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
September 30, 1995                                          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 November 1, 1995, there were 53,000,000 shares of the Registrant's
Common Stock outstanding, all of which were owned by American Financial Group,
Inc.  




                                 Page 1 of 16

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

                AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                                (In Thousands)

<TABLE>
<CAPTION>
                                                   September 30,    December 31,
                                                           1995            1994 
<S>                                                 <C>              <C>         
          Assets
Cash and short-term investments                     $   178,966      $  171,335 
Investments:
  Bonds and redeemable preferred stocks:
    Held to maturity - at amortized cost
      (market - $5,054,700 and $4,336,700)            4,933,152       4,629,633 
    Available for sale - at market
      (amortized cost - $2,189,194 and $1,938,853)    2,265,494       1,862,653 
  Other stocks - principally at market
    (cost - $131,855 and $137,106)                      223,555         208,706 
  Investment in affiliates                              831,761         832,637 
  Loans receivable                                      650,405         641,964 
  Real estate and other investments                     176,372         154,262 
                                                      9,080,739       8,329,855 
Recoverables from reinsurers and prepaid
  reinsurance premiums                                  886,448         902,063 
Agents' balances and premiums receivable                409,931         363,156 
Other receivables                                       208,643         197,119 
Prepaid expenses, deferred charges and other assets     457,862         410,657 
Cost in excess of net assets acquired                   173,697         175,866 

                                                    $11,396,286     $10,550,051 
<PAGE>
       Liabilities and Capital
Unpaid losses and loss adjustment expenses          $ 2,948,330     $ 2,916,985 
Unearned premiums                                       911,911         824,691 
Annuity policyholders' funds accumulated              4,857,576       4,618,108 
Long-term debt:
  Direct obligations of AFC Parent Company              375,252         490,065 
  Obligations of AFC subsidiaries:
    Great American Holding Corporation                  149,389         359,185 
    American Annuity Group, Inc.                        149,725         183,242 
    Other subsidiaries                                   75,050          74,255 
Payable to American Premier Underwriters, Inc.          574,756            -    
Accounts payable, accrued expenses and other
  liabilities                                           646,858         579,151 
Minority interest                                       135,495         105,506 
                                                     10,824,342      10,151,188 

Mandatory Redeemable Preferred Stock (at
  redemption value)                                       2,880           2,880 
Other Preferred Stock (redemption value - $278,719)     168,484         168,484 
Common Stock without par value                            9,625             904 
Retained earnings                                       290,055         223,095 
Net unrealized gain on marketable securities,
  net of deferred income taxes                          100,900           3,500 

                                                    $11,396,286     $10,550,051 
</TABLE>
                                       2
  
<PAGE>
                AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF EARNINGS
                                (In Thousands)

<TABLE>
<CAPTION>
                                            Three months ended       Nine months ended   
                                              September 30,            September 30,     
                                                1995      1994         1995          1994
<S>                                         <C>       <C>        <C>          <C>         
Income:
  Property and casualty insurance premiums  $381,850  $361,728   $1,107,141   $1,013,591 
  Investment income                          160,034   149,449      472,322      434,133 
  Realized gains on sales of securities       17,787    19,961       22,219       43,104 
  Equity in net earnings (losses) of
    affiliates                                 1,422   (21,066)      43,998       (8,844)
  Other income                                27,335    27,408       77,110       87,147 
                                             588,428   537,480    1,722,790    1,569,131 

Costs and Expenses:
  Property and casualty insurance:
    Losses and loss adjustment expenses      262,256   253,201      775,550      710,578 
    Commissions and other underwriting
      expenses                               114,590   108,815      359,085      322,204 
  Benefits to annuity policyholders           65,631    61,277      194,152      180,701 
  Interest charges on borrowed money          36,928    28,285      103,037       87,141 
  Other operating and general expenses        60,978    70,465      176,919      186,031 
                                             540,383   522,043    1,608,743    1,486,655 

Earnings before income taxes and
  extraordinary items                         48,045    15,437      114,047       82,476 
Provision for income taxes                    12,275     7,991       31,149       25,078 

Earnings before extraordinary items           35,770     7,446       82,898       57,398 

Extraordinary items, net of income taxes        -         (501)      (3,048)     (16,938)

Net Earnings                                $ 35,770  $  6,945   $   79,850    $   40,460
</TABLE>
                                       3
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

                AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF CASH FLOWS
                                (In Thousands)

<TABLE>
<CAPTION>
                                                               Nine months ended     
                                                                  September 30,       
                                                                1995             1994 
<S>                                                      <C>              <C>         
 Operating Activities:
  Net earnings                                            $   79,850       $   40,460 
  Adjustments:
    Extraordinary losses from retirement of debt               3,048           16,938 
    Depreciation and amortization                             23,362           16,178 
    Benefits to annuity policyholders                        194,152          180,701 
    Equity in net (earnings) losses of affiliates            (43,998)           8,844 
    Changes in reserves on assets                              2,932            7,482 
    Realized gains on investing activities                   (22,921)         (52,471)
    Increase in reinsurance and other receivables            (41,283)        (252,345)
    Increase in prepaid expenses, deferred charges
      and other assets                                       (80,826)         (62,368)
    Increase in insurance claims and reserves                116,692          300,359 
    Increase (decrease) in other liabilities                 (18,625)          55,943 
    Increase in minority interest                             16,961            5,456 
    Dividends from affiliates                                 17,124           15,753 
    Other, net                                                (4,765)          (1,956)
                                                             241,703          278,974 
Investing Activities:
  Purchases of and additional investments in:
    Fixed maturity investments                            (1,352,959)      (1,296,238)
    Equity securities                                         (3,749)          (2,574)
    Affiliates and subsidiaries                              (13,327)         (23,852)
    Real estate, property and equipment                      (23,600)         (18,988)
  Maturities and redemptions of fixed maturity
    investments                                              193,451          310,472 
  Sales of:
    Fixed maturity investments                               672,221          543,939 
    Equity securities                                         15,258          111,522 
    Affiliates and subsidiaries                               43,697           27,621 
    Real estate, property and equipment                        5,040            2,619 
  Decrease (increase) in other investments                   (11,030)          11,441 
  Other                                                         -             (12,536)
                                                            (474,998)        (346,574)
<PAGE>
Financing Activities:
  Annuity receipts                                           338,353          313,077 
  Annuity surrenders, benefits and withdrawals              (302,486)        (244,175)
  Additional long-term borrowings                            145,128          198,271 
  Reductions of long-term debt                              (494,753)        (173,354)
  Borrowings from American Premier                           639,000             -    
  Repayments of borrowings from American Premier             (80,000)            -    
  Repurchases of preferred stock                                (147)          (4,466)
  Exercise of stock options                                    8,721             -    
  Cash dividends paid                                        (12,890)         (16,900)
                                                             240,926           72,453 

Net Increase in Cash and Short-term Investments                7,631            4,853 

Cash and short-term investments at beginning of period       171,335          167,950 

Cash and short-term investments at end of period          $  178,966       $  172,803 
</TABLE>
                                       4
<PAGE>

                      AMERICAN FINANCIAL CORPORATION 10-Q

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


A.  Merger  On April 3, 1995, American Financial Corporation ("AFC") merged
    with a newly formed subsidiary of American Premier Group, Inc., another
    new company formed to own 100% of the common stock of both AFC and
    American Premier Underwriters, Inc. ("American Premier").  Subsequently,
    American Premier Group changed its name to American Financial Group, Inc.
    to reflect its core property and casualty insurance and annuity
    businesses.  In the transaction, Carl H. Lindner and members of his
    family, who owned 100% of the Common Stock of AFC, exchanged their AFC
    Common Stock for approximately 55% of American Financial Group voting
    common stock.  Former shareholders of American Premier, including AFC and
    its subsidiaries, received shares of American Financial Group stock on a
    one-for-one basis.  No gain or loss was recorded on the exchange of
    shares.

    AFC will continue to be a separate SEC reporting company with publicly
    traded debentures and preferred stock.  Holders of AFC Series F and G
    Preferred Stock were granted voting rights equal to approximately 21% of
    the total voting power of AFC shareholders immediately prior to the
    merger.

B.  Accounting Policies

    Basis of Presentation  The accompanying consolidated financial statements
    for American Financial Corporation 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.
<PAGE>
    AFC's ownership of subsidiaries and significant affiliates with publicly
    traded shares was as follows:

<TABLE>
<CAPTION>
                                                  September 30,      December 31,
                                                          1995       1994    1993
      <S>                                                  <C>       <C>     <C> 
      American Annuity Group, Inc. ("AAG")                  80%       80%     80%
      American Financial Enterprises, Inc. ("AFEI")         83%       83%     83%
      American Financial Group, Inc. ("AFG")                25%        -       - 
      American Premier Underwriters, Inc.                   (a)       42%     41%
      Chiquita Brands International, Inc.                   39%       46%     46%
      Citicasters Inc.                                      37%       37%     20%
      General Cable Corporation                              -        (b)     45%
<FN>
      (a) Exchanged for shares of American Financial Group in April 1995.
      (b) Sold in June 1994.
</TABLE>

      Investments  Debt securities are classified as "held to maturity" and
      reported at amortized cost if AFC has the positive intent and ability to
      hold them to maturity.  Debt and equity securities are classified as (i)
      "trading" and

                                       5
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


    reported at fair value with unrealized gains and losses included in
    earnings if the securities are bought and held principally for selling in
    the near term and (ii) as "available for sale" and reported at fair value,
    with unrealized gains or losses reported as a separate component of
    shareholders' equity if the debt or equity securities are not classified
    as held to maturity or trading.  Only in certain limited circumstances,
    such as significant issuer credit deterioration or if required by
    insurance or other regulators, may a company change its intent to hold a
    certain security to maturity without calling into question its intent to
    hold other debt securities to maturity in the future.

    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.

    Short-term investments are carried at cost; loans receivable are stated
    primarily at the aggregate unpaid balance.  

    Investment in Affiliates  Investments in securities of 20%- to 50%-owned
    companies are carried at cost, adjusted for AFC's proportionate share of
    their undistributed earnings or losses.  Investments in less than
    20%-owned companies are accounted for by the equity method when, in the
    opinion of management, AFC can exercise significant influence over
    operating and financial policies of the affiliate. 

    Cost in Excess of Net Assets Acquired  The excess of cost of subsidiaries
    and affiliates (purchased subsequent to October 1970) over AFC's equity in
    the underlying net assets ("goodwill") is being amortized over 40 years. 

    The excess of AFC's equity in the net assets of other subsidiaries and
    affiliates over its cost of acquiring these companies ("negative
    goodwill") has been allocated to AFC's basis in these companies' fixed
    assets, goodwill and other long-term assets and is amortized on a 10- to
    40-year basis.

    Insurance  As discussed under "Reinsurance" below, unpaid losses and loss
    adjustment expenses and unearned premiums have not been reduced for
    reinsurance recoverable.
<PAGE>
    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 reinsurance
    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.
                                       6
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


    Deferred Policy Acquisition Costs  Policy acquisition costs (principally
    commissions, premium taxes and other underwriting expenses) related to the
    production of new business are deferred and included in "Prepaid expenses,
    deferred charges and other assets".  For the property and casualty
    companies, the deferral of acquisition costs is limited based upon their
    recoverability without any consideration for anticipated investment
    income.  Deferred policy acquisition costs ("DPAC") are charged against
    income ratably over the terms of the related policies.  For the annuity
    company, DPAC is amortized, with interest, in relation to the present
    value of expected gross profits on the policies.

    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) esti-mates received from ceding reinsurers and
    insurance pools and associations; (c) estimates of unreported losses based
    on past experience and (d) estimates based on experience of expenses for
    investigating and adjusting claims.  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.

    Premium Recognition  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.

    Annuity Policyholders' Funds Accumulated  Annuity receipts and benefit
    payments are generally recorded as increases or decreases in "annuity
    policyholders' funds 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.
<PAGE>
    Income Taxes  AFC files consolidated federal income tax returns which
    include all 80%-owned U.S. 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's Employee Stock Ownership Retirement Plan ("ESORP") is
    a noncontributory, trusteed plan which invests in securities of AFC and
    affiliates for the benefit of the employees of AFC and certain of its
    subsidiaries.  The ESORP covers all employees of participating companies
    who are qualified as to   age and length of service.  Contributions are
    discretionary by the directors of participating companies and are charged
    against earnings in the year for which they are declared.
                                    7
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


    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
    qualify for such benefits.  

    In connection with the 1995 merger, full vesting was granted to holders of
    units under AFC's Book Value Incentive Plan and the plan was terminated. 
    Cash payments, which were made in April to holders of the units, were
    accrued at December 31, 1994. 

    Debt Discount  Debt discount and expenses are being amortized over the
    lives of respective borrowings, generally on the interest method.  

    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.

C.  Sales of Affiliates   In April 1995, AFC sold 3.2 million shares of
    Chiquita common stock to American Premier for $43.7 million, realizing a
    $442,000 loss on the sale.  In June 1994, AFC sold its investment in
    General Cable common stock to an unaffiliated company for $27.6 million in
    cash.  AFC realized a $1.7 million pretax gain on the sale (excluding its
    share of American Premier's loss on its sale of securities of General
    Cable).  The loss on the sale of Chiquita and gain on the sale of General
    Cable are included in "Other income."
<PAGE>
D.  Segments of Operations  Through subsidiaries, AFC is engaged in several
    financial businesses, including property and casualty insurance, annuities
    and portfolio investing.  AFC also owns significant portions of the voting
    equity securities of certain companies (affiliate corporations - see Note
    E).  The following table (in thousands) shows AFC's revenues by
    significant business segment.  Intersegment transactions are not
    significant.

<TABLE>
<CAPTION>
                                                      Nine months ended     September 30, 
                                                                   1995             1994 
                 <S>                                        <C>              <C>         
                 Revenues
                    Property and casualty insurance:
                     Underwriting                            $1,107,141       $1,013,591 
                     Investment and other income                231,272          245,146 
                                                              1,338,413        1,258,737 
                    Annuities (*)                               308,818          283,244 
                    Other                                        31,561           35,994 
                                                              1,678,792        1,577,975 
                    Equity in net earnings (losses)
                     of affiliates                               43,998           (8,844)
                                                             $1,722,790       $1,569,131 
<FN>
                 (*) Represents primarily investment income and realized gains.
</TABLE>
                                       8
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


E.  Investment in Affiliates   Investment in affiliates represents AFC's
    ownership of securities of certain companies.  All of the companies named
    in the following table are subject to the rules and regulations of the
    SEC.  Market value of the investments was approximately $1.1 billion and
    $890 million at September 30, 1995 and December 31, 1994, respectively. 
    AFC's investment (and common stock ownership percentage) in these
    affiliates was as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                          September 30, 1995       December 31, 1994 
        <S>                                  <C>                     <C>             
        American Financial Group              $548,169 (25%)          $   -          
        American Premier                         -                     525,927 (42%) 
        Chiquita                               210,764 (39%)           237,015 (46%) 
        Citicasters                             72,828 (37%)            69,695 (37%) 
                                              $831,761                $832,637       
</TABLE>

    In addition to owning the common stock of AFC, American Financial Group
    owns all of the common stock of American Premier, a specialty property and
    casualty insurance company.  Chiquita is a leading international marketer,
    processor and producer of quality food products.  Citicasters owns and
    operates radio and television stations in major markets throughout the
    country.

    As discussed in Note A, AFC received shares of American Financial Group in
    exchange for its American Premier stock on a one-for-one basis in April
    1995.  Summarized financial information for AFC's affiliates follows (in
    millions):

<TABLE>
<CAPTION>
                                                Six months ended 
        American Financial Group              September 30, 1995 
        <S>                                              <C>     
        Revenues                                          $2,009 
        Income before Extraordinary Item                      84 
        Extraordinary Item                                     3 
        Net Earnings                                          87 
</TABLE>
<TABLE>
<CAPTION>
                                              Three months ended   Nine months ended 
        American Premier                          March 31, 1995  September 30, 1994 
        <S>                                                <C>               <C>     
        Revenues                                            $433              $1,304 
        Income (Loss) from Continuing
          Operations                                          16                 (14)
        Discontinued Operations                               -                   (1)
        Net Earnings (Loss)                                   16                 (15)
</TABLE>
<PAGE>
    American Premier's results for the 1994 period included a $75.8 million
    loss on the sale of securities of General Cable.

<TABLE>
<CAPTION>
                                                      Nine months ended September 30,
                                                            1995                1994 
        <S>                                              <C>                 <C>     
        Chiquita
        Net Sales                                         $3,065              $2,964 
        Operating Income                                     176                 108 
        Income (Loss) before Extraordinary Item               61                 (14)
        Extraordinary Item                                    (5)                (23)
        Net Income (Loss)                                     56                 (37)
</TABLE>

    Chiquita's 1994 results included charges and losses aggregating
    $57 million recorded in the third quarter resulting from the shutdown of
    non-productive banana farms in Honduras and a scaling back of Japanese
    operations.  Amounts for 1994 were reclassified by Chiquita to reflect the
    reconsolidation of its Meat Division.
                                       9
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

<TABLE>
<CAPTION>
                                               Nine months ended September 30,
                                                         1995            1994 
        <S>                                             <C>             <C>   
        Citicasters
        Net Revenues                                     $100            $160 
        Operating Income                                   25              39 
        Net Earnings                                       10              48 
</TABLE>

    In the third and fourth quarters of 1994, Citicasters sold four network-
    affiliated television stations for $355 million in cash and a warrant to
    purchase common stock of the purchaser.  The proceeds were used to reduce
    debt and repurchase shares of common stock.  Included in Citicasters' net
    earnings for the 1994 period is a net gain of $41.7 million from the sale
    of three of these stations.

F.  Long-Term Debt  Long-term debt of American Financial Corporation (Parent
    Company) consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                 September 30,    December 31,
                                                         1995            1994 
       <S>                                          <C>             <C>       
       9-3/4% Debentures due 2004                    $272,685        $203,759 
       10% Debentures due 1999
           (including Series A)                        89,620          89,620 
       12% Debentures due 1999
           (including Series A and B)                    -            120,463 
       12-1/4% Debentures due 2003                       -             51,556 
       Other                                           12,947          24,667 
                                                     $375,252        $490,065 
</TABLE>

    In the second, third and fourth (through November 10) quarters of 1995,
    respectively, AFC issued $50 million, $20 million and $30 million
    principal amount of 9-3/4% debentures in private offerings. 

    In September 1995, Great American Holding Corporation ("GAHC"), a wholly-
    owned subsidiary of AFC, retired all $50 million principal amount of its
    floating rate notes at par and in October 1995, redeemed all $150 million
    principal amount of its 11% notes at par.  The funds for these repayments
    were derived from (i) borrowings under GAHC's bank credit line, (ii) AFC's
    issuance of 9-3/4% debentures, and (iii) borrowings under AFC's line of
    credit with American Premier.
<PAGE>
    At September 30, 1995, sinking fund and other scheduled principal payments
    on debt for the balance of 1995 and the subsequent five years, adjusted to
    reflect the redemption of the GAHC 11% notes and borrowings under GAHC's
    bank lines, were as follows (in thousands):
<TABLE>
<CAPTION>
                              Parent              Other 
                             Company       Subsidiaries             Total 
         <S>                <C>                <C>              <C>       
          1995               $  -               $   278          $    278 
          1996                  -                 1,831             1,831 
          1997                 5,900             43,779            49,679 
          1998                  -                25,868            25,868  
          1999                93,895             25,953           119,848 
          2000                  -                55,074            55,074 
</TABLE>
                                      10
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


    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 purchased are applied to the earliest
    scheduled retirements.

G.  Payable to American Premier Underwriters, Inc.  In furtherance of the
    previously announced plan to use American Premier cash following the
    merger to retire debt, AFC (i) repaid $187 million of borrowings under its
    bank credit agreement in April 1995 and (ii) redeemed all of its
    outstanding 12% and 12-1/4% Debentures in May 1995, using funds borrowed
    under a new $675 million subordinated line of credit with American
    Premier.  Borrowings under the credit line bear interest at 11-5/8% and
    convert to a four-year term loan in March 2005.  At September 30, 1995,
    AFC had borrowed $559.6 million under the credit agreement.  Accrued
    interest of $15.2 million at September 30, 1995, was paid in October 1995.

H.  Mandatory Redeemable Preferred Stock  At September 30, 1995 and
    December 31, 1994, there were 274,242 shares of $10.50 par value Series E
    Preferred Stock outstanding.  These shares are nonvoting, cumulative and
    are required to be retired, at par, in December 1995. 

I.  Other Preferred Stock  Under provisions of both the Nonvoting
    (21.1 million shares authorized, including the Mandatory Redeemable
    Preferred Stock) and Voting (17.0 million shares authorized, 14.1 million
    shares outstanding) Cumulative Preferred Stock, the Board of Directors may
    divide the authorized stock into series and set specific terms and
    conditions of each series.  At September 30, 1995, the outstanding shares
    of other preferred stock consisted of the following: 
<TABLE>
<CAPTION>
                                                    September 30,    December 31,
                                                            1995            1994
    <S>                                              <C>            <C>         
    Series F - $20.00 liquidation value per share; 
      annual dividends per share $1.80; 10% may
      be retired annually at AFC's option in
      1995 and 1996.                                  13,744,754     13,744,754 

    Series G - $10.50 liquidation value per share;
      annual dividends per share $1.05; may be
      retired at AFC's option.                           364,158        364,158 
</TABLE>

J.  Common Stock  In connection with the April 1995 merger discussed in Note
    A, AFC issued 762,500 common shares upon exercise of stock options and
    increased the number of authorized common shares to 53.5 million.  At
    September 30, 1995, American Financial Group owned all 53.0 million
    outstanding shares of AFC's Common Stock. 
                                      11
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


K.  Extraordinary Items  Extraordinary items consisted of the following (in
    thousands):

<TABLE>
<CAPTION>
                                                              1995       1994
       <S>                                               <C>         <C>      
       Loss on AFC's prepayment of debt                   ($1,713)    $   -   
       Premium paid on AFC debentures retired in
         exchange offer                                       -        (6,454)
       Gain (loss) on subsidiary's prepayment of debt
         (net of minority interest of ($5) and $216)           30      (1,448)
       Share of loss on affiliate's prepayment of debt
         (net of minority interest of $24 and $139
         and income tax benefit of $65 and $374)           (1,365)     (9,036)
                                                          ($3,048)   ($16,938)
</TABLE>

L.  Cash Flows - Fixed Maturity Investments  "Investing activities" related to
    fixed maturity investments in AFC's Statement of Cash Flows consisted of
    the following (in thousands):
<TABLE>
<CAPTION>
                                         Held to     Available 
       1995                             Maturity      For Sale          Total 
       <S>                             <C>           <C>          <C>         
       Purchases                        $424,915      $928,044     $1,352,959 
       Maturities and redemptions        118,469        74,982        193,451 
       Sales                               9,040       663,181        672,221 

       1994
       Purchases                        $897,460      $398,778     $1,296,238 
       Maturities and redemptions        142,561       167,911        310,472 
       Sales                               7,781       536,158        543,939 
</TABLE>

    Securities classified as "held to maturity" having an amortized cost of
    $9.0 million and $8.5 million were sold in 1995 and 1994, respectively,
    due primarily to deterioration in the issuers' creditworthiness.

M.  Pending Legal Proceedings  Counsel has advised AFC that there is little
    likelihood of any substantial liability being incurred from any litigation
    pending against AFC and subsidiaries.
                                      12
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

                                    ITEM 2

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

AFC is organized as a holding company with almost all of its operations being
conducted by subsidiaries and affiliates.  The parent corporation, however,
has continuing expenditures for administrative expenses and corporate services
and, most importantly, for the payment of principal and interest on borrowings
and dividends on AFC Preferred Stock.  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. 

MERGER
 
As discussed in Note A to the financial statements, on April 3, 1995, AFC
merged with a newly formed subsidiary of American Financial Group, Inc.,
another new company formed to own both AFC and American Premier.    

LIQUIDITY AND CAPITAL RESOURCES

Ratios  The ratio of AFC's (parent only) long-term debt to equity (excluding
Mandatory Redeemable Preferred Stock) was .66 at September 30, 1995, compared
to 1.24 at December 31, 1994.  AFC's ratio of earnings to fixed charges on a
total enterprise basis was 1.90 for the first nine months of 1995 compared to
1.69 for the entire year of 1994; ratios of earnings to fixed charges and
preferred dividends were 1.62 and 1.40 for the same periods.

Sources of Funds  In April 1995, AFC entered into a subordinated credit
agreement with American Premier under which it can borrow up to $675 million. 
The credit line bears interest at 11-5/8% and converts to a four-year term
loan in March 2005 with scheduled principal payments to begin in April 2005. 
During April and May 1995, AFC borrowed $549 million under the agreement using
the proceeds for debt retirements, capital contributions to subsidiaries and
other corporate purposes.  At September 30, 1995, AFC had borrowed
$559.6 million under the credit agreement. 
<PAGE>
GAHC has a revolving credit agreement with several banks under which it can
borrow up to $300 million.  The credit line converts to a four-year term loan
in December 1996 with scheduled principal payments to begin in March 1997. 
Borrowings under the credit line are made by GAHC and are generally advanced
to AFC.  The line is guaranteed by AFC and secured by 50% of the stock of
Great American Insurance Company ("GAI").  AFC had no outstanding borrowings
under the agreement at September 30, 1995, and $160 million outstanding at
December 31, 1994.  During October 1995, GAHC borrowed $120 million under the
line; it is anticipated that $75 million of the borrowing will be repaid in
mid-November. 

In September 1995, GAHC retired all $50 million principal amount of its
floating rate notes at par and in October 1995, redeemed all $150 million
principal amount of its 11% notes at par.  The funds for these repayments were
derived from (i) borrowings under GAHC's credit line in October 1995, (ii)
AFC's issuance of 9-3/4% debentures in September and October 1995, and (iii)
borrowings under AFC's line of credit with American Premier.
                                      13
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

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


Investments  Significant portions of equity and, to a lesser extent, fixed
income investments are concentrated in a relatively limited number of major
positions.  This approach allows management to more closely monitor these
companies and the industries in which they operate.  Some of the investments,
because of their size,   may not be as readily marketable as the typical small
investment position. Alternatively, a large equity position may be attractive
to persons seeking to control or influence the policies of a company.  While
management believes this investment philosophy will produce higher overall
returns, such concentrations subject the portfolio to greater risk in the
event one of the companies invested in becomes financially distressed.

Approximately 95% of the bonds and redeemable preferred stocks held by AFC
were rated "investment grade" (credit rating of AAA to BBB) by nationally
recognized rating agencies at September 30, 1995.  Investment grade securities
generally bear lower yields and lower degrees of risk than those that are
unrated and non-investment grade.

RESULTS OF OPERATIONS

General  Pretax earnings for the three months ended September 30, 1995 were
$48 million, an increase of $32.6 million over the comparable 1994 period. 
The increase is attributable to an $11 million increase in investment income,
the absence of charges for AFC's share ($26 million) of certain nonrecurring
losses recorded by an affiliate in 1994 and a 1994 charge of $26 million for
Proposition 103, an insurance reform measure passed by California voters. 
Partially offsetting these items were a $9 million increase in interest on
borrowed money, a $4 million increase in benefits to annuity policyholders and
a $5 million credit in 1994 for AFC's Book Value Incentive Plan.

Pretax earnings were $114 million in the first nine months of 1995, an
increase of 38% over the $82.5 million in the comparable 1994 period.  The
$32 million increase is attributable to an increase of $38 million in
investment income, the absence of charges for AFC's share ($54 million) of
certain nonrecurring losses recorded by affiliates in 1994 and a 1994 charge
of $26 million for Proposition 103.  These items were partially offset by (i)
an $8 million decrease in underwriting results of the property and casualty
insurance segment, (ii) a $30 million decrease in realized gains from sales of
securities, affiliates and other investments, (iii) an increase of $13 million
in benefits to annuity policyholders, (iv) an increase of $16 million in
interest on borrowed money and (v) a $9 million credit in 1994 for AFC's Book
Value Incentive Plan.
<PAGE>
Property and Casualty Insurance  Underwriting profitability is measured by
the combined ratio which is a sum of the ratios of underwriting expenses,
losses, and loss adjustment expenses 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.

The combined underwriting ratio (based on generally accepted accounting
principles) of GAI and its property and casualty insurance subsidiaries was
98.8% and 102.4% for the third quarter and nine months of 1995; comparable
ratios for the same periods of 1994 were 99.8% and 101.6%.  The deterioration
in the nine-month 
                                      14 
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q

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


underwriting results was due primarily to losses from hailstorms in Texas and
Great American's participation in a voluntary pool.  These losses were
partially offset by favorable reserve development in Great American's niche
products in the third quarter of 1995.  Great American will significantly
reduce its participation in voluntary pools beginning in December 1995. 
The 1994 ratio does not reflect Great American's third quarter charge for
Proposition 103. 

Earned premiums increased $94 million (9%) and insurance expenses increased
$102 million (10%) during the first nine months of 1995.  The increase in
premiums was due to an increase in sales of specialized niche products and
workers' compensation insurance.    

Investment Income  Investment income increased $10.6 million (7%) in the third
quarter and $38 million (9%) in the nine months of 1995 compared to 1994 due
to an increase in the average amount of investments held.

Realized Gains  Realized capital gains have been an important part of AFC's
return on its investments in marketable securities.  Individual securities are
sold creating gains and losses from time to time as investment strategies
change or as market opportunities appear to present optimal conditions.

Affiliate Corporations  Equity in net earnings of affiliate corporations
(companies in which AFC owns a significant portion of the voting stock)
represents AFC's proportionate share of the affiliates' earnings and losses. 
AFC's equity in net earnings (losses) of affiliate corporations in the first
nine months of 1994 includes its share ($28 million) of American Premier's
loss on the sale of securities of General Cable and its share ($26 million) of
charges and losses recorded by Chiquita pertaining to the shutdown of banana
farms in Honduras and a scaling back of operations in Japan.   
   
Benefits to Annuity Policyholders  Benefits to annuity policyholders increased
approximately 7% over the comparable three and nine month periods in 1994 due
primarily to an increase in average annuity policyholder funds accumulated. 
The rate at which interest is credited on annuity policyholders' funds is
subject to change based on management's judgment of market conditions.

Interest on Borrowed Money  Interest expense on borrowed money increased
$8.6 million (31%) and $16 million (18%) from the third quarter and first nine
months of 1994, respectively, due primarily to an increase in average
borrowings.  In the second quarter of 1995, AFC borrowed $549 million under
its new credit agreement with American Premier using the proceeds to retire
$372 million of debt and for other corporate purposes.

Other Operating and General Expenses  Included in other operating and general
expenses in the first nine months of 1995 and 1994 are charges of
$10.8 million and $5.9 million, respectively, for minority interest.  Also
included in other operating and general expenses are (i) a third quarter
charge of $26 million in 1994 for Proposition 103 and (ii) a credit of
$9.1 million in the first nine months of 1994 for an adjustment to the
liability for units outstanding under AFC's Book Value Incentive Plan.
                                      15
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q
                                    PART II
                               OTHER INFORMATION


                                    ITEM 6

                       Exhibits and Reports on Form 8-K


(a) Exhibit 27 - Financial Data Schedule - Included in Report filed
    electronically with the Securities and Exchange Commission.

(b) Report on Form 8-K:

            Date of Report       Item Reported
            August 29, 1995      Change in Parent's Independent Auditors


                                                                 



                                   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



November 13, 1995                   BY: FRED J. RUNK                 
                                        Fred J. Runk
                                        Vice President and Treasurer

                                      16