                 -              3,067
 Other                                       -                 47        -                 -                 47
                                          -------        --------    --------          -------       ----------

Balance at March 31, 2000                 $72,154        $973,521    $344,596          ($37,300)     $1,352,971
                                          =======        ========    ========           =======      ==========
</TABLE>





















                                        4


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

                 AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                       Three months ended
                                                                          March 31,
                                                                    -----------------------
                                                                        2001           2000
                                                                        ----           ----
<S>                                                                <C>            <C>
Operating Activities:
   Net earnings                                                     $ 17,010       $ 48,350
   Adjustments:
     Equity in net (earnings) losses of investees                      3,334         (7,175)
     Depreciation and amortization                                    36,485         30,498
     Annuity benefits                                                 69,264         66,161
     Changes in reserves on assets                                     4,637          1,088
     Realized gains on investing activities                           (6,840)        (7,611)
     Deferred annuity and life policy acquisition costs              (35,551)       (33,668)
     Decrease in reinsurance and other receivables                        90        124,640
     Decrease (increase) in other assets                             (19,369)        13,710
     Increase (decrease) in insurance claims and reserves             74,616        (50,957)
     Increase in other liabilities                                    38,419          2,454
     Increase (decrease) in minority interest                          4,095           (285)
     Other, net                                                         (434)        (3,481)
                                                                    --------       --------
                                                                     185,756        183,724
                                                                    --------       --------
Investing Activities:
   Purchases of and additional investments in:
     Fixed maturity investments                                     (544,186)      (601,115)
     Equity securities                                                (2,571)       (14,786)
     Real estate, property and equipment                             (13,278)       (18,935)
   Maturities and redemptions of fixed maturity
     investments                                                     131,547        154,704
   Sales of:
     Fixed maturity investments                                      194,182        227,797
     Equity securities                                                 4,679         19,265
     Subsidiaries                                                     22,000           -
     Real estate, property and equipment                              24,562          1,504
   Cash and short-term investments of former
     subsidiaries                                                   (132,858)          -
   Decrease (increase) in other investments                             (673)         5,486
                                                                    --------       --------
                                                                    (316,596)      (226,080)
                                                                    --------       --------
Financing Activities:
   Fixed annuity receipts                                            126,223        126,416
   Annuity surrenders, benefits and withdrawals                     (186,921)      (192,820)
   Net transfers from (to) variable annuity assets                     2,929        (21,453)
   Additional long-term borrowings                                    26,842         44,091
   Reductions of long-term debt                                      (47,601)          (610)
   Borrowings from AFG                                                 1,000           -
   Payments to AFG                                                   (23,000)       (20,313)
   Capital Contribution                                                4,667          4,667
   Repurchases of trust preferred securities                            -            (1,261)
                                                                    --------       --------
                                                                     (95,861)       (61,283)
                                                                    --------       --------

Net Decrease in Cash and Short-term Investments                     (226,701)      (103,639)

Cash and short-term investments at beginning
   of period                                                         437,263        389,018
                                                                    --------       --------

Cash and short-term investments at end of period                    $210,562       $285,379
                                                                    ========       ========
</TABLE>



                                        5


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


A.   ACCOUNTING POLICIES

     BASIS OF PRESENTATION The accompanying consolidated financial statements
     for American Financial Corporation ("AFC") and subsidiaries are unaudited;
     however, 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.

     Certain reclassifications have been made to prior years to conform to the
     current year's presentation. All significant intercompany balances and
     transactions have been eliminated. All acquisitions have been treated as
     purchases. The results of operations of companies since their formation or
     acquisition are included in the consolidated financial statements.

     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 considered "available for
     sale" and reported at fair value with unrealized gains and losses reported
     as a separate component of shareholders' equity. Short-term investments are
     carried at cost; loans receivable are carried primarily 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 INVESTEE CORPORATIONS Investments in securities of 20%- to
     50%-owned companies are generally carried at cost, adjusted for AFC's
     proportionate share of their undistributed earnings or losses.

     Due to Chiquita's announced intention to pursue a plan to restructure its
     public debt, AFC wrote down its investment in Chiquita common stock to
     market value at December 31, 2000, and may suspend accounting for Chiquita
     under the equity method pending resolution of the current uncertainty.

     COST IN EXCESS OF NET ASSETS ACQUIRED The excess of cost of subsidiaries
     and investees over AFC's equity in the underlying net assets ("goodwill")
     is being amortized over periods of 20 to 40 years. In February 2001, the
     Financial Accounting Standards Board issued a proposal to eliminate the
     amortization of goodwill and require that goodwill be tested for
     impairment.

     INSURANCE As discussed under "Reinsurance" below, unpaid losses and loss
     adjustment expenses and unearned premiums have not been reduced for
     reinsurance recoverable. To the extent that unrealized gains (losses) from
     securities classified as "available for sale" would result in adjustments
     to deferred acquisition costs and policyholder liabilities had those gains
     (losses) actually been realized, such balance sheet amounts are adjusted,
     net of deferred taxes.
                                        6


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


          REINSURANCE In the normal course of business, AFC's insurance
     subsidiaries cede reinsurance to other companies to diversify risk and
     limit maximum loss arising from large claims. To the extent that any
     reinsuring companies are unable to meet obligations under the agreements
     covering reinsurance ceded, AFC's insurance subsidiaries would remain
     liable. Amounts recoverable from reinsurers are estimated in a manner
     consistent with the claim liability associated with the reinsured policies.
     AFC's insurance subsidiaries report as assets (a) the estimated reinsurance
     recoverable on unpaid losses, including an estimate for losses incurred but
     not reported, and (b) amounts paid to reinsurers applicable to the
     unexpired terms of policies in force. AFC's insurance subsidiaries also
     assume reinsurance from other companies. Income on reinsurance assumed is
     recognized based on reports received from ceding reinsurers.

          DEFERRED ACQUISITION COSTS Policy acquisition costs (principally
     commissions, premium taxes and other underwriting expenses) related to the
     production of new business are deferred ("DPAC"). For the property and
     casualty companies, DPAC is limited based upon recoverability without any
     consideration for anticipated investment income and is charged against
     income ratably over the terms of the related policies. 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. 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.

          UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES The net liabilities stated
     for unpaid claims and for expenses of investigation and adjustment of
     unpaid claims are based upon (a) the accumulation of case estimates for
     losses reported prior to the close of the accounting period on the direct
     business written; (b) estimates received from ceding reinsurers and
     insurance pools and associations; (c) estimates of unreported losses based
     on past experience; (d) estimates based on experience of expenses for
     investigating and adjusting claims and (e) the current state of the law and
     coverage litigation. These liabilities are subject to the impact of changes
     in claim amounts and frequency and other factors. In spite of the
     variability inherent in such estimates, management believes that the
     liabilities for unpaid losses and loss adjustment expenses are adequate.
     Changes in estimates of the liabilities for losses and loss adjustment
     expenses are reflected in the Statement of Earnings in the period in which
     determined.

          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 yield, mortality, morbidity and surrenders and include
     provisions for unfavorable deviations. Reserves established for accident
     and health claims are modified as necessary to reflect actual experience
     and developing trends.





                                        7


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


          VARIABLE ANNUITY ASSETS AND LIABILITIES Separate accounts related to
     variable annuities represent deposits invested in underlying investment
     funds on which Great American Financial Resources, Inc. ("GAFRI"), an
     83%-owned subsidiary, earns a fee. The investment funds are selected and
     may be changed only by the policyholder.

          PREMIUM RECOGNITION Property and casualty premiums are earned over the
     terms of the policies on a pro rata basis. Unearned premiums represent that
     portion of premiums written which is applicable to the unexpired terms of
     policies in force. On reinsurance assumed from other insurance companies or
     written through various underwriting organizations, unearned premiums are
     based on reports received from such companies and organizations. For
     traditional life, accident and health products, premiums are recognized as
     revenue when legally collectible from policyholders. 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.

          POLICYHOLDER DIVIDENDS Dividends payable to policyholders are included
     in "Accounts payable, accrued expenses and other liabilities" and represent
     estimates of amounts payable on participating policies which share in
     favorable underwriting results. The estimate is accrued during the period
     in which the related premium is earned. Changes in estimates are included
     in income in the period determined. Policyholder dividends do not become
     legal liabilities unless and until declared by the boards of directors of
     the insurance companies.

     MINORITY INTEREST For balance sheet purposes, minority interest represents
     (i) the interests of noncontrolling shareholders in AFC subsidiaries,
     including preferred securities issued by trust subsidiaries of GAFRI and
     (ii) American Financial Group, Inc.'s ("AFG") direct ownership interest in
     American Premier Underwriters, Inc. ("American Premier" or "APU") and
     American Financial Enterprises, Inc. For income statement purposes,
     minority interest expense represents those shareholders' interest in the
     earnings of AFC subsidiaries as well as accrued distributions on the trust
     preferred securities.

     INCOME TAXES AFC files consolidated federal income tax returns which
     include all 80%-owned U.S. subsidiaries, except for certain life insurance
     subsidiaries and their subsidiaries. Deferred income taxes are calculated
     using the liability method. Under this method, deferred income tax assets
     and liabilities are determined based on differences between financial
     reporting and tax bases and are measured using enacted tax rates. Deferred
     tax assets are recognized if it is more likely than not that a benefit will
     be realized.

     BENEFIT PLANS AFC provides retirement benefits to qualified employees of
     participating companies through contributory and noncontributory defined
     contribution plans contained in AFG's Retirement and Savings Plan. Under
     the retirement portion of the plan, company contributions are invested
     primarily in securities of AFG and affiliates. Under the savings portion of
     the plan, AFC matches a specific portion of employee contributions.
     Contributions to benefit plans are charged against earnings in the year for
     which they are declared.

     AFC and many of its subsidiaries provide health care and life insurance
     benefits to eligible retirees. AFC also provides postemployment benefits to
     former or inactive employees (primarily those on disability) who were not
     deemed retired under other company plans. The projected future cost of
     providing these benefits is expensed over the period the employees earn
     such benefits.

                                        8


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


     DERIVATIVES Effective October 1, 2000, AFC implemented Statement of
     Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
     Instruments and Hedging Activities", which establishes accounting and
     reporting standards for derivative instruments (including derivative
     instruments that are embedded in other contracts) and for hedging
     activities. Prior year financial statements were not restated. SFAS No. 133
     generally requires that derivatives (both assets and liabilities) be
     recognized in the balance sheet at fair value with changes in fair value
     included in current earnings.

     Derivatives included in AFC's Balance Sheet consist primarily of
     investments in common stock warrants (included in other stocks), the
     equity-based component of certain annuity products (included in annuity
     benefits accumulated) and call options (included in other investments) used
     to mitigate the risk embedded in the equity-indexed annuity products.

     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 obtaining resources from owners and providing them with a return on
     their investments, borrowing money and repaying amounts borrowed. Annuity
     receipts, benefits and withdrawals are also reflected as financing
     activities. 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.

B.   SALE OF SUBSIDIARIES

     JAPANESE DIVISION In December 2000, AFC agreed to sell its Japanese
     property and casualty division to Mitsui Marine & Fire Insurance Company of
     America for approximately $22 million in cash and recorded a $10.7 million
     pretax loss on the sale. Upon completion of the sale in March 2001, AFC
     realized an additional pretax loss of $1.6 million and deferred a gain of
     approximately $21 million on ceded insurance which is being recognized over
     the estimated settlement period (weighted average of 4 years) of the ceded
     claims. At the same time, a reinsurance agreement under which Great
     American Insurance ceded a portion of its pool of insurance to Mitsui was
     terminated. The Japanese division generated net written premiums of
     approximately $60 million per year to Great American while Great American
     ceded approximately $45 million per year to Mitsui.

C.   SEGMENTS OF OPERATIONS AFC's property and casualty group is engaged
     primarily in private passenger automobile and specialty insurance
     businesses. The Personal group writes nonstandard and preferred/standard
     private passenger auto and other personal insurance coverage. The Specialty
     group includes a highly diversified group of specialty business units. Some
     of the more significant areas are inland and ocean marine, California
     workers' compensation, agricultural-related coverages, executive and
     professional liability, fidelity and surety bonds, collateral protection,
     and umbrella and excess coverages. AFC's annuity and life business markets
     primarily retirement products as well as life and supplemental health
     insurance. In addition, AFC owns a significant portion of the voting equity
     securities of Chiquita Brands International, Inc. (an investee corporation
     - see Note D).






                                        9


<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


     The following table (in thousands) shows AFC's revenues and operating
     profit (loss) by significant business segment. Operating profit (loss)
     represents total revenues less operating expenses.

                                                          Three months ended
                                                                March 31,
                                                         ---------------------
                                                             2001         2000
                                                             ----         ----
        Revenues (a)
        Property and casualty insurance:
          Premiums earned:
            Personal                                     $327,632     $297,313
            Specialty                                     316,307      274,823
            Other lines - primarily discontinued              784            1
                                                         --------     --------
                                                          644,723      572,137
          Investment and other income                     107,335      121,167
                                                         --------     --------
                                                          752,058      693,304
        Annuities and life (b)                            217,030      187,337
        Other                                               4,408        3,624
                                                         --------     --------
                                                         $973,496     $884,265
                                                         ========     ========

        Operating Profit (Loss)
        Property and casualty insurance:
          Underwriting:
            Personal                                    ($ 27,782)    ($10,933)
            Specialty                                      (2,230)     (10,498)
            Other lines - primarily discontinued           (6,455)      (2,515)
                                                         --------     --------
                                                          (36,467)     (23,946)
          Investment and other income                      75,202       84,525
                                                         --------     --------
                                                           38,735       60,579
        Annuities and life                                 30,123       27,514
        Other (c)                                         (26,643)     (14,456)
                                                         --------     --------
                                                         $ 42,215     $ 73,637
                                                         ========     ========

        (a)  Revenues include sales of products and services as well as other
             income earned by the respective segments.
        (b)  Represents primarily investment income.
        (c)  Includes holding company expenses.

D.   Investee Corporations Investment in investee corporations reflects AFC's
     ownership of 24 million shares (33%) of Chiquita common stock. The market
     value of this investment was $31 million and $24 million at March 31, 2001
     and December 31, 2000, respectively. Chiquita is a leading international
     marketer, producer and distributor of quality fresh fruits and vegetables
     and processed foods. Summarized financial information for Chiquita follows
     (in millions):

                                                  Three months ended March 31,
                                                  ----------------------------
                                                         2001             2000
                                                         ----             ----
        Net Sales                                        $577             $658
        Operating Income                                   38               68
        Net Income                                          4               35
        Net Income Attributed to Common Shares              0.4             31

     In January 2001, Chiquita announced a restructuring initiative that
     included discontinuing all interest and principal payments on its public
     debt. If successful, the restructuring would result in the conversion of a
     significant portion of Chiquita's $862 million in public debt into common
     equity. Although the intended restructuring would not impact Chiquita's
     day-to-day operations, it would adversely affect the holders of its stock,
     including AFC.
                                       10


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


     START-UP MANUFACTURING BUSINESSES Since 1998, AFC subsidiaries have made
     loans to two start-up manufacturing businesses which were previously owned
     by unrelated third-parties. During 2000, the former owners chose to forfeit
     their equity interests to AFC rather than invest additional capital. In the
     fourth quarter of 2000, AFC sold the equity interests to a group of
     employees for nominal cash consideration plus warrants to repurchase a
     significant ownership interest. Due to the absence of significant financial
     investment by the buyers relative to the amount of debt owed to AFC
     subsidiaries, the sale was not recognized as a divestiture for accounting
     purposes. Assets of the businesses transferred (approximately $55 million
     at March 31, 2001 and December 31, 2000) are included in other assets;
     liabilities of the businesses transferred (approximately $7 million at
     March 31, 2001 and December 31, 2000, after elimination of loans from AFC
     subsidiaries) are included in other liabilities. AFC's equity in the losses
     of these two companies during the first quarter of 2001 of $3.3 million is
     included in investee losses in the statement of earnings.

E.   PAYABLE TO AMERICAN FINANCIAL GROUP AFC has a reciprocal Master Credit
     Agreement with various AFG holding companies under which these companies
     make funds available to each other for general corporate purposes.

F.   LONG-TERM DEBT The carrying value of long-term debt consisted of the
     following (in thousands):
<TABLE>
<CAPTION>
                                                                March 31,     December 31,
                                                                    2001             2000
                                                                --------      -----------
         <S>                                                   <C>              <C>
          Holding Companies:
            AFC notes payable under bank line                   $160,000         $178,000
            APU 10-7/8% Subordinated Notes due May 2011           11,597           11,611
            Other                                                 14,804           14,727
                                                                --------         --------

                                                                $186,401         $204,338
                                                                ========         ========
          Subsidiaries:
            GAFRI 6-7/8% Senior Notes due June 2008             $100,000         $100,000
            GAFRI notes payable under bank line                   53,100           48,500
            Notes payable secured by real estate                  24,396           31,201
            Other                                                 14,996           15,386
                                                                --------         --------

                                                                $192,492         $195,087
                                                                ========         ========
</TABLE>

     At March 31, 2001, sinking fund and other scheduled principal payments on
     debt for the balance of 2001 and the subsequent five years were as follows
     (in millions):

                             Holding
                           Companies       Subsidiaries              Total
                           ---------       ------------           --------
          2001                $  1.4              $ 1.0             $  2.4
          2002                 170.4                1.5              171.9
          2003                   -                  1.5                1.5
          2004                   -                 61.5               61.5
          2005                   -                 10.0               10.0
          2006                   -                   .7                 .7

     Debentures purchased in excess of scheduled payments may be applied to
     satisfy any sinking fund requirement. The scheduled principal payments
     shown above assume that debentures previously purchased are applied to the
     earliest scheduled retirements.



                                       11


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


     AFC and GAFRI each have an unsecured credit agreement with a group of banks
     under which they can borrow up to $300 million and $155 million,
     respectively. Borrowings bear interest at floating rates based on prime or
     Eurodollar rates. Loans mature in December 2002 under the AFC credit
     agreement and in December 2004 under the GAFRI credit agreement.

G.   MINORITY INTEREST Minority interest in AFC's balance sheet is comprised of
     the following (in thousands):
<TABLE>
<CAPTION>
                                                             March 31,     December 31,
                                                                 2001             2000
                                                             --------      -----------
        <S>                                                 <C>              <C>
          Interest of AFG (parent) and noncontrolling
            shareholders in subsidiaries' common stock       $304,278         $291,792
          Preferred securities issued by
            subsidiary trusts                                 217,913          217,913
                                                             --------         --------

                                                             $522,191         $509,705
                                                             ========         ========
</TABLE>

     TRUST ISSUED PREFERRED SECURITIES Wholly-owned subsidiary trusts of GAFRI
     have issued preferred securities and, in turn, purchased a like amount of
     subordinated debt which provides interest and principal payments to fund
     the respective trusts' obligations. The preferred securities must be
     redeemed upon maturity or redemption of the subordinated debt. GAFRI
     effectively provides unconditional guarantees of its respective trusts'
     obligations.

     The preferred securities consisted of the following (in thousands):
<TABLE>
<CAPTION>
     Date of                                      March 31,   December 31,    Optional
     Issuance         Issue (Maturity Date)           2001           2000     Redemption Dates
     -------------    ------------------------    --------    -----------     ---------------------
<S>                  <C>                          <C>            <C>         <C>
     November 1996    GAFRI 9-1/4% TOPrS (2026)    $72,913        $72,913     On or after 11/7/2001
     March 1997       GAFRI 8-7/8% Pfd   (2027)     70,000         70,000     On or after 3/1/2007
     May 1997         GAFRI 7-1/4% ROPES (2041)     75,000         75,000     After 9/28/2001
</TABLE>

     MINORITY INTEREST EXPENSE Minority interest expense is comprised of (in
     thousands):

                                                            Three months ended
                                                                  March 31,
                                                            ------------------
                                                              2001        2000
                                                              ----        ----
          Interest of AFG (parent) and noncontrolling
            shareholders in earnings of subsidiaries        $4,005      $5,192
          Accrued distributions by subsidiaries
            on trust issued preferred securities,
              net of tax                                     2,914       3,015
                                                            ------      ------
                                                            $6,919      $8,207
                                                            ======      ======














                                       12


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


H.   SHAREHOLDERS' EQUITY At March 31, 2001 and December 31, 2000, American
     Financial Group beneficially owned all of the outstanding shares of AFC's
     Common Stock.

     PREFERRED STOCK Under provisions of both the Nonvoting (4.0 million shares
     authorized) and Voting (4.0 million shares authorized) Cumulative Preferred
     Stock, the Board of Directors may divide the authorized stock into series
     and set specific terms and conditions of each series. At March 31, 2001 and
     December 31, 2000, the outstanding voting shares of AFC's Preferred Stock
     consisted of the following:

           SERIES J, no par value; $25.00 liquidating value per share; annual
           dividends per share $2.00; redeemable at AFC's option at $25.75 per
           share beginning December 2005 declining to $25.00 at December 2007
           and thereafter; 2,886,161 shares (stated value $72.2 million)
           outstanding at March 31, 2001 and December 31, 2000.

     The change in unrealized gain (loss) on marketable securities for the three
     months ended March 31 included the following (in millions):
<TABLE>
<CAPTION>
                                                                                Minority
                                                       Pretax        Taxes      Interest       Net
                                                       ------        -----      --------      -----
<S>                                                     <C>        <C>           <C>          <C>
                        2001
     ------------------------------------------
     Unrealized holding gains on securities
       arising during the period                         $59.0      ($20.6)       ($8.2)       $30.2
     Reclassification adjustment for
       realized losses included in net income              6.9        (2.4)         (.3)         4.2
                                                         -----       -----         ----        -----
     Change in unrealized gain on
       marketable securities, net                        $65.9      ($23.0)       ($8.5)       $34.4
                                                         =====       =====         ====        =====

                        2000
     ------------------------------------------
     Unrealized holding losses on securities
       arising during the period                        ($40.3)      $14.5         $2.4       ($23.4)
     Reclassification adjustment for
       realized losses included in net income              1.4         (.5)         (.1)          .8
                                                         -----       -----         ----        -----
     Change in unrealized gain (loss) on
       marketable securities, net                       ($38.9)      $14.0         $2.3       ($22.6)
                                                         =====       =====         ====        =====
</TABLE>

I.   COMMITMENTS AND CONTINGENCIES There have been no significant changes to the
     matters discussed and referred to in Note M "Commitments and Contingencies"
     of AFC's Annual Report on Form 10-K for 2000.









                                       13


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

                                     ITEM 2

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

     GENERAL

     AFC and American Premier are organized as holding companies with almost all
     of their operations being conducted by subsidiaries. These parent
     corporations, however, have continuing cash needs for administrative
     expenses, the payment of principal and interest on borrowings, shareholder
     dividends, and taxes. Therefore, certain analyses are best done on a parent
     only basis while others are best done on a total enterprise basis. In
     addition, since most of its businesses are financial in nature, AFC does
     not prepare its consolidated financial statements using a
     current-noncurrent format. Consequently, certain traditional ratios and
     financial analysis tests are not meaningful.

     IT Initiative In 1999, AFC initiated an enterprise-wide study of its
     information technology ("IT") resources, needs and opportunities. The
     initiative entails extensive effort and costs. While the costs precede the
     expected savings, management believes the benefits in efficiencies and
     effectiveness will exceed the costs incurred, all of which have been and
     will be funded through available working capital.

     Forward-Looking Statements The Private Securities Litigation Reform Act of
     1995 provides a safe harbor for forward-looking statements. Some of the
     forward-looking statements can be identified by the use of forward-looking
     words such as "believes", "expects", "may", "will", "should", "seeks",
     "intends", "plans", "estimates", "anticipates" or the negative version of
     those words or other comparable terminology. Actual results could differ
     materially from those contained in or implied by such forward-looking
     statements for a variety of factors including:

        o  changes in economic conditions, including interest rates, performance
           of securities markets, and the availability of capital;
        o  regulatory actions;
        o  changes in legal environment;
        o  tax law changes;
        o  levels of catastrophes and other major losses;
        o  adequacy of loss reserves;
        o  availability of reinsurance; and
        o  competitive pressures, including the ability to obtain rate
           increases.

     Forward-looking statements speak only as of the date made. AFC undertakes
     no obligations to update any forward-looking statements to reflect events
     or circumstances arising after the date on which they are made.

     LIQUIDITY AND CAPITAL RESOURCES

     RATIOS AFC's debt to total capital ratio at the parent holding company
     level (excluding amounts due AFG) was approximately 11% at March 31, 2001
     and 12% at December 31, 2000. Including amounts due AFG, the ratio was 29%
     at March 31, 2001 and 31% at December 31, 2000.

     AFC's ratio of earnings to fixed charges, excluding and including preferred
     dividends, (on a total enterprise basis) was 2.39 and 2.20 for the first
     three months of 2001 and 2.02 and 1.87 for the entire year of 2000.


                                       14


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

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

     Sources of Funds Management believes the parent holding companies have
     sufficient resources to meet their liquidity requirements, primarily
     through funds generated by their subsidiaries' operations. If funds
     provided by subsidiaries through dividends and tax payments are
     insufficient to meet fixed charges in any period, the holding companies
     would be required to generate cash through borrowings, sales of securities
     or other assets, or similar transactions.

     AFC has a revolving credit agreement with several banks under which it can
     borrow up to $300 million. This credit line provides ample liquidity and
     can be used to obtain funds for operating subsidiaries or, if necessary,
     for the parent companies. There was $160 million borrowed under the line at
     March 31, 2001 and $212 million at May 1, 2001.

     Dividend payments from subsidiaries have been very important to the
     liquidity and cash flow of the individual holding companies during certain
     periods in the past. However, the reliance on such dividend payments has
     been lessened in recent years by the combination of (i) reductions in the
     amounts and cost of debt at the holding companies from historical levels
     (and the related decrease in ongoing cash needs for interest and principal
     payments), (ii) the ability to obtain financing in capital markets, as well
     as (iii) the sales of certain noncore investments.

     INVESTMENTS Approximately 92% of the fixed maturities held by AFC were
     rated "investment grade" (credit rating of AAA to BBB) by nationally
     recognized rating agencies at March 31, 2001. Investment grade securities
     generally bear lower yields and lower degrees of risk than those that are
     unrated and noninvestment grade. Management believes that the high quality
     investment portfolio should generate a stable and predictable investment
     return.

     AFC's equity securities are concentrated in a relatively limited number of
     major positions. This approach allows management to more closely monitor
     the companies and the industries in which they operate.

     RESULTS OF OPERATIONS

     GENERAL Pretax operating earnings for the first quarter of 2001 were $42.2
     million compared to $13.7 million for the fourth quarter of 2000 and $73.6
     million for the first quarter of 2000. Pretax operating earnings improved
     compared to the fourth quarter of 2000 due primarily to decreased realized
     losses and improved underwriting results. The decrease in pretax operating
     earnings compared to the first quarter of 2000 reflects a decline in the
     Personal group's underwriting results and increased realized losses.

     PROPERTY AND CASUALTY INSURANCE - UNDERWRITING AFC's property and casualty
     group consists of two major business groups: Personal and Specialty.

     The Personal group sells nonstandard and preferred/standard private
     passenger auto insurance and, to a lesser extent, homeowners' insurance.
     Nonstandard automobile insurance covers risk not typically accepted for
     standard automobile coverage because of the applicant's driving record,
     type of vehicle, age or other criteria.

     The Specialty group includes a highly diversified group of business lines.
     Some of the more significant areas are inland and ocean marine, California
     workers' compensation, agricultural-related coverages, executive and
     professional liability, fidelity and surety bonds, collateral protection,
     and umbrella and excess coverages.

                                       15
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

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


     Underwriting profitability is measured by the combined ratio which is a sum
     of the ratios of underwriting losses, loss adjustment expenses,
     underwriting expenses and policyholder dividends to premiums. When the
     combined ratio is under 100%, underwriting results are generally considered
     profitable; when the ratio is over 100%, underwriting results are generally
     considered unprofitable. The combined ratio does not reflect investment
     income, other income or federal income taxes.

     For certain lines of business and products where the credibility of the
     range of loss projections is less certain (primarily the various specialty
     businesses listed above), management believes that it is prudent and
     appropriate to use conservative assumptions until such time as the data,
     experience and projections have more credibility, as evidenced by data
     volume, consistency and maturity of the data. While this practice mitigates
     the risk of adverse development on this business, it does not eliminate it.

     Net written premiums and combined ratios for AFC's property and casualty
     insurance subsidiaries were as follows (dollars in millions):

                                                          Three months ended
                                                             March 31,
                                                         -------------------
                                                           2001         2000
                                                           ----         ----
          Net Written Premiums (GAAP)
          ---------------------------
            Personal                                     $370.5       $349.8
            Specialty                                     356.6(a)     297.7
            Other lines                                     -             -
                                                         ------       ------
                                                         $727.1       $647.5
                                                         ======       ======

          Combined Ratios (GAAP)(b)
          ----------------------
            Personal                                      108.5%       103.7%
            Specialty                                     100.6        103.8
            Aggregate (including discontinued lines)      105.6        104.2

          (a)  Before a reduction of $29.7 million for unearned premium transfer
               related to the sale of the Japanese division.

          (b)  Combined ratios for the fourth quarter of 2000 were: Personal -
               111.0%, Specialty - 104.3%, Aggregate - 106.1%. Combined ratios
               for the entire year of 2000 were: Personal - 108.6%, Specialty -
               107.9%, Aggregate - 108.0%.

     PERSONAL The Personal group's increase in net written premiums reflects the
     impact of significant rate increases implemented primarily in the second
     half of 2000, partially offset by lower business volume. The combined ratio
     improved compared to the 2000 fourth quarter due primarily to the impact of
     these rate increases. The increase in the combined ratio compared to the
     first quarter of 2000 reflects the impact of inadequate rates on policies
     written during the first part of 2000. To further improve underwriting
     results, AFC implemented rate increases averaging 5% in the first quarter
     of 2001 and expects rate increases to be in excess of 10% by the end of
     2001.

     SPECIALTY The Specialty group's increase in net written premiums reflects
     the impact of rate increases implemented in 2000 and 2001 and the
     realization of growth opportunities in certain commercial markets. In its
     California workers' compensation business, AFC implemented rate increases
     averaging 40% on renewals in the first quarter 2001 and expects rate
     increases of at least 30% on renewals in this business during the second
     quarter. Rate increases implemented in the

                                       16


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

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


     other specialty operations averaged 17% for the first quarter of 2001. The
     improvement in the combined ratio compared to both the fourth and first
     quarters of 2000 reflects the impact of these rate increases. Excluding the
     California workers' compensation business, the Specialty group's combined
     ratio for the first quarter of 2001 was 98.0%.

     LIFE, ACCIDENT AND HEALTH PREMIUMS AND BENEFITS The increase in life,
     accident and health premiums and benefits is due primarily to increased
     sales of supplemental health insurance products.

     REAL ESTATE OPERATIONS AFC's subsidiaries are engaged in a variety of real
     estate operations including hotels, apartments, office buildings and
     recreational facilities; they also own several parcels of land. Revenues
     and expenses of these operations, including gains and losses on disposal,
     are included in AFC's statement of earnings as shown below (in millions).

                                                    Three months ended
                                                           March 31,
                                                    ------------------
                                                     2001         2000
                                                     ----         ----
        Other income                                $32.0        $17.9
        Other operating and general expenses         15.0         14.3
        Interest charges on borrowed money             .7           .7
        Minority interest expense, net                1.9           .2

     Other income includes net pretax gains on the sale of real estate assets of
     $15.3 million in the first quarter of 2001 and $2.1 million in the first
     quarter of 2000.

     OTHER INCOME Other income increased $3.7 million (7%) in the first quarter
     of 2001 compared to 2000 due primarily to increased income from the sale of
     real estate which exceeded income from the sale of operating assets and
     lease residuals in the first quarter of 2000.

     REALIZED GAINS Realized capital gains have been an important part of the
     return on investments in marketable securities. Individual securities are
     sold creating gains and losses as market opportunities exist.

     Under Statement of Financial Accounting Standards ("SFAS") No. 133, which
     was adopted as of October 1, 2000, warrants to purchase common stock of
     publicly traded companies are generally considered derivatives and marked
     to market through current earnings as realized gains and losses. Realized
     losses on sales of securities includes $.8 million in losses recognized
     during the first quarter of 2001 to adjust the carrying value of AFC's
     investment in warrants to market value at March 31, 2001.

     LOSS ON SALE OF SUBSIDIARIES In 2001, AFC recognized a $1.6 million pretax
     loss representing an adjustment to the fourth quarter 2000 loss recorded on
     the sale of its Japanese division.

     ANNUITY BENEFITS Annuity benefits reflect amounts accrued on annuity
     policyholders' funds accumulated. The majority of GAFRI's fixed rate
     annuity products permit GAFRI 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.


                                       17


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q

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


     GAFRI's equity-indexed fixed annuities provide policyholders with a
     crediting rate tied, in part, to the performance of an existing stock
     market index. GAFRI attempts to mitigate the risk in the equity-based
     component of these products through the purchase of call options on the
     appropriate index. GAFRI's strategy is designed so that an increase in the
     liabilities due to an increase in the market index will be substantially
     offset by unrealized gains on the call options. Under SFAS No. 133, both
     the equity-based component of the annuities and the related call options
     are considered derivatives and marked to market through current earnings as
     annuity benefits. Adjusting these derivatives to market value had virtually
     no net effect on annuity benefits during the first quarter of 2001.

     INTEREST ON BORROWED MONEY Interest expense increased $3.3 million (21%) in
     the first quarter of 2001 compared to the first quarter of 2000 due to
     higher average indebtedness to AFG under the Master Credit Agreement.

     OTHER OPERATING AND GENERAL EXPENSES Other operating and general expenses
     increased $11.8 million (12%) in the first quarter of 2001 compared to the
     first quarter of 2000 due primarily to increased expenses associated with
     the IT initiative and slightly higher holding company expenses.

     INVESTEE CORPORATIONS For 2001, equity in earnings (losses) of investee
     corporations represents losses of two start-up manufacturing businesses.
     Equity in net earnings (losses) of investees in 2000 represents AFC's
     proportionate share of Chiquita's earnings. Chiquita reported net income of
     $.01 per share for the first quarter of 2001 and $.46 per share for the
     first quarter of 2000.


        ----------------------------------------------------------------



                                     Item 3

             Quantitative and Qualitative Disclosure of Market Risk
             ------------------------------------------------------

     As of March 31, 2001, there were no material changes to the information
     provided in AFC's Form 10-K for 2000 under the caption "Exposure to Market
     Risk" in Management's Discussion and Analysis of Financial Condition and
     Results of Operations.

















                                       18


<PAGE>


                       AMERICAN FINANCIAL CORPORATION 10-Q
                                     PART II
                                OTHER INFORMATION


                                     Item 6

                        Exhibits and Reports on Form 8-K
                        --------------------------------


(a) Exhibits:  none

(b) Reports on Form 8-K:  none





        ----------------------------------------------------------------





                                    Signature
                                    ---------


Pursuant to the requirements of the Securities Exchange Act of 1934, American
Financial Corporation has duly caused this Report to be signed on its behalf by
the undersigned duly authorized.



                                    American Financial Corporation




May 11, 2001                        BY:   Fred J. Runk
                                          -----------------------------------
                                          Fred J. Runk
                                          Senior Vice President and Treasurer























                                       19