<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, 1999                                      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, 1999, 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 20
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q
                                   PART I
                            FINANCIAL INFORMATION

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

                                                      March 31,  December 31,
                                                          1999          1998
Assets:
 Cash and short-term investments                   $   343,232   $   289,944
 Investments:
   Fixed maturities - at market
     (amortized cost - $9,987,367 and $9,920,407)   10,248,767    10,323,407
   Other stocks - at market
     (cost - $214,321 and $207,345)                    442,521       430,345
   Investment in investee corporation                  207,255       192,138
   Policy loans                                        219,341       220,496
   Real estate and other investments                   250,969       268,171
       Total investments                            11,368,853    11,434,557
 
 Recoverables from reinsurers and prepaid
   reinsurance premiums                              1,854,355     1,973,895
 Agents' balances and premiums receivable              596,952       618,198
 Deferred acquisition costs                            489,682       464,047
 Other receivables                                     274,406       318,154
 Assets held in separate accounts                      162,252       120,049
 Prepaid expenses, deferred charges and other assets   332,275       343,554
 Cost in excess of net assets acquired                 282,394       285,469

                                                   $15,704,401   $15,847,867
<PAGE>
Liabilities and Capital:
 Unpaid losses and loss adjustment expenses        $ 4,684,377   $ 4,773,377
 Unearned premiums                                   1,084,399     1,232,848
 Annuity benefits accumulated                        5,482,277     5,449,633
 Life, accident and health reserves                    350,814       341,595
 Payable to American Financial Group, Inc.             212,309       270,500
 Other Long-term debt:
   Holding companies                                   365,384       315,536
   Subsidiaries                                        195,497       176,896
 Liabilities related to separate accounts              162,252       120,049
 Accounts payable, accrued expenses and other
   liabilities                                       1,136,402     1,112,442
       Total liabilities                            13,673,711    13,792,876
 
 Minority interest                                     512,251       524,335
 
 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                                     948,142       943,359
   Retained earnings                                   211,618       157,218
   Net unrealized gain on marketable securities,
     net of deferred income taxes                      276,900       348,300
       Total shareholders' equity                    1,518,439     1,530,656
 
                                                   $15,704,401   $15,847,867


                                  2
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q
                                      
               AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF EARNINGS
                    (In Thousands, Except Per Share Data)


                                                      Three months ended
                                                             March 31,
                                                        1999         1998
Income:
  Property and casualty insurance premiums          $537,466   $  676,172
  Life, accident and health premiums                  25,588       46,816
  Investment income                                  205,460      220,231
  Equity in net earnings of investee                  16,317       13,918
  Realized gains on sales of:
    Securities                                         4,449        7,446
    Investee                                            -           7,704
    Other investments                                   -           6,843
  Other income                                        27,805       37,533
                                                     817,085    1,016,663

Costs and Expenses:
  Property and casualty insurance:
    Losses and loss adjustment expenses              365,829      499,825
    Commissions and other underwriting expenses      168,221      193,605
  Annuity benefits                                    64,941       71,110
  Life, accident and health benefits                  18,879       38,106
  Interest charges on borrowed money                  16,847       17,031
  Minority interest expense                           13,619       12,141
  Other operating and general expenses                76,227       76,699
                                                     724,563      908,517

Earnings before income taxes, extraordinary items
  and cumulative effect of accounting change          92,522      108,146
Provision for income taxes                            34,268       41,736

Earnings before extraordinary items and cumulative
  effect of accounting change                         58,254       66,410

Extraordinary items - loss on prepayment of debt        -            (685)
Cumulative effect of accounting change                (3,854)         -

Net Earnings                                        $ 54,400   $   65,725


                                  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 on    Comprehensive
                                       Stock       Surplus   Earnings   Securities    Income (Loss)
<S>                                 <C>          <C>        <C>          <C>              <C>
Balance at January 1, 1999           $72,154      $952,984   $157,218     $348,300   

 Net earnings                           -             -        54,400         -             $54,400
 Capital contribution from parent       -            3,067       -            -                -
 Change in unrealized                   -             -          -         (71,400)         (71,400)
 Other                                  -            1,716       -            -                -

Balance at March 31, 1999            $72,154      $957,767   $211,618     $276,900         ($17,000)






Balance at January 1, 1998           $72,154      $945,779    $34,350     $341,200

 Net earnings                           -             -        65,725         -             $65,725
 Capital contribution from parent       -            4,177       -            -                -
 Change in unrealized                   -             -          -           8,300            8,300
 Other                                  -               95       -            -                -

Balance at March 31, 1998            $72,154      $950,051   $100,075     $349,500          $74,025
</TABLE>

                                  4
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q

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

                                                          Three months ended
                                                                March 31,
                                                             1999       1998
Operating Activities:
  Net earnings                                           $ 54,400   $ 65,725
  Adjustments:
   Extraordinary items                                       -           685
   Cumulative effect of accounting change                   3,854       -
   Depreciation and amortization                           21,947     24,582
   Annuity benefits                                        64,941     71,110
   Equity in net earnings of investee                     (16,317)   (13,918)
   Realized gains on investing activities                  (7,247)   (35,299)
   Deferred annuity and life policy acquisition costs     (28,236)   (24,263)
   Decrease (increase) in reinsurance and other
     receivables                                          179,424    (34,832)
   Decrease (increase) in other assets                    (10,838)    67,689
   Increase (decrease) in insurance claims and reserves  (133,449)    41,375
   Increase (decrease) in other liabilities                25,935     (5,942)
   Increase in minority interest                            4,634      5,144
   Dividends from investee                                  1,200      1,200
   Other, net                                              (3,030)    (6,140)
                                                          157,218    157,116
Investing Activities:
  Purchases of and additional investments in:
   Fixed maturity investments                            (535,513)  (631,793)
   Equity securities                                      (19,183)   (19,297)
   Subsidiaries                                           (26,636)   (31,000)
   Real estate, property and equipment                    (18,541)   (16,621)
  Maturities and redemptions of fixed maturity
   investments                                            340,961    284,517
  Sales of:
   Fixed maturity investments                             180,604    206,843
   Equity securities                                       15,763      2,781
   Real estate, property and equipment                      2,990     30,043
  Cash and short-term investments of acquired
   subsidiaries, net                                       11,740     21,678
  Decrease in other investments                            21,563      1,281
                                                          (26,252)  (151,568)
<PAGE>
Financing Activities:
  Fixed annuity receipts                                  107,487    107,832
  Annuity surrenders, benefits and withdrawals           (191,124)  (164,034)
  Additional long-term borrowings                          69,150     50,248
  Reductions of long-term debt                               (549)   (32,185)
  Borrowings from AFG                                       3,000       -
  Repayments of borrowings from AFG                       (64,800)       -
  Capital contribution                                      4,667      4,667
  Repurchases of trust preferred securities                (5,509)       -
                                                          (77,678)   (33,472)

Net Increase (Decrease) in Cash and 
  Short-term Investments                                   53,288    (27,924)

Cash and short-term investments at beginning
  of period                                               289,944    231,227

Cash and short-term investments at end of period         $343,232   $203,303


                                  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 "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 40 years.
   
   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
   
   
                                  6
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q
                                      
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
   
   
   associated with the reinsured policies.  AFC's insurance subsidiaries
   report as assets (a) the estimated reinsurance recoverable on unpaid
   losses, including an estimate for losses incurred but not reported, and
   (b) amounts paid to reinsurers applicable to the unexpired terms of
   policies in force.  AFC's insurance subsidiaries also assume reinsurance
   from other companies.  Income on reinsurance assumed is recognized based
   on reports received from ceding reinsurers.
   
      Deferred Acquisition Costs  Policy acquisition costs (principally
   commissions, premium taxes and other underwriting expenses) related to the
   production of new business are deferred ("DPAC").  For the property and
   casualty companies, the deferral of acquisition costs is limited based
   upon their recoverability without any consideration for anticipated
   investment income.  DPAC 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 are modified as necessary
   to reflect actual experience and developing trends.
   
      Assets Held In and Liabilities Related to Separate Accounts  Separate
   account assets and related liabilities represent variable annuity
   deposits.
<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 American Annuity Group, Inc. ("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.
   
   Issuances of Stock by Subsidiaries and Investees  Changes in AFC's equity
   in a subsidiary or an investee caused by issuances of the subsidiary's or
   investee's stock are accounted for as gains or losses where such issuance
   is not a part of a broader reorganization.
   
   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 (approximately
   6% of covered compensation in 1998) 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.
<PAGE>   
   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), 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.  AFC must implement SFAS No. 133 no later than
   January 1, 2000.  SFAS No. 133 establishes accounting and reporting
   standards for derivative instruments, including derivative instruments
   that are embedded in other contracts, and for hedging activities.  SFAS
   No. 133 requires the recognition 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.
   
   Comprehensive Income  Comprehensive income represents the total of net
   earnings plus other comprehensive income.  For AFC, other comprehensive
   income represents the change in net unrealized gain on marketable
   securities net of deferred taxes.
   
   Statement of Cash Flows  For cash flow purposes, "investing activities"
   are defined as making and collecting loans and acquiring and disposing of
   debt or equity instruments and property and equipment.  "Financing
   activities" include 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.
   
   
                                  9
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


B. Segments of Operations  Having sold substantially all of its Commercial
   lines division in December 1998, AFC's property and casualty group is
   engaged primarily in private passenger automobile and specialty insurance
   businesses.  The Personal group consists of the nonstandard auto group
   along with the preferred/standard private passenger auto and other
   personal insurance business.  The Specialty group includes a highly
   diversified group of specialty business units.  AFC's annuity and life
   business markets primarily retirement products as well as life and
   supplemental health insurance.  In addition, AFC has owned significant
   portions of the voting equity securities of Chiquita Brands International,
   Inc. (an investee corporation - see Note C).
   
   The following table (in thousands) shows AFC's revenues and operating
   profit (loss) by significant business segment.  Operating profit (loss)
   represents total revenues less operating expenses.
   
                                                Three months ended March 31,
                                                         1999          1998
      Revenues (a)                               
      Property and casualty insurance:
        Premiums earned:
          Personal                                 $  285,817    $  327,972
          Specialty                                   250,588       336,909
          Other lines (primarily discontinued)          1,061        11,291
                                                      537,466       676,172
        Investment and other income                   102,268       132,301
                                                      639,734       808,473
      Annuities and life (b)                          154,016       188,557
      Other                                             7,018         5,715
                                                      800,768     1,002,745
      Equity in net earnings of investee               16,317        13,918
      
                                                   $  817,085    $1,016,663
      Operating Profit (Loss)
      Property and casualty insurance:
        Underwriting:
          Personal                                 $    4,480    $   11,974
          Specialty                                       349        (9,313)
          Other lines (primarily discontinued)         (1,413)      (19,919)
                                                        3,416       (17,258)
        Investment and other income                    64,528       102,510
                                                       67,944        85,252
      Annuities and life                               26,760        32,054
      Other (c)                                       (18,499)      (23,078)
                                                       76,205        94,228
      Equity in net earnings of investee               16,317        13,918
      
                                                   $   92,522    $  108,146

      (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


C. Investment in Investee Corporation  Investment in investee corporation
   reflects AFC's ownership of 24 million shares (37%) of Chiquita common
   stock.  The market value of this investment was $244 million and
   $229 million at March 31, 1999 and December 31, 1998, respectively.
   Chiquita is a leading international marketer, producer and distributor of
   quality fresh fruits and vegetables and processed foods.  Summarized
   financial information for Chiquita follows (in millions):
   
                                        Three months ended March 31,
                                                   1999        1998
      Net Sales                                    $693        $717
      Operating Income                               77          70
      Net Income                                     49          41
   
D. Payable to American Financial Group  In December 1997, AFC entered into a
   ten-year reciprocal Master Credit Agreement among AFG and several of AFG's
   subsidiary holding companies, including APU and AFC's direct parent, AFC
   Holding Company, under which funds are made available to each other at one
   percent over LIBOR.

E. Other Long-Term Debt  The carrying value of other long-term debt consisted
   of the following (in thousands):

                                                      March 31, December 31,
                                                          1999         1998
      Holding Companies:
       AFC notes payable under bank line              $130,000     $ 80,000
       AFC 9-3/4% Debentures due April 2004             78,575       78,560
       APU 9-3/4% Subordinated Notes due August 1999    89,258       89,467
       APU 10-5/8% Subordinated Notes due April 2000    41,350       41,518
       APU 10-7/8% Subordinated Notes due May 2011      17,457       17,473
       Other                                             8,744        8,518
      
                                                      $365,384     $315,536
      Subsidiaries:
       AAG 6-7/8% Senior Notes due June 2008          $100,000     $100,000
       AAG notes payable under bank line                46,000       27,000
       Notes payable secured by real estate             37,457       37,602
       Other                                            12,040       12,294
      
                                                      $195,497     $176,896

   In April 1999, AFG issued $350 million principal amount of 7-1/8% senior
   debentures due 2009.  The net proceeds from this offering will be used to
   retire (in May) the AFC 9-3/4% debentures due 2004 and to retire (at
   maturity) the APU subordinated notes due in 1999 and 2000.  The remainder
   of the proceeds were used to reduce AFC's revolving bank line of credit.
<PAGE>
   At March 31, 1999, sinking fund and other scheduled principal payments on
   debt for the balance of 1999 and the subsequent five years, adjusted to
   reflect the planned debt retirements, were as follows (in thousands):
   
                  Holding
                Companies   Subsidiaries        Total
      1999         $ -           $ 1,568      $ 1,568
      2000           -             8,685        8,685
      2001           -             1,383        1,383
      2002          5,823          1,267        7,090
      2003           -            47,294       47,294
      2004           -            14,241       14,241


                                  11
<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 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.
   
F. Minority Interest  Minority interest in AFC's balance sheet is comprised
   of the following (in thousands):

                                                March 31,  December 31,
                                                    1999          1998
      Interest of AFG (parent) and
        noncontrolling shareholders
        in subsidiaries' common stock           $292,651      $299,335
      Preferred securities issued by
        subsidiary trusts                        219,600       225,000
      
                                                $512,251      $524,335

   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)       1999          1998    Redemption Dates
  <S>             <C>                       <C>           <C>       <C>
   November 1996   AAG 9-1/4% TOPrS (2026)   74,600        75,000    On or after 11/7/2001
   March 1997      AAG 8-7/8% Pfd   (2027)   70,000        75,000    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 1999, AAG retired $5.4 million of its preferred
   securities for $5.5 million in cash.
<PAGE>   
   Minority Interest Expense  Minority interest expense is comprised of (in
   thousands):
   
                                                 Three months ended
                                                       March 31,
                                                    1999       1998
      Interest of AFG (parent) and
        noncontrolling shareholders
        in earnings of subsidiaries              $ 8,861    $ 7,383
      Accrued distributions by subsidiaries
        on trust issued preferred securities       4,758      4,758
      
                                                 $13,619    $12,141


                                  12
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
   
   
G. Shareholders' Equity
   
   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.  The
   outstanding voting shares of AFC's Preferred Stock consisted of the
   following:
   
       Series J, no par value; $25.00 liquidation value per share; annual
       dividends per share $2.00; redeemable at $25.75 per share beginning
       December 2005 declining to $25.00 at December 2007; 2,886,161 shares
       (stated value $72.2 million) outstanding at March 31, 1999 and
       December 31, 1998.
   
   Unrealized Gain on Marketable Securities  The change in net unrealized
   gain on marketable securities for the three months ended March 31 included
   the following (in millions):
   
                                                             Minority
                                            Pretax   Taxes   Interest      Net
               1999
   Unrealized holding gains (losses) on
     securities arising during the period  ($120.5)  $41.4      $ 9.8   ($69.3)
   Less reclassification adjustment for
     realized gains included in net income    (4.4)    1.6         .7     (2.1)
   Change in net unrealized gain on
     marketable securities                 ($124.9)  $43.0      $10.5   ($71.4)
   
   
               1998
   Unrealized holding gains (losses) on
     securities arising during the period   $ 14.8  ($ 5.0)      $1.0    $10.8
   Less reclassification adjustment for
     realized gains included in net income    (4.3)    1.5         .3     (2.5)
   Change in net unrealized gain on
     marketable securities                  $ 10.5  ($ 3.5)      $1.3    $ 8.3

<PAGE>
H. Extraordinary Items  Extraordinary items represent AFC's proportionate
   share of losses related to debt retirements by the following companies.
   Amounts shown are net of minority interest and income tax benefits (in
   thousands):

                                     Three months ended
                                       March 31, 1998
         Holding Companies:   
          AFC (parent)                     ($ 22)
          APU (parent)                       (14)
         Subsidiaries:
          AAG                               (649)
         
                                           ($685)


                                  13
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


I. 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):

                                    Available     Held to
                                    For Sale    Maturity(a)    Total
      1999
      Purchases                     $535,513    $   -       $535,513
      Maturities and redemptions     340,961        -        340,961
      Sales                          180,604        -        180,604
      
      1998
      Purchases                     $631,717    $     76    $631,793
      Maturities and redemptions     113,955     170,562     284,517
      Sales                          182,883      23,960(b)  206,843
      
      (a) At December 31, 1998, AFC reclassified all of its "held to
          maturity" fixed maturity securities to "available for sale."
      (b) Sold (at a gain of $.5 million) due to significant deterioration
          in the issuers' creditworthiness.

J. Commitments and Contingencies  There have been no significant changes to
   the matters discussed and referred to in Note M "Commitments and
   Contingencies" in AFC's Annual Report on Form 10-K for 1998.

K. Subsequent Event  In April 1999, AFC completed the acquisition of
   Worldwide Insurance Company (formerly Providian Auto and Home Insurance
   Company) for approximately $160 million.  Worldwide is a provider of
   direct response private passenger automobile insurance.


                                  14
<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.
   
   Year 2000 Status  AFC's Year 2000 Project is a corporate-wide program
   designed to ensure that its computer systems and other equipment using
   date-sensitive computer chips will function properly in the year 2000.
   The Project also encompasses communicating with agents, vendors, financial
   institutions and others with which the companies conduct business to
   determine their Year 2000 readiness and resulting effects on AFC.  AFC's
   Year 2000 Project Office monitors and coordinates the work being performed
   by the various business units and reports monthly to the Audit Committee
   of the Board of Directors and more frequently to senior management.
   
   To address the Year 2000 issue, AFC's operations have been divided into
   separate systems groups.  At March 31, 1999, these groups were in the
   process of either (i) modifying their software programs or (ii) replacing
   programs with new software that is Year 2000 compliant.  A majority of the
   groups have met AFC's goal of having program modifications and new
   software installations substantially completed by the end of 1998, with
   testing continuing in and through 1999.  About one-fourth of the groups
   are being "closely watched" because there is some degree of risk that
   critical dates in the project schedule may be missed.  AFC's goal is to
   have Year 2000 testing and new installations for these groups completed
   during mid-1999.  A few groups have experienced significant delays in
   meeting internal project deadlines.  Plans are being modified and
   resources are being redirected towards these groups which are now expected
   to be completed during the third quarter of 1999.
   
   Contingency plans are being developed for certain business processes and
   systems deemed most critical to operations.  These plans provide a
   documented order of actions necessary to keep the business functions
   operating.  Such plans typically include procedures and workflow processes
   for developing and operating contingent databases.  Contingency planning
   for other business processes and systems deemed critical to operations and
   reasonably likely not to be modified on schedule will be completed by mid-
   1999.
<PAGE>   
   Many of the systems being replaced were planned replacements which were
   accelerated due to the Year 2000 considerations.  In addition, a
   significant portion of AFC's Year 2000 Project is being completed using
   internal staff.  Therefore, cost estimates for the Year 2000 Project do
   not represent solely incremental costs.
   
   From the inception of the Year 2000 Project in the early 1990s through
   March 31, 1999, AFC estimates that it has incurred approximately
   $56 million in costs related to the Project, including capitalized costs
   of $13 million for new systems.  During the first three months of 1999,
   $7 million in such costs have been expensed.  AFC estimates that it will
   incur an additional $18 million of such costs in completing the Project,
   about three-fourths of which is projected to be expensed.
   
   
                                  15
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q
                                      
                    Management's Discussion and Analysis
        of Financial Condition and Results of Operations - Continued
   
   
   Projected Year 2000 costs and completion dates are based on management's
   best estimates.  However, there can be no assurances that these estimates
   will be achieved.  Should software modifications and new software
   installations not be completed on a timely basis, the resulting
   disruptions could have a material adverse affect on operations.
   
   AFC's operations could also be affected by the inability of third parties
   such as agents and vendors to become Year 2000 compliant.  While
   assessments of independent agents and evaluations of third party vendors
   are progressing slowly, efforts are being intensified to complete these
   assessments in the second quarter of 1999.  In addition, AFC's property
   and casualty insurance subsidiaries are reviewing the potential impact of
   the Year 2000 issue on insureds as part of their underwriting process.
   They are also reviewing policy forms, issuing clarifying endorsements
   where appropriate and examining coverage issues for Year 2000 exposures.
   While it is possible that Year 2000 claims may emerge in future periods,
   it is not possible to estimate any such amounts.
   
   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, the Year 2000 issue, 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 19% at March 31, 1999
   and 17% at December 31, 1998.  Including amounts due AFG, the ratio was
   28% at March 31, 1999 and December 31, 1998.
   
   AFC's ratio of earnings to fixed charges, excluding and including
   preferred dividends, (on a total enterprise basis) was 4.20 and 3.85 for
   the first three months of 1999 and 3.44 and 3.15 for the entire year of
   1998.
   
   Sources of Funds  Management believes the parent holding companies have
   sufficient resources to meet their liquidity requirements through
   operations in the short-term and long-term future.  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.
<PAGE>   
   AFC has a revolving credit agreement with several banks under which it can
   borrow up to $300 million.  The 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, 1999, there was $130 million
   borrowed under the credit line.  This amount was repaid in May 1999.
   
   
                                  16
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q
                                      
                    Management's Discussion and Analysis
        of Financial Condition and Results of Operations - Continued
   
   
   In April 1999, AFG issued $350 million principal amount of 7-1/8% senior
   debentures due 2009; the proceeds are to be used to retire certain AFC and
   APU public debt and borrowings under AFC's credit line.
   
   Dividend payments from subsidiaries have been very important to the
   liquidity and cash flow of the individual holding companies in the past.
   However, the reliance on such dividend payments has been lessened by the
   combination of (i) strong capital at AFC's insurance subsidiaries (and the
   related decreased likelihood of a need for investment in those companies),
   (ii) the reduction of debt at the holding companies from historical levels
   (and the related decrease in ongoing cash needs for interest and principal
   payments), (iii) AFC's ability to obtain financing in capital markets, as
   well as (iv) the sales of noncore investments.
   
   Investments  Approximately 91% 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, 1999.  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 earnings before extraordinary items and cumulative effect
   of accounting change for the first quarter of 1999 were $93 million
   compared to $108 million for the first quarter of 1998.  While results
   included improvements in underwriting profitability in the property and
   casualty operations and investee earnings, these were more than offset by
   reductions in investment income, realized gains and income from the sale
   of real estate properties.
   
   Property and Casualty Insurance - Underwriting  AFC's property and
   casualty group consists of two major business groups: Personal and
   Specialty.
   
   The Personal group consists of the nonstandard auto group along with the
   preferred/standard private passenger auto and other personal insurance
   business.  The nonstandard automobile insurance companies insure risks not
   typically accepted for standard automobile coverage because of the
   applicant's driving record, type of vehicle, age or other criteria.
<PAGE>   
   The Specialty group includes a highly diversified group of business lines.
   Some of the more significant areas are executive liability, inland and
   ocean marine, U.S.-based operations of Japanese companies, agricultural-
   related coverages, California workers' compensation, nonprofit liability,
   general aviation coverages, fidelity and surety bonds, and umbrella and
   excess coverages.  Commercial lines businesses sold included certain
   coverages in workers' compensation, commercial multi-peril, commercial
   automobile, and umbrella.
   
   
                                  17
<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,
                                            1999        1998
      Net Written Premiums (GAAP)
        Personal                          $276.5      $358.2
        Specialty                          248.1       329.0
        Other lines                           .2         7.7
                                          $524.8      $694.9
      
      Combined Ratios (GAAP)
        Personal                            98.5%       96.3%
        Specialty                           99.8       102.8
        Aggregate (including other lines)   99.4       102.6
   
      Personal  The Personal group's net written premiums for the first
   three months of 1999 were substantially equivalent to the fourth quarter
   of 1998, but $81.7 million (23%) lower than the first quarter of 1998.
   The decline is due primarily to stronger price competition in the personal
   automobile market over the last twelve months.
   
      Specialty  For the first three months of 1999, net written premiums
   for the Specialty group were $80.9 million (25%) below that of the
   comparable 1998 period due primarily to the sale of the Commercial lines
   division in December 1998 and the effect on California workers'
   compensation premiums of a reinsurance agreement implemented during the
   third quarter of 1998.  Excluding these items, the net written premiums
   increased 2% during the first quarter of 1999.
<PAGE>   
   A deferred gain of $103 million on the Commercial lines business ceded to
   Ohio Casualty in December 1998 is being recognized over the estimated
   settlement period (weighted average 4.25 years) of the claims ceded.  The
   Specialty group's underwriting results for the first quarter of 1999
   include $6.7 million in earnings recognized on the ceded business.
   Underwriting results for the first quarter of 1999 also benefited from
   improved underwriting margins in the California workers' compensation
   business and the absence of underwriting losses included in the 1998
   period attributable to the commercial lines sold.
   
   
                                  18
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q
                                      
                    Management's Discussion and Analysis
        of Financial Condition and Results of Operations - Continued
   
   
   Life, Accident and Health Premiums and Benefits  The decrease in life,
   accident and health premiums and benefits reflects primarily the sale of
   AAG's Funeral Services division in September 1998.
   
   Investment Income  Investment income decreased approximately
   $14.8 million (7%) in the first three months of 1999 compared to 1998 due
   primarily to the transfer of investment assets in connection with the
   sales of the Commercial lines division and Funeral Services division in
   1998.
   
   Investee Corporation  Equity in net earnings of investee corporation
   represents AFC's proportionate share of Chiquita's earnings.  Chiquita
   reported net income for the first three months of 1999 of $48.7 million
   compared to $41.1 million for the same period in 1998.
   
   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.
   
   Gain on Sale of Investee  Chiquita's public issuance of shares of its
   common stock in the first quarter of 1998 resulted in a pretax gain to AFC
   of $7.7 million.
   
   Other Income  Other income decreased $9.7 million (26%) in the first three
   months of 1999 compared to 1998 due primarily to a reduction in income
   from the sale of operating real estate assets.
   
   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.
   
   Annuity benefits decreased $6.2 million (9%) in the first quarter of 1999
   compared to the same period in 1998 due primarily to (i) decreases in
   crediting rates, (ii) changes in actuarial assumptions, (iii) the sale of
   the Funeral Services division and (iv) decreased sales and persistency of
   fixed annuities.
   
   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.

<PAGE>          


                                   Item 3
                                      
           Quantitative and Qualitative Disclosure of Market Risk


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


                                  19
<PAGE>
                     AMERICAN FINANCIAL CORPORATION 10-Q
                                   PART II
                              OTHER INFORMATION


                                   Item 6
                                      
                      Exhibits and Reports on Form 8-K


(a) Exhibit 27.1 - Financial Data Schedule as of March 31, 1999.  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 13, 1999                    BY: Fred J. Runk
                                    Fred J. Runk
                                    Senior Vice President and Treasurer


                                  20