<PAGE>
                       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, 2000                                          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, 2000, 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 18

<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,
                                                                     2000              1999
                                                              -----------       -----------
<S>                                                          <C>               <C>
Assets:
   Cash and short-term investments                            $   285,379       $   389,018
   Investments:
     Fixed maturities - at market
       (amortized cost - $10,306,884 and $10,101,005)          10,039,884         9,862,205
     Other stocks - at market
       (cost - $233,168 and $229,201)                             399,568           409,701
     Investment in investee corporation                           171,019           159,984
     Policy loans                                                 215,247           217,171
     Real estate and other investments                            270,315           265,288
                                                              -----------       -----------
         Total investments                                     11,096,033        10,914,349

   Recoverables from reinsurers and prepaid
     reinsurance premiums                                       1,898,066         2,105,818
   Agents' balances and premiums receivable                       708,443           656,924
   Deferred acquisition costs                                     705,695           660,672
   Other receivables                                              255,593           222,438
   Variable annuity assets (separate accounts)                    466,359           354,371
   Prepaid expenses, deferred charges and other assets            376,291           384,567
   Cost in excess of net assets acquired                          332,239           335,652
                                                              -----------       -----------

                                                              $16,124,098       $16,023,809
                                                              ===========       ===========

Liabilities and Capital:
   Unpaid losses and loss adjustment expenses                 $ 4,656,193       $ 4,795,449
   Unearned premiums                                            1,410,459         1,325,766
   Annuity benefits accumulated                                 5,494,318         5,519,528
   Life, accident and health reserves                             525,750           520,644
   Payable to American Financial Group, Inc.                      356,809           370,965
   Long-term debt:
     Holding companies                                            155,009           112,557
     Subsidiaries                                                 240,850           239,733
   Variable annuity liabilities (separate accounts)               466,359           354,371
   Accounts payable, accrued expenses and other
     liabilities                                                  979,261           970,495
                                                              -----------       -----------
         Total liabilities                                     14,285,008        14,209,508

<PAGE>
   Minority interest                                              486,119           490,194

   Shareholders' Equity:
     Preferred Stock (liquidation value $72,154)                   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                                              963,896           960,782
     Retained earnings                                            344,596           296,246
     Unrealized loss on marketable securities, net                (37,300)          (14,700)
                                                              -----------       -----------
         Total shareholders' equity                             1,352,971         1,324,107
                                                              -----------       -----------

                                                              $16,124,098       $16,023,809
                                                              ===========       ===========
</TABLE>

                                        2

<PAGE>

                       AMERICAN FINANCIAL CORPORATION 10-Q

              AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENT OF EARNINGS

                                 (In Thousands)

<TABLE>
<CAPTION>
                                                               Three months ended
                                                                     March 31,
                                                              ---------------------
                                                                  2000         1999
                                                                  ----         ----
<S>                                                          <C>          <C>
Income:
  Property and casualty insurance premiums                    $572,137     $537,466
  Life, accident and health premiums                            49,919       25,588
  Investment income                                            209,605      205,460
  Realized gains (losses) on sales of securities                (1,433)       4,449
  Other income                                                  50,307       27,805
                                                              --------     --------
                                                               880,535      800,768

Costs and Expenses:
  Property and casualty insurance:
    Losses and loss adjustment expenses                        417,651      365,829
    Commissions and other underwriting expenses                178,432      168,221
  Annuity benefits                                              66,161       64,941
  Life, accident and health benefits                            36,724       18,879
  Interest charges on borrowed money                            15,554       16,847
  Other operating and general expenses                          92,376       76,227
                                                              --------     --------
                                                               806,898      710,944
                                                              --------     --------

Operating earnings before income taxes                          73,637       89,824
Provision for income taxes                                      24,255       30,214
                                                              --------     --------

Net operating earnings                                          49,382       59,610

Minority interest expense, net of tax                           (8,207)     (11,962)
Equity in net earnings of investee, net of tax                   7,175       10,606
                                                              --------     --------

Earnings before accounting change                               48,350       58,254
Cumulative effect of accounting change                            -          (3,854)
                                                              --------     --------

Net Earnings                                                  $ 48,350     $ 54,400
                                                              ========     ========
</TABLE>

                                        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, 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 (loss)                                                                                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
                                           =======         ========     ========            =======        ==========






Balance at January 1, 1999                  72,154         $952,984     $157,218           $348,300        $1,530,656

Net earnings                                  -                -          54,400               -               54,400
Change in unrealized                          -                -            -               (71,400)          (71,400)
                                                                                                           ----------
  Comprehensive income (loss)                                                                                 (17,000)

Capital contribution from parent              -               3,067         -                  -                3,067
Other                                         -               1,716         -                  -                1,716
                                           -------         --------     --------           --------        ----------

Balance at March 31, 1999                  $72,154         $957,767     $211,618           $276,900        $1,518,439
                                           =======         ========     ========           ========        ==========
</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,
                                                                  ---------------------
                                                                      2000         1999
                                                                      ----         ----
<S>                                                              <C>          <C>
Operating Activities:
    Net earnings                                                  $ 48,350     $ 54,400
    Adjustments:
      Cumulative effect of accounting change                          -           3,854
      Equity in net earnings of investee                            (7,175)     (10,606)
      Depreciation and amortization                                 30,498       21,947
      Annuity benefits                                              66,161       64,941
      Realized gains on investing activities                        (7,611)      (7,247)
      Deferred annuity and life policy acquisition costs           (33,668)     (28,236)
      Decrease in reinsurance and other receivables                124,640       61,589
      Decrease (increase) in other assets                           13,710      (10,838)
      Decrease in insurance claims and reserves                    (50,957)     (15,614)
      Increase in other liabilities                                  2,454       20,224
      Increase (decrease) in minority interest                        (285)       4,634
      Dividends from investee                                         -           1,200
      Other, net                                                    (2,393)      (1,111)
                                                                  --------     --------
                                                                   183,724      159,137
                                                                  --------     --------

Investing Activities:
    Purchases of and additional investments in:
      Fixed maturity investments                                  (601,115)    (535,513)
      Equity securities                                            (14,786)     (19,183)
      Subsidiaries                                                    -         (26,636)
      Real estate, property and equipment                          (18,935)     (18,541)
    Maturities and redemptions of fixed maturity
      investments                                                  154,704      340,961
    Sales of:
      Fixed maturity investments                                   227,797      180,604
      Equity securities                                             19,265       15,763
      Real estate, property and equipment                            1,504        2,990
    Cash and short-term investments of acquired
      subsidiaries, net                                               -          11,740
    Decrease in other investments                                    5,486       21,563
                                                                  --------     --------
                                                                  (226,080)     (26,252)
                                                                  --------     --------
<PAGE>
Financing Activities:

    Fixed annuity receipts                                         126,416      107,487
    Annuity surrenders, benefits and withdrawals                  (192,820)    (189,980)
    Net transfers from fixed to variable annuity assets            (21,453)      (3,063)
    Additional long-term borrowings                                 44,091       69,150
    Reductions of long-term debt                                      (610)        (549)
    Borrowings from AFG                                               -           3,000
    Repayments of borrowings from AFG                              (20,313)     (64,800)
    Capital contribution                                             4,667        4,667
    Repurchases of trust preferred securities                       (1,261)      (5,509)
                                                                  --------     --------
                                                                   (61,283)     (79,597)
                                                                  --------     --------

Net Increase (Decrease) in Cash and Short-term Investments        (103,639)      53,288

Cash and short-term investments at beginning
    of period                                                      389,018      289,944
                                                                  --------     --------

Cash and short-term investments at end of period                  $285,379     $343,232
                                                                  ========     ========
</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 CORPORATION 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.

   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.

   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.
<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 reinsured policies. AFC's insurance subsidiaries report
   as

                                        6

<PAGE>

                       AMERICAN FINANCIAL CORPORATION 10-Q

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

   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. For the annuity companies,
   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) 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.

      VARIABLE ANNUITY ASSETS AND LIABILITIES Separate accounts related to
   variable annuities represent deposits invested in underlying investment funds
   on which American Annuity Group, Inc. ("AAG") earns a fee. The investment
   funds are selected and may be changed only by the policyholder.
<PAGE>

      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.

                                        7

<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

      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 AAG, and (ii)
   the American Financial Group, Inc. ("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 AFC's Retirement and Savings Plan. Under the
   retirement portion of the plan, company contributions are invested primarily
   in securities of AFC 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.

   START-UP COSTS Prior to 1999, AAG, an 83%-owned subsidiary, deferred certain
   costs associated with introducing new products and distribution channels and
   amortized them on a straight-line basis over 5 years. In 1999, AAG
   implemented Statement of Position ("SOP") 98-5, "Reporting on the Costs of
   Start-Up Activities." The SOP requires that (i) costs of start-up activities
   be expensed as incurred and (ii) unamortized balances of previously deferred
   costs be expensed and reported as the cumulative effect of a change in
   accounting principle. Accordingly, AFC expensed previously capitalized
   start-up costs of $3.8 million (net of minority interest and taxes) or $.06
   per diluted share, effective January 1, 1999.

                                        8
<PAGE>

                       AMERICAN FINANCIAL CORPORATION 10-Q

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

   DERIVATIVES The Financial Accounting Standards Board issued SFAS No. 133,
   "Accounting for Derivative Instruments and Hedging Activities," during the
   second quarter of 1998. SFAS No. 133 establishes accounting and reporting
   standards for derivative instruments, including derivative instruments that
   are embedded in other contracts, and for hedging activities and must be
   implemented no later than January 1, 2001. SFAS No. 133 requires the
   recognition of all derivatives (both assets and liabilities) in the balance
   sheet at fair value. Changes in fair value of derivative instruments are
   included in current income or as a component of comprehensive income (outside
   current income) depending on the type of derivative. Implementation of SFAS
   No. 133 is not expected to have a material effect on AFC's financial position
   or results of operations.

   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. ACQUISITIONS AND SALES OF SUBSIDIARIES

   WORLDWIDE INSURANCE COMPANY In April 1999, AFC acquired Worldwide Insurance
   Company for $157 million in cash. Worldwide is a provider of direct response
   private passenger automobile insurance.

   UNITED TEACHER ASSOCIATES In October 1999, AAG acquired United Teacher
   Associates Insurance Company of Austin, Texas ("UTA") for $81 million in
   cash, pending post-closing adjustments under which AAG may receive as much as
   several million dollars. UTA provides supplemental health products and
   retirement annuities, and purchases blocks of insurance policies from other
   insurers.

   GREAT AMERICAN LIFE INSURANCE COMPANY OF NEW YORK AND CONSOLIDATED FINANCIAL
   In February 1999, AAG acquired Great American Life Insurance Company of New
   York, formerly Old Republic Life Insurance Company of New York, for $27
   million in cash. In July 1999, AAG acquired Consolidated Financial
   Corporation, an insurance agency, for $21 million in cash.

   COMMERCIAL LINES DIVISION In connection with the 1998 sale of its Commercial
   lines division to Ohio Casualty Corporation, AFC deferred a gain of $103
   million related to the insurance business ceded which is being recognized
   over the estimated remaining settlement period (weighted average of 4.25
   years) of the claims ceded. AFC may receive up to an additional $40 million
   in mid-2000 based upon the retention and growth through May 31, 2000 of the
   insurance businesses sold.

                                        9

<PAGE>

                       AMERICAN FINANCIAL CORPORATION 10-Q

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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, U.S.-based operations of Japanese companies, 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).

   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.

<TABLE>
<CAPTION>
                                                         Three months ended
                                                               March 31,
                                                       -----------------------
                                                            2000          1999
                                                            ----          ----
<S>                                                    <C>           <C>
      Revenues (a)
      Property and casualty insurance:
        Premiums earned:
          Personal                                      $297,313      $285,817
          Specialty                                      274,823       250,588
          Other lines - primarily discontinued                 1         1,061
                                                        --------      --------
                                                         572,137       537,466
        Investment and other income                      121,167       102,268
                                                        --------      --------
                                                         693,304       639,734
      Annuities and life (b)                             181,488       154,016
      Other                                                5,743         7,018
                                                        --------      --------

                                                        $880,535      $800,768
                                                        ========      ========

<PAGE>

      Operating Profit (Loss)
      Property and casualty insurance:
        Underwriting:
          Personal                                      ($10,933)     $  4,480
          Specialty                                      (10,498)          349
          Other lines - primarily discontinued            (2,515)       (1,413)
                                                        --------      --------
                                                         (23,946)        3,416
        Investment and other income                       89,365        68,689
                                                        --------      --------
                                                          65,419        72,105
      Annuities and life                                  27,988        35,409
      Other (c)                                          (19,770)      (17,690)
                                                        --------      --------

                                                        $ 73,637      $ 89,824
                                                        ========      ========
</TABLE>

      (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.












                                       10

<PAGE>

                       AMERICAN FINANCIAL CORPORATION 10-Q

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

D. INVESTMENT IN INVESTEE CORPORATION Investment in investee corporation
   reflects AFC's ownership of 24 million shares (36%) of Chiquita common stock.
   The market value of this investment was $114 million at March 31, 2000 and
   December 31, 1999. 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,
                                        ----------------------------
                                                    2000        1999
                                                    ----        ----
      Net Sales                                     $658        $693
      Operating Income                                68          77
      Net Income                                      35          49

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,
                                                                 2000            1999
                                                             --------     -----------
<S>                                                         <C>             <C>
      Holding Companies:
         AFC notes payable under bank line                   $110,000        $ 68,000
         APU 10-5/8% Subordinated Notes due April 2000         23,684          23,786
         APU 10-7/8% Subordinated Notes due May 2011           11,648          11,661
         Other                                                  9,677           9,110
                                                             --------        --------

                                                             $155,009        $112,557
                                                             ========        ========

      Subsidiaries:
         AAG 6-7/8% Senior Notes due June 2008               $100,000        $100,000
         AAG notes payable under bank line                     97,000          97,000
         Notes payable secured by real estate                  31,582          31,704
         Other                                                 12,268          11,029
                                                             --------        --------

                                                             $240,850        $239,733
                                                             ========        ========
</TABLE>
<PAGE>

   At March 31, 2000, sinking fund and other scheduled principal payments on
   debt for the balance of 2000 and the subsequent five years were as follows
   (in millions):

                 Holding
               Companies    Subsidiaries            Total
               ---------    ------------         --------
     2000         $ 23.7           $ 2.8           $ 26.5
     2001            -               1.4              1.4
     2002          116.7            38.3            155.0
     2003            -              61.3             61.3
     2004            -              14.2             14.2
     2005            -               9.6              9.6

   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.

   AFC and AAG each have an unsecured credit agreement with a group of banks
   under which they can borrow up to $300 million and $200 million,
   respectively. Borrowings bear interest at floating rates based on prime or
   Eurodollar rates. Loans mature December 2002 under the AFC credit agreement
   and from 2000 to 2003 under the AAG credit agreement.

                                       11

<PAGE>

                       AMERICAN FINANCIAL CORPORATION 10-Q

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

G. MINORITY INTEREST  Minority interest in AFC's balance sheet is
   comprised of the following (in thousands):

                                                      March 31,    December 31,
                                                          2000            1999
                                                      --------     -----------
     Interest of AFG (parent) and noncontrolling
       shareholders in subsidiaries' common stock     $268,009        $270,594
     Preferred securities issued by
       subsidiary trusts                               218,110         219,600
                                                      --------        --------

                                                      $486,119        $490,194
                                                      ========        ========

   TRUST ISSUED PREFERRED SECURITIES Wholly-owned subsidiary trusts of AAG have
   issued $225 million of preferred securities and, in turn, purchased a like
   amount of AAG 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. AAG
   effectively provides unconditional guarantees of its trusts' obligations.

   The preferred securities consisted of the following (in thousands):

<TABLE>
<CAPTION>
      Date of                                        March 31,   December 31,     Optional
      Issuance           Issue (Maturity Date)           2000           1999      Redemption Dates
      -------------      ------------------------    --------    -----------      ----------------------
<S>                     <C>                          <C>            <C>          <C>
      November 1996      AAG 9-1/4% TOPrS (2026)      $73,110        $74,600      On or after 11/7/2001
      March 1997         AAG 8-7/8% Pfd   (2027)       70,000         70,000      On or after 3/1/2007
      May 1997           AAG 7-1/4% ROPES (2041)       75,000         75,000      Prior to 9/28/2000 and
                                                                                    after 9/28/2001
</TABLE>

   In the first quarter of 2000, AAG repurchased $1.5 million of its trust
   preferred securities for $1.3 million in cash.
<PAGE>

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

                                                       Three months ended
                                                             March 31,
                                                       -------------------
                                                         2000         1999
                                                         ----         ----
     Interest of AFG (parent) and noncontrolling
       shareholders in earnings of subsidiaries        $5,192      $ 8,886
     Accrued distributions by subsidiaries on trust
       issued preferred securities, net of tax          3,015        3,076
                                                       ------      -------

                                                       $8,207      $11,962
                                                       ======      =======

                                       12
<PAGE>

                       AMERICAN FINANCIAL CORPORATION 10-Q

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


H. SHAREHOLDERS' EQUITY At March 31, 2000 and December 31, 1999, AFG
   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, 2000 and
   December 31, 1999, 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).

   UNREALIZED LOSS ON MARKETABLE SECURITIES 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>
                    2000
      ----------------------------------------
      Unrealized holding gains (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)
                                                    ======      =====         ====        =====

                    1999
      ----------------------------------------
      Unrealized holding gains (losses) on
      securities arising during the period         ($120.5)     $41.4        $ 9.8       ($69.3)
      Reclassification adjustment for
        realized gains included in net income         (4.4)       1.6           .7         (2.1)
                                                    ------      -----        -----        -----
      Change in unrealized gain (loss) on
        marketable securities, net                 ($124.9)     $43.0        $10.5       ($71.4)
                                                    ======      =====        =====        =====
</TABLE>

I. COMMITMENTS AND CONTINGENCIES There have been no significant changes to the
   matters discussed and referred to in Note L "Commitments and Contingencies"
   of AFC's Annual Report on Form 10-K for 1999.

                                       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 the third quarter of 1999, AFC initiated an enterprise-wide
   study of its information technology ("IT") resources, needs and
   opportunities. AFC expects that the initiative will entail extensive effort
   and costs and may lead to substantial changes in the area, which should
   result in significant cost savings, efficiencies and effectiveness in the
   future. While the costs (most of which will be expensed) will precede any
   savings to be realized, management expects benefits to greatly exceed the
   costs incurred, all of which will be funded through available working
   capital.

   FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of
   1995 encourages corporations to provide investors with information about the
   company's anticipated performance and provides protection from liability if
   future results are not the same as management's expectations. This document
   contains certain forward- looking statements that are based on assumptions
   which management believes are reasonable, but by their nature, inherently
   uncertain. Future results could differ materially from those projected.
   Factors that could cause such differences include, but are not limited to:
   changes in economic conditions especially with regard to availability of and
   returns on capital, regulatory actions, changes in legal environment, levels
   of catastrophe and other major losses, availability of reinsurance, and
   competitive pressures. AFC undertakes no obligation to update any
   forward-looking statements.

   LIQUIDITY AND CAPITAL RESOURCES

   RATIOS AFC's debt to total capital ratio at the parent holding company level
   (excluding amounts due AFG) was approximately 10% at March 31, 2000 and 8% at
   December 31, 1999. Including amounts due AFG, the ratio was 27% at March 31,
   2000 and December 31, 1999.

   AFC's ratio of earnings to fixed charges, excluding and including preferred
   dividends, (on a total enterprise basis) was 3.95 and 3.61 for the first
   three months of 2000 and 4.01 and 3.67 for the entire year of 1999.
<PAGE>

   SOURCES OF FUNDS Management believes the parent holding companies have
   sufficient resources to meet their liquidity requirements through operations.
   If funds generated from operations, including dividends and tax payments from
   subsidiaries, are insufficient to meet fixed charges in any period, these
   companies would be required to generate cash through borrowings, sales of
   securities or other assets, or similar transactions.

                                       14

<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

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

   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. At March 31, 2000, there was $110 million borrowed under
   the line.

   In April 1999, AFC used funds borrowed under its credit agreement with AFG to
   retire outstanding holding company public debt and borrowings under its
   credit line.

   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)
   AFC's ability to obtain financing in capital markets, as well as (iii) the
   sales of certain noncore investments.

   INVESTMENTS Approximately 90% 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, 2000. 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 2000 were $73.6
   million compared to $89.8 million for the first quarter of 1999. A decline in
   property and casualty underwriting results and the absence of realized gains
   were partially offset by increased investment income and other income,
   including sales of certain assets.

   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, U.S.-based operations of Japanese companies, 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,
                                                          -------------------
                                                            2000         1999
                                                            ----         ----
        Net Written Premiums (GAAP)
        ---------------------------
          Personal                                        $349.8       $276.5
          Specialty                                        297.7        248.1
          Other lines                                        -             .2
                                                          ------       ------
                                                          $647.5       $524.8
                                                          ======       ======

        Combined Ratios (GAAP)(*)
        ----------------------
          Personal                                         103.7%        98.5%
          Specialty                                        103.8         99.8
          Aggregate (including discontinued lines)         104.2         99.4

       (*) Combined ratios for the entire year of 1999 were: Personal - 100.7%,
           Specialty - 102.7% and aggregate - 102.0%.

      PERSONAL The Personal group's 26% increase in net written premiums
   reflects $27.5 million in premiums generated by Worldwide (AFC's direct
   marketing channel acquired in April 1999) and expanded writings in certain
   private passenger automobile markets. The combined ratio for 2000 increased
   due to (i) losses from severe storms in certain southern and western states,
   (ii) the impact of a very competitive pricing environment on policies written
   during 1999 and (iii) increased underwriting expenses associated with the
   expansion of the direct and Internet marketing initiatives.
<PAGE>

      SPECIALTY The Specialty group's 20% increase in net written premiums
   reflects the effect of (i) the January 2000 commutation of reinsurance
   agreements relating to the California workers' compensation business which
   were in effect throughout 1999, (ii) rate increases in certain casualty
   markets (particularly California workers' compensation) and (iii) the
   realization of growth opportunities in certain commercial markets. The
   combined ratio for 2000 reflects the effect of a highly competitive pricing
   environment on policies written in 1999.

   LIFE, ACCIDENT AND HEALTH PREMIUMS AND BENEFITS The increase in life,
   accident and health premiums and benefits is due primarily to the acquisition
   of UTA in October 1999.

                                       16

<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

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

   INVESTMENT INCOME Investment income increased $4.1 million (2%) in the first
   three months of 2000 compared to 1999 due primarily to higher average
   investments held.

   OTHER INCOME Other income increased $22.5 million (81%) in the first three
   months of 2000 compared to 1999 due primarily to increased fee income
   generated by certain insurance operations and income from the sale of
   operating assets and lease residuals.

   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.

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

   INTEREST ON BORROWED MONEY Interest expense decreased $1.3 million (8%) in
   the first quarter of 2000 compared to 1999 due to lower average indebtedness.

   OTHER OPERATING AND GENERAL EXPENSES Other operating and general expenses
   increased $16.1 million (21%) in the first three months of 2000 compared to
   1999 due primarily to the inclusion of the operations of UTA following its
   acquisition in late 1999 and increased expenses from certain start-up
   insurance operations.

   INVESTEE CORPORATION Equity in net earnings of investee represents AFC's
   proportionate share of Chiquita's earnings. Chiquita reported net income for
   the first three months of 2000 and 1999 of $35 million and $49 million,
   respectively.

   CUMULATIVE EFFECT OF ACCOUNTING CHANGE In the first quarter of 1999, AAG
   implemented Statement of Position 98-5, "Reporting on the Costs of Start-Up
   Activities." The SOP requires that costs of start-up activities be expensed
   as incurred and that unamortized balances of previously deferred costs be
   expensed and reported as the cumulative effect of a change in accounting
   principle. Accordingly, AFC expensed previously capitalized start-up costs of
   $3.8 million (net of minority interest and taxes) in the first quarter of
   1999.
                    ----------------------------------------

                                     Item 3

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

   As of March 31, 2000, there were no material changes to the information
   provided in AFC's Form 10-K for 1999 under the caption "Exposure to Market
   Risk" in Management's Discussion and Analysis of Financial Condition and
   Results of Operations.
                                       17
<PAGE>

                                     PART II

                                OTHER INFORMATION

                                     Item 6

                        Exhibits and Reports on Form 8-K

(a) Exhibit 27.1 - Financial Data Schedule as of March 31, 2000. For
                   submission in electronic filing only.

(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 12, 2000                    BY: Fred J. Runk
                                    -----------------------------------
                                    Fred J. Runk

                                    Senior Vice President and Treasurer










                               18