--------------------------------------------------------------------------------
                       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, 2003                                                  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

       Indicate by check mark whether the Registrant is an accelerated filer.
Yes  No  X

       As of May 1, 2003, 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 31
--------------------------------------------------------------------------------




<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,
                                                             2003          2002
                                                      -----------   -----------
ASSETS:
  Cash and short-term investments                     $   728,868   $   870,797
  Investments:
    Fixed maturities - at market
      (amortized cost - $10,990,657 and $11,549,710)   11,445,257    12,006,910
    Other stocks - at market
      (cost - $161,045 and $173,933)                      251,245       299,133
    Investment in investee corporations                   211,163          -
    Policy loans                                          213,462       214,852
    Real estate and other investments                     248,957       257,731
                                                      -----------   -----------
        Total investments                              12,370,084    12,778,626

  Recoverables from reinsurers and prepaid
    reinsurance premiums                                2,915,464     2,866,780
  Agents' balances and premiums receivable                484,185       708,327
  Deferred acquisition costs                              815,469       842,070
  Other receivables                                       264,701       306,904
  Variable annuity assets (separate accounts)             431,134       455,142
  Prepaid expenses, deferred charges and other assets     348,071       425,127
  Goodwill                                                173,408       248,683
                                                      -----------   -----------

                                                      $18,531,384   $19,502,456
                                                      ===========   ===========

LIABILITIES AND CAPITAL:
  Unpaid losses and loss adjustment expenses          $ 4,601,287   $ 5,203,831
  Unearned premiums                                     1,543,347     1,847,924
  Annuity benefits accumulated                          6,610,445     6,453,881
  Life, accident and health reserves                      934,274       902,393
  Payable to reinsurers                                   438,406       508,718
  Payable to American Financial Group, Inc.               295,800       310,010
  Long-term debt:
    Holding companies                                     114,723       267,512
    Subsidiaries                                          296,369       296,771
  Variable annuity liabilities (separate accounts)        431,134       455,142
  Accounts payable, accrued expenses and other
    liabilities                                         1,038,415     1,032,079
                                                      -----------   -----------
        Total liabilities                              16,304,200    17,278,261

  Minority interest                                       491,551       494,472
<PAGE>
  Shareholders' Equity:
    Preferred Stock - at liquidation value                 72,154        72,154
    Common Stock, no par value
      - 20,000,000 shares authorized
      - 10,593,000 shares outstanding                       9,625         9,625
    Capital surplus                                       987,899       987,539
    Retained earnings                                     377,155       343,705
    Unrealized gain on marketable securities, net         288,800       316,700
                                                      -----------   -----------
        Total shareholders' equity                      1,735,633     1,729,723
                                                      -----------   -----------

                                                      $18,531,384   $19,502,456
                                                      ===========   ===========



                                        2
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

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


                                                            Three months ended
                                                                 March 31,
                                                           -------------------
                                                               2003       2002
                                                               ----       ----
INCOME:
  Property and casualty insurance premiums                 $542,785   $603,908
  Life, accident and health premiums                         74,110     70,935
  Investment income                                         203,005    220,959
  Realized gains (losses) on:
    Securities                                                2,239    (17,800)
    Subsidiary                                              (39,386)      -
  Other income                                               57,438     47,612
                                                           --------   --------
                                                            840,191    925,614
COSTS AND EXPENSES:
  Property and casualty insurance:
    Losses and loss adjustment expenses                     371,970    442,913
    Commissions and other underwriting expenses             156,437    170,266
  Annuity benefits                                           74,847     75,525
  Life, accident and health benefits                         59,596     55,920
  Annuity and life acquisition expenses                      27,298     24,779
  Interest charges on borrowed money                          9,146     11,094
  Other operating and general expenses                       95,597     88,532
                                                           --------   --------
                                                            794,891    869,029
                                                           --------   --------

Operating earnings before income taxes                       45,300     56,585
Provision for income taxes                                    8,389      2,703
                                                           --------   --------

Net operating earnings                                       36,911     53,882

Minority interest expense, net of tax                        (4,018)    (5,068)
Equity in net earnings (losses) of investees, net of tax        557     (2,734)
                                                           --------   --------
Earnings before cumulative effect of accounting change       33,450     46,080
Cumulative effect of accounting change                         -       (40,360)
                                                           --------   --------

NET EARNINGS                                               $ 33,450   $  5,720
                                                           ========   ========








                                        3
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                 AMERICAN FINANCIAL CORPORATION AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                             (Dollars in Thousands)


<TABLE>
                                                      Common Stock                    Unrealized
                                        Preferred      and Capital       Retained        Gain on
                                            Stock          Surplus       Earnings     Securities             Total
                                        ---------     ------------       --------     ----------        ----------
<S>                                     <C>             <C>            <C>            <C>             <C>

BALANCE AT JANUARY 1, 2003                $72,154         $997,164       $343,705       $316,700        $1,729,723

Net earnings                                 -                -            33,450           -               33,450
Change in unrealized                         -                -              -           (27,900)          (27,900)
                                                                                                        ----------
  Comprehensive income                                                                                       5,550

Capital contribution from parent             -               2,333           -              -                2,333
Other                                        -              (1,973)          -              -               (1,973)
                                          -------         --------       --------       --------        ----------

BALANCE AT MARCH 31, 2003                 $72,154         $997,524       $377,155       $288,800        $1,735,633
                                          =======         ========       ========       ========        ==========





BALANCE AT JANUARY 1, 2002                $72,154         $993,750       $255,127       $156,900        $1,477,931

Net earnings                                 -                -             5,720           -                5,720
Change in unrealized                         -                -              -           (60,900)          (60,900)
                                                                                                        ----------
  Comprehensive income (loss)                                                                              (55,180)

Capital contribution from parent             -               1,533           -              -                1,533
Other                                        -                 210           -              -                  210
                                          -------         --------       --------       --------        ----------

BALANCE AT MARCH 31, 2002                 $72,154         $995,493       $260,847       $ 96,000        $1,424,494
                                          =======         ========       ========       ========        ==========
</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,
                                                        -----------------------
                                                              2003         2002
                                                              ----         ----
OPERATING ACTIVITIES:
  Net earnings                                          $   33,450   $    5,720
  Adjustments:
    Cumulative effect of accounting change                    -          40,360
    Equity in net (earnings) losses of investees              (557)       2,734
    Depreciation and amortization                           41,177       37,888
    Annuity benefits                                        74,847       75,525
    Realized losses on investing activities                 37,130       17,605
    Deferred annuity and life policy acquisition costs     (44,748)     (38,600)
    Increase in reinsurance and other receivables         (195,979)    (119,921)
    Decrease (increase) in other assets                     30,106       (1,590)
    Increase in insurance claims and reserves              235,949      152,361
    Increase in payable to reinsurers                        8,490       30,348
    Increase (decrease) in other liabilities                46,129      (34,655)
    Increase (decrease) in minority interest                  (821)       3,284
    Other, net                                                 631          321
                                                        ----------   ----------
                                                           265,804      171,380
                                                        ----------   ----------
INVESTING ACTIVITIES:
  Purchases of and additional investments in:
    Fixed maturity investments                          (1,817,002)  (1,499,179)
    Equity securities                                       (8,168)        -
    Real estate, property and equipment                     (5,124)      (4,518)
  Maturities and redemptions of fixed maturity
    investments                                            522,366      408,962
  Sales of:
    Fixed maturity investments                             873,948      597,159
    Equity securities                                        1,820        5,164
    Subsidiary                                             186,269         -
    Real estate, property and equipment                        386        1,669
  Cash and short-term investments of former subsidiary     (86,781)        -
  Decrease in other investments                              4,656        3,368
                                                        ----------   ----------
                                                          (327,630)    (487,375)
                                                        ----------   ----------
<PAGE>
FINANCING ACTIVITIES:
  Fixed annuity receipts                                   214,519      169,872
  Annuity surrenders, benefits and withdrawals            (140,294)    (135,912)
  Net transfers from (to) variable annuity assets            8,629       (5,570)
  Additional long-term borrowings                           18,311       41,000
  Reductions of long-term debt                            (171,601)     (20,240)
  Borrowings from AFG                                        1,500        4,400
  Payments to AFG                                          (13,500)     (12,000)
  Capital contribution                                       2,333        2,333
                                                        ----------   ----------
                                                           (80,103)      43,883
                                                        ----------   ----------

NET DECREASE IN CASH AND SHORT-TERM INVESTMENTS           (141,929)    (272,112)

Cash and short-term investments at beginning
  of period                                                870,797      543,644
                                                        ----------   ----------

Cash and short-term investments at end of period        $  728,868   $  271,532
                                                        ==========   ==========






                                        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 a period based on estimated future principal
      payments, including prepayments. Prepayment assumptions are reviewed
      periodically and adjusted to reflect actual prepayments and changes in
      expectations. The most significant determinants of prepayments are the
      difference between interest rates on the underlying mortgages and current
      mortgage loan rates and the structure of the security. Other factors
      affecting prepayments include the size, type and age of underlying
      mortgages, the geographic location of the mortgaged properties and the
      credit worthiness of the borrowers. Variations from anticipated
      prepayments will affect the life and yield of these securities.

      Gains or losses on securities are 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 cost basis of that investment is reduced.
<PAGE>
      Interest income on non-investment grade asset-backed investments is
      recorded at a yield based on projected cash flows. The yield is adjusted
      prospectively to reflect actual cash flows and changes in projected
      amounts. Impairment losses on these investments must be recognized when
      (i) the fair value of the security is less than its cost basis and (ii)
      there has been an adverse change in the expected cash flows. These
      impairment losses are included in realized gains and losses.

      INVESTMENT IN INVESTEE CORPORATIONS Investments in securities of 20%-to
      50%-owned companies are generally carried at cost, adjusted for AFC's
      proportionate share of their undistributed earnings or losses.





                                        6
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


      GOODWILL Goodwill represents the excess of cost of subsidiaries over AFC's
      equity in their underlying net assets. Effective January 1, 2002, AFC
      implemented Statement of Financial Accounting Standards ("SFAS") No. 142,
      under which goodwill is no longer amortized but is subject to an
      impairment test at least annually. As required under SFAS No. 142, AFC
      completed the transitional test for goodwill impairment (as of January 1,
      2002) in the fourth quarter of 2002. The resulting write-down was reported
      by restating first quarter 2002 results for the cumulative effect of a
      change in accounting principle.

      INSURANCE As discussed under "Reinsurance" below, unpaid losses and loss
      adjustment expenses and unearned premiums have not been reduced for
      reinsurance recoverable.

             REINSURANCE Amounts recoverable from reinsurers are estimated in a
      manner consistent with the claim liability associated with the reinsured
      policies. AFC's insurance subsidiaries report as assets (a) the estimated
      reinsurance recoverable on unpaid losses, including an estimate for losses
      incurred but not reported, and (b) amounts paid to reinsurers applicable
      to the unexpired terms of policies in force. Payable to reinsurers
      includes ceded premiums retained by AFC's insurance subsidiaries under
      contracts to fund ceded losses as they become due. AFC's insurance
      subsidiaries also assume reinsurance from other companies. Income on
      reinsurance assumed is recognized based on reports received from ceding
      companies.

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

      DPAC related to annuities and universal life insurance products is
      deferred to the extent deemed recoverable and amortized, with interest, in
      relation to the present value of expected gross profits on the policies.
      To the extent that realized gains and losses result in adjustments to the
      amortization of DPAC related to annuities, such adjustments are reflected
      as components of realized gains. DPAC related to annuities is also
      adjusted, net of tax, for the change in amortization that would have been
      recorded if the unrealized gains (losses) from securities had actually
      been realized. This adjustment is included in "Unrealized gain on
      marketable securities, net" in the shareholders' equity section of the
      Balance Sheet.

      DPAC related to traditional life and health insurance is amortized over
      the expected premium paying period of the related policies, in proportion
      to the ratio of annual premium revenues to total anticipated premium
      revenues.
<PAGE>
             ANNUITY AND LIFE ACQUISITION EXPENSES Annuity and life acquisition
      expenses on the Statement of Earnings consists primarily of amortization
      of DPAC related to the annuity and life, accident and health businesses.
      This line item also includes certain marketing and commission costs that
      are expensed as paid.

             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 direct
      business written; (b) estimates received from ceding reinsurers and
      insurance pools and associations;


                                        7
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


      (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. Establishing
      reserves for asbestos and environmental claims involves considerably more
      judgment than other types of claims due to, among other things,
      inconsistent court decisions, an increase in bankruptcy filings as a
      result of asbestos-related liabilities, novel theories of coverage, and
      judicial interpretations that often expand theories of recovery and
      broaden the scope of coverage.

      Loss reserve liabilities are subject to the impact of changes in claim
      amounts and frequency and other factors. 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. In spite of the
      variability inherent in such estimates, management believes that the
      liabilities for unpaid losses and loss adjustment expenses are adequate.

             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 the original
      projections of investment yields, 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 Great American Financial Resources, Inc. ("GAFRI"), an
      83%-owned subsidiary at March 31, 2003, earns a fee. Investment funds are
      selected and may be changed only by the policyholder, who retains all
      investment risk.

             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.
<PAGE>
             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. Estimates are accrued during the
      period in which premiums are 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.




                                        8
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


      MINORITY INTEREST For balance sheet purposes, minority interest represents
      (i) the interests of noncontrolling shareholders in AFC subsidiaries,
      including preferred securities issued by trust subsidiaries of GAFRI and
      (ii) American Financial Group, Inc.'s ("AFG") direct ownership interest in
      American Premier Underwriters, Inc. ("American Premier" or "APU") and
      American Financial Enterprises, Inc. For income statement purposes,
      minority interest expense represents those shareholders' interest in the
      earnings of AFC subsidiaries as well as AFC preferred dividends and
      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 the AFG Retirement and Savings Plan, a
      defined contribution plan. AFC makes all contributions to the retirement
      fund portion of the plan and matches a percentage of employee
      contributions to the savings fund. Employees have been permitted to direct
      the investment of their contributions to independently managed investment
      funds, while Company contributions have been invested primarily in
      securities of AFG and affiliates. Employees may direct the investment of a
      portion of their vested retirement fund account balances (increasing from
      12.5% in July 2002 to 100% in April 2004) from securities of AFG and its
      affiliates to independently managed investment funds. As of March 31,
      2003, the Plan owned 12% of AFG's outstanding common stock. Company
      contributions are expensed 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 employees earn such
      benefits.

      DERIVATIVES Derivatives included in AFC's Balance Sheet consist primarily
      of investments in common stock warrants (valued at $8.4 million at March
      31, 2003; included in other stocks), the equity-based component of certain
      annuity products (included in annuity benefits accumulated) and related
      call options (included in other investments) designed to be consistent
      with the characteristics of the liabilities and used to mitigate the risk
      embedded in those annuity products. Changes in the fair value of
      derivatives are included in current earnings.
<PAGE>
      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.    ACQUISITIONS AND SALES OF SUBSIDIARIES

      INFINITY PROPERTY AND CASUALTY CORPORATION On December 31, 2002, AFC
      transferred to Infinity Property and Casualty Corporation ("Infinity", a
      newly formed subsidiary) the following subsidiaries involved primarily in
      the issuance of nonstandard auto policies: Atlanta Casualty Company,
      Infinity Insurance Company, Leader Insurance Company and Windsor Insurance
      Company. Effective January 1, 2003, Great American Insurance Company, an
      AFC subsidiary, transferred to Infinity its personal insurance business
      written through independent agents. In February 2003, AFC sold 61% of
      Infinity in a public offering. AFC realized a pretax loss of $39.4 million
      on the sale. In addition, AFC realized a $5.5 million tax benefit related
      to its basis in Infinity stock. The businesses transferred generated
      aggregate net written premiums of approximately $690 million in 2002.

      DIRECT AUTOMOBILE INSURANCE BUSINESS In January 2003, AFC reached an
      agreement to sell two of its subsidiaries that market automobile insurance
      directly to customers. The transaction was completed on April 25, 2003,
      and included the transfer of Great American Insurance's right to renew
      certain of its personal automobile insurance business written on a direct
      basis in selected markets. Premiums generated by the businesses sold were
      approximately $79 million in 2002. AFC does not expect to report a
      significant gain or loss on the sale.

      NEW JERSEY PRIVATE PASSENGER AUTOMOBILE INSURANCE BUSINESS In September
      2002, an AFC subsidiary entered into an agreement under which Palisades
      Safety and Insurance Association and Palisades Insurance Company will
      assume the subsidiary's obligations to renew its private passenger
      automobile insurance business written in New Jersey. As of September 9,
      2002, AFC no longer accepts any new private passenger automobile insurance
      in that state.

      MANHATTAN NATIONAL LIFE INSURANCE On June 28, 2002, GAFRI acquired
      Manhattan National Life Insurance Company ("MNL") from Conseco, Inc. for
      $48.5 million in cash. At December 31, 2002, MNL reinsured 90% of its
      in-force business.

















                                       10
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


C.    SEGMENTS OF OPERATIONS AFC's property and casualty group writes primarily
      specialized commercial products for businesses through a highly
      diversified group of specialty business units. Some of the more
      significant areas are inland and ocean marine, California workers'
      compensation, agricultural-related coverages, executive and professional
      liability, fidelity and surety bonds, collateral protection, and umbrella
      and excess coverages. In February 2003, AFC sold a substantial portion of
      its Personal segment; see Note B - "Acquisitions and Sales of
      Subsidiaries." The Personal group wrote nonstandard and preferred/standard
      private passenger auto and other personal insurance coverage. AFC's
      annuity, life and health business markets primarily retirement products as
      well as life and supplemental health insurance.
<PAGE>
      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,
                                                 ------------------------
                                                     2003            2002
                                                     ----            ----
        REVENUES (a)
        Property and casualty insurance:
          Premiums earned:
            Specialty                            $427,848        $356,415
            Personal                              114,938         247,203
            Other lines                                (1)            290
                                                 --------        --------
                                                  542,785         603,908
          Investment and other income             120,050         100,259
                                                 --------        --------
                                                  662,835         704,167
        Annuities, life and health (b)            218,446         217,422
        Other                                     (41,090)          4,025
                                                 --------        --------
                                                 $840,191        $925,614
                                                 ========        ========

        OPERATING PROFIT (LOSS)
        Property and casualty insurance:
          Underwriting:
            Specialty                            $  9,521        $  5,294
            Personal                                5,212          (5,239)
            Other lines (c)                          (355)         (9,326)
                                                 --------        --------
                                                   14,378          (9,271)
          Investment and other income              71,290          63,251
                                                 --------        --------
                                                   85,668          53,980
        Annuities, life and health                 15,563          21,981
        Other (d)                                 (55,931)        (19,376)
                                                 --------        --------
                                                 $ 45,300        $ 56,585
                                                 ========        ========

        (a)  Revenues include sales of products and services as well as other
             income earned by the respective segments.
        (b)  Represents primarily investment income.
        (c)  Represents development of lines in "run-off"; AFC has ceased
             underwriting new business in these operations.
        (d)  Includes holding company expenses.








                                       11

<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


D.    INVESTMENT IN INVESTEES Investment in investee corporations reflects AFC's
      ownership of 7.9 million shares (38%) of Infinity common stock and a $55
      million 8.5% note receivable from Infinity. The market value of the
      investment in Infinity stock was $143 million at March 31, 2003 and $165
      million at May 1, 2003. Prior to AFC's sale of 12.5 million shares of
      Infinity in February 2003, an AFC subsidiary owned 100% of Infinity (see
      Note B). Infinity is a national provider of personal automobile insurance
      with an emphasis on the nonstandard market.

      Summarized financial information for Infinity is shown below for the three
      months ended March 31, 2003 (in millions).

                      Earned premiums         $165.5
                      Total revenues           181.0
                      Net earnings              11.5

      Equity in net earnings (losses) of investees for the first quarter of 2002
      represents AFC's share of the losses from two start-up manufacturing
      businesses that were formerly subsidiaries. One of these businesses was
      sold in the fourth quarter of 2002; equity in the net loss of the
      remaining business for the first quarter of 2003 was $865,000.

E.    GOODWILL  Effective January 1, 2002, goodwill is no longer amortized but
      is subject to annual impairment testing under a two step process.  Under
      the first step, an entity's net assets are classified by reporting units
      and compared to their fair value. Fair value is estimated based primarily
      on the present value of expected future cash flows.  If the carrying
      amount of a reporting unit exceeds its fair value, the second step of the
      goodwill impairment test is performed to measure the amount of impairment
      loss, if any.  The second step of the initial impairment test, measuring
      the amount of impairment loss, was completed in the fourth quarter with
      a resulting $40.4 million impairment charge, net of tax, reported by
      restating first quarter 2002 results for the cumulative effect of a
      change in accounting principle.  The impairment charge included
      $21.2 million (pretax) for the annuities and life insurance segment
      related to a decrease in estimated future earnings based upon lower
      forecasted new business sales over the next few years and $39.6 million
      (pretax) for the personal lines segment related primarily to planned
      future reductions in new business volume written through the direct
      channel.

      The change in goodwill during the first quarter of 2003 reflects $75.3
      million in goodwill related to Infinity, which was sold in February 2003.
<PAGE>
      Included in deferred acquisition costs in AFC's Balance Sheet are $68.4
      million and $66.8 million at March 31, 2003, and December 31, 2002,
      respectively, representing the present value of future profits ("PVFP")
      related to acquisitions by AFC's annuity and life business. The PVFP
      amounts are net of $59.5 million and $57.3 million of accumulated
      amortization. Amortization of the PVFP was $2.2 million and $1.7 million
      during the first three months of 2003 and 2002. During each of the next
      five years, the PVFP is expected to decrease at a rate of approximately
      13% of the balance at the beginning of each respective year.









                                       12
<PAGE>
                      AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


F.    PAYABLE TO AMERICAN FINANCIAL GROUP Payable to AFG represents the net
      amount owed by AFC to AFG under a reciprocal Master Credit Agreement
      between various AFG holding companies under which these companies make
      funds available to each other for general corporate purposes. Amounts
      borrowed under the Master Credit Agreement generally bear interest at 1%
      over LIBOR. In January 2003, AFC agreed to guarantee the obligations of
      AFG with respect to $382 million principal amount of AFG senior
      debentures, in consideration of a payment of approximately $350,000 and an
      increase in the interest rate which AFG pays AFC under the Master Credit
      Agreement to 1.125% over LIBOR.

G.    LONG-TERM DEBT The carrying value of long-term debt consisted of the
      following (in thousands):
                                                        March 31,   December 31,
                                                            2003           2002
                                                        --------    -----------
        HOLDING COMPANIES:
          AFC notes payable under bank line             $ 95,000       $248,000
          APU 10-7/8% Subordinated Notes due May 2011     11,482         11,498
          Other                                            8,241          8,014
                                                        --------       --------

                                                        $114,723       $267,512
                                                        ========       ========
        SUBSIDIARIES:
          GAFRI 6-7/8% Senior Notes due June 2008       $100,000       $100,000
          GAFRI notes payable under bank line            148,600        148,600
          Notes payable secured by real estate            35,457         35,610
          Other                                           12,312         12,561
                                                        --------       --------

                                                        $296,369       $296,771
                                                        ========       ========

      At March 31, 2003, scheduled principal payments on debt for the balance of
      2003 and the subsequent five years were as follows (in millions):

                           Holding
                         Companies    Subsidiaries        Total
                         ---------    ------------       ------
                2003         $  -           $  9.5       $  9.5
                2004            -            150.6        150.6
                2005          95.0            11.2        106.2
                2006            -             19.4         19.4
                2007           5.3              .1          5.4
                2008            -            100.1        100.1

      AFC may borrow up to $280 million under its credit agreement; the line may
      be expanded to $300 million through the end of 2003. The new line consists
      of two facilities: a 364-day revolving facility, extendable annually, for
      one-third of the total line and a three-year revolving facility for the
      remaining two-thirds. Amounts borrowed bear interest at rates ranging from
      1.25% to 2.25% over LIBOR based on AFG's credit rating. In addition, GAFRI
      has an unsecured credit agreement under which it can borrow up to $155
      million at floating rates based on prime or Eurodollar rates through
      December 2004.
<PAGE>
H.    MINORITY INTEREST Minority interest in AFC's balance sheet is comprised
      of the following (in thousands):
                                                         March 31,  December 31,
                                                             2003          2002
                                                         --------   -----------
       Interest of AFG (parent) and noncontrolling
         shareholders in subsidiaries' common stock      $348,638      $351,559
       Preferred securities issued by subsidiary trusts   142,913       142,913
                                                         --------      --------
                                                         $491,551      $494,472
                                                         ========      ========


                                       13
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


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

      The preferred securities consisted of the following (in thousands):
<TABLE>
                                                   Amount Outstanding
      Date of                                      ------------------     Optional
      Issuance         Issue (Maturity Date)       3/31/03   12/31/02     Redemption Dates
      -------------    ------------------------    -------   --------     --------------------
<S>                  <C>                         <C>        <C>         <C>
      November 1996    GAFRI 9-1/4% TOPrS (2026)   $72,913    $72,913     Currently redeemable
      March 1997       GAFRI 8-7/8% Pfd   (2027)    70,000     70,000     On or after 3/1/2007
</TABLE>
      MINORITY INTEREST EXPENSE Minority interest expense is comprised of (in
      thousands):

                                                          Three months ended
                                                               March 31,
                                                          ------------------
                                                            2003        2002
                                                            ----        ----
           Interest of AFG (parent) and noncontrolling
             shareholders in earnings of subsidiaries     $1,912      $2,962
           Accrued distributions by subsidiaries
             on preferred securities, net of tax           2,106       2,106
                                                          ------      ------
                                                          $4,018      $5,068
                                                          ======      ======

I.    SHAREHOLDERS' EQUITY At March 31, 2003, and December 31, 2002, American
      Financial Group beneficially owned all of the outstanding shares of AFC's
      Common Stock.

      PREFERRED STOCK See Note K - "Subsequent Event." 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, 2003, and December 31, 2002, the
      outstanding voting shares of AFC's Preferred Stock consisted of the
      following:

          SERIES J, no par value; $25.00 liquidating value per share; annual
          dividends per share $2.00; redeemable at AFC's option at $25.75 per
          share beginning December 2005 declining to $25.00 at December 2007 and
          thereafter; 2,886,161 shares (stated value $72.2 million) outstanding
          at March 31, 2003, and December 31, 2002.
<PAGE>
J.    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 2002.

K.    SUBSEQUENT EVENT On April 17, 2003, AFG announced a proposal to merge
      with AFC.  Under the proposal, AFC Series J Preferred shareholders would
      receive $22.00 in AFG common stock in exchange for each share of Series J
      Preferred Stock.  This transaction is subject to (i) the negotiation of
      specific terms and final documentation, (ii) the approval of the Board of
      Directors of each of AFG, AFC, and a special committee of independent
      directors of AFC, and (iii) the receipt of all required shareholder,
      stock exchange listing and regulatory approvals.  In addition, the merger
      would eliminate the deferred tax liabilities associated with AFC's
      holding of AFG stock.  Assuming that the proposed transaction is
      completed, these changes are expected to result in a 12% to 15% increase
      in AFG's shareholders' equity.  AFG and AFC hope to complete the merger
      in the third quarter of 2003.


                                       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.

      FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of
      1995 provides a safe harbor for forward-looking statements. Some of the
      forward-looking statements can be identified by the use of forward-looking
      words such as "anticipates", "believes", "expects", "estimates",
      "intends", "plans", "seeks", "could", "may", "should", "will" or the
      negative version of those words or other comparable terminology. Examples
      of such forward-looking statements include statements relating to:
      expectations concerning market and other conditions and their effect on
      future premiums, revenues, earnings and investment activities;
      recoverability of asset values; expected losses and the adequacy of
      reserves for asbestos, environmental pollution and mass tort claims; rate
      increases, improved loss experience and expected expense savings resulting
      from recent initiatives.
<PAGE>
      Actual results could differ materially from those contained in or implied
      by such forward-looking statements for a variety of factors including:

        o   changes in economic conditions, including interest rates,
            performance of securities markets, and the availability of capital;
        o   regulatory actions;
        o   changes in legal environment;
        o   tax law changes;
        o   levels of natural catastrophes, terrorist events, incidents of war
            and other major losses;
        o   the ultimate amount of liabilities associated with certain asbestos
            and environmental-related claims;
        o   the unpredictability of possible future litigation if certain
            settlements do not become effective;
        o   adequacy of insurance reserves;
        o   trends in mortality and morbidity;
        o   availability of reinsurance and ability of reinsurers to pay their
            obligations;
        o   competitive pressures, including the ability to obtain rate
            increases; and
        o   changes in debt and claims paying ratings.

      The forward-looking statements herein are made only as of the date of this
      report. AFC assumes no obligation to publicly update any forward-looking
      statements.








                                       15
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      CRITICAL ACCOUNTING POLICIES

      Significant accounting policies are summarized in Note A to the financial
      statements. The preparation of financial statements requires management to
      make estimates and assumptions that can have a significant effect on
      amounts reported in the financial statements. As more information becomes
      known, these estimates and assumptions could change and thus impact
      amounts reported in the future. Management believes that the establishment
      of insurance reserves, especially asbestos and environmental-related
      reserves, and the determination of "other than temporary" impairment on
      investments are the two areas where the degree of judgment required to
      determine amounts recorded in the financial statements make the accounting
      policies critical. For further discussion of these policies, see
      "Liquidity and Capital Resources - Investments" and "Liquidity and Capital
      Resources - Uncertainties."

      LIQUIDITY AND CAPITAL RESOURCES

      RATIOS AFG's debt to total capital ratio at the parent holding company
      level (excluding amounts due AFG) was approximately 6% at March 31, 2003,
      and 13% at December 31, 2002. Including amounts due AFG, the ratio was 19%
      at March 31, 2003, and 25% at December 31, 2002.

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

      AFC may borrow up to $280 million under the bank credit line; the line may
      be expanded to $300 million through the end of 2003. The line consists of
      two facilities: a 364-day revolving facility, extendable annually, for
      one-third of the total line and a three-year revolving facility for the
      remaining two-thirds. Amounts borrowed bear interest at rates ranging from
      1.25% to 2.25% over LIBOR based on AFG's credit rating. This credit
      agreement provides ample liquidity and can be used to obtain funds for
      operating subsidiaries or, if necessary, for the parent companies. At
      March 31, 2003, there was $95 million borrowed under the line.

      INVESTMENTS  AFC's investment portfolio at March 31, 2003, contained
      $11.4 billion in "Fixed maturities" and $251.2 million in "Other stocks",
      all carried at market value with unrealized gains and losses reported as a
      separate component of shareholders' equity on an after-tax basis. At March
      31, 2003, AFC had pretax net unrealized gains of $454.6 million on fixed
      maturities and $90.2 million on other stocks.
<PAGE>
      Approximately 93% of the fixed maturities held by AFC at March 31, 2003,
      were rated "investment grade" (credit rating of AAA to BBB) by nationally
      recognized rating agencies. Investment grade securities generally bear
      lower yields and lower degrees of risk than those that are unrated and
      noninvestment grade. Management believes that a high quality investment
      portfolio is more likely to generate a stable and predictable investment
      return.

      Individual portfolio securities are sold creating gains or losses as
      market opportunities exist. Since all of these securities are carried at
      market value in the balance sheet, there is virtually no effect on
      liquidity or financial condition upon the sale and ultimate realization of
      unrealized gains and losses.

                                       16


<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      Summarized information for the unrealized gains and losses recorded in
      AFC's balance sheet at March 31, 2003, is shown in the following table
      (dollars in millions). Approximately $133 million of "Fixed maturities"
      and $16 million of "Other stocks" had no unrealized gains or losses at
      March 31, 2003.

<TABLE>
                                                                Securities      Securities
                                                                   With            With
                                                                Unrealized      Unrealized
                                                                   Gains          Losses
                                                                ----------      ----------
<S>                                                            <C>             <C>
         Fixed Maturities
         ----------------
           Market value of securities                              $10,232          $1,080
           Amortized cost of securities                            $ 9,692          $1,165
           Gross unrealized gain (loss)                            $   540         ($   85)
           Market value as % of amortized cost                         106%             93%
           Number of security positions                              1,742             316
           Number individually exceeding
             $2 million gain or loss                                    15               8
           Concentration of gains (losses) by
             type or industry (exceeding 5% of
             unrealized):
               Mortgage-backed securities                          $ 120.7         ($  7.7)
               Banks and savings institutions                         43.9             (.5)
               U.S. government and government agencies                41.2              -
               Electric services                                      38.8            (3.0)
               State and municipal                                    33.6            (5.5)
               Asset-backed securities                                15.0            (9.7)
               Air transportation (generally collateralized)           4.3           (34.0)
           Percentage rated investment grade                            96%             67%

         Other Stocks
         ------------
           Market value of securities                              $   208          $   28
           Cost of securities                                      $   115          $   31
           Gross unrealized gain (loss)                            $    93         ($    3)
           Market value as % of cost                                   181%             90%
           Number individually exceeding
             $2 million gain or loss                                     2              -
</TABLE>
      AFC's investment in equity securities of Provident Financial Group, a
      Cincinnati-based commercial banking and financial services company,
      represents $83 million of the $93 million in unrealized gains on other
      stocks at March 31, 2003.





                                       17
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      The table below sets forth the scheduled maturities of fixed maturity
      securities at March 31, 2003, based on their market values. Asset backed
      securities and other securities with sinking funds are reported at average
      maturity. Actual maturities may differ from contractual maturities because
      certain securities may be called or prepaid by the issuers.

                                                      Securities     Securities
                                                         With           With
                                                      Unrealized     Unrealized
           Maturity                                      Gains         Losses
           --------                                   ----------     ----------
             One year or less                              4%             2%
             After one year through five years            21             24
             After five years through ten years           33             38
             After ten years                               9             23
                                                         ---            ---
                                                          67             87
             Mortgage-backed securities                   33             13
                                                         ---            ---
                                                         100%           100%
                                                         ===            ===

      AFC realized aggregate losses of $1.9 million during the first quarter of
      2003 on $12.7 million in sales of fixed maturity securities (3
      issues/issuers) that had individual unrealized losses greater than
      $500,000 at December 31, 2002. Market values of two of the issues
      increased an aggregate of $3 million from December 31 to date of sale. The
      market value of the remaining security decreased $263,000 from December 31
      to the sale date.

      Although AFC had the ability to continue holding these investments, its
      intent to hold them changed due primarily to deterioration in the issuers'
      creditworthiness, decisions to lessen exposure to a particular credit or
      industry, or to modify asset allocation within the portfolio.


















                                       18
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      The table below (dollars in millions) summarizes the length of time
      securities have been in an unrealized gain or loss position at March 31,
      2003.
<TABLE>
                                                                                    Market
                                                        Aggregate    Aggregate    Value as
                                                           Market   Unrealized   % of Cost
                                                            Value  Gain (Loss)       Basis
                                                        ---------  -----------   ---------
<S>                                                    <C>           <C>         <C>
     Fixed Maturities
     ----------------------------------------------
     SECURITIES WITH UNREALIZED GAINS:
        Exceeding $500,000 at 3/31/03 and for:
         Less than one year (333 issues)                  $ 4,770         $305       106.8%
         More than one year (48 issues)                       563           57       111.3
       Less than $500,000 at 3/31/03 (1,361 issues)         4,899          178       103.8
                                                          -------         ----
                                                          $10,232         $540       105.6%
                                                          =======         ====

     SECURITIES WITH UNREALIZED LOSSES:
       Exceeding $500,000 at 3/31/03 and for:
         Less than one year (30 issues)                   $   190        ($ 36)       84.1%
         More than one year (17 issues)                       102          (31)       76.7
       Less than $500,000 at 3/31/03 (269 issues)             788          (18)       97.8
                                                          -------         ----
                                                          $ 1,080        ($ 85)       92.7%
                                                          =======         ====

     Other Stocks
     ----------------------------------------------
     SECURITIES WITH UNREALIZED GAINS:
       Exceeding $500,000 at 3/31/03 and for:
         Less than one year (3 issues)                    $    17         $  5       141.7%
         More than one year (3 issues)                        159           85       214.9
       Less than $500,000 at 3/31/03 (71 issues)               32            3       110.3
                                                          -------         ----
                                                          $   208         $ 93       180.9%
                                                          =======         ====

     SECURITIES WITH UNREALIZED LOSSES:
       Exceeding $500,000 at 3/31/03 and for:
         Less than one year (none)                        $  -            $ -           - %
         More than one year (none)                           -              -           -
       Less than $500,000 at 3/31/03 (75 issues)               28           (3)       90.3
                                                          -------         ----
                                                          $    28        ($  3)       90.3%
                                                          =======         ====
</TABLE>

<PAGE>
      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
      (accounted for as a realized loss) and the cost basis of that investment
      is reduced. The determination of whether unrealized losses are "other than
      temporary" requires judgment based on subjective as well as objective
      factors. A listing of factors considered and resources used is contained
      in the discussion of "Investments" under Management's Discussion and
      Analysis in AFC's 2002 Form 10-K.

      Based on its analysis, management believes (i) AFC will recover its cost
      basis in the securities with unrealized losses and (ii) that AFC has the
      ability and intent to hold the securities until they mature or recover in
      value. Should either of these beliefs change with regard to a particular
      security, a charge for impairment would likely be required. While it is
      not possible to accurately predict if or when a specific security will
      become impaired, charges for other than temporary impairment could be
      material to results of operations in a future period. Management believes
      it is not likely that future impairment charges will have a significant
      effect on AFC's liquidity.

      UNCERTAINTIES As more fully explained in the following paragraphs,
      management believes that the areas posing the greatest risk of material
      loss are the adequacy of its insurance reserves and American Premier's
      contingencies arising out of its former operations.

                                       19
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      PROPERTY AND CASUALTY INSURANCE RESERVES The liabilities 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 periods on 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 expense for investigating and
      adjusting claims; and (e) the current state of law and coverage
      litigation. Using these items as well as historical trends adjusted for
      changes in underwriting standards, policy provisions, product mix and
      other factors, company actuaries determine a single or "point" estimate
      which management utilizes in recording its best estimate of the
      liabilities. Ranges of loss reserves are not developed by company
      actuaries.

      Estimating the liability for unpaid losses and LAE is inherently
      judgmental and is influenced by factors which are subject to significant
      variation. Through the use of analytical reserve development techniques,
      management utilizes items such as the effect of inflation on medical,
      hospitalization, material, repair and replacement costs, general economic
      trends and the legal environment.

      Quarterly reviews of unpaid loss and LAE reserves are prepared using
      standard actuarial techniques. These may include: Case Incurred
      Development Method; Paid Development Method; Bornhuetter-Ferguson Method;
      and Incremental Paid LAE to Paid Loss Methods. Generally, data is
      segmented by major product or coverage within product using countrywide
      data; however, in some situations data may be reviewed by state for large
      volume states.

            ASBESTOS AND ENVIRONMENTAL-RELATED ("A&E") RESERVES Establishing
      reserves for A&E claims relating to policies and participations in
      reinsurance treaties and former operations is subject to uncertainties
      that are significantly greater than those presented by other types of
      claims. For this group of claims, traditional actuarial techniques that
      rely on historical loss development trends cannot be used. Case reserves
      and expense reserves are established by the claims department as specific
      policies are identified. In addition to the case reserves established for
      known claims, management establishes additional reserves for claims not
      yet known or reported and for possible development on known claims. These
      additional reserves are management's best estimate based on its review of
      industry trends and other industry information about such claims, with due
      consideration to individual claim situations like the A.P. Green case
      discussed below. Estimating ultimate liability for asbestos claims
      presents a unique and difficult challenge to the insurance industry due
      to, among other things, inconsistent court decisions, an increase in
      bankruptcy filings as a result of asbestos-related liabilities, novel
      theories of coverage, and judicial interpretations that often expand
      theories of recovery and broaden the scope of coverage. The casualty
      insurance industry is engaged in extensive litigation over these coverage
      and liability issues as the volume and severity of claims against asbestos
      defendants continue to increase.
<PAGE>
      While management believes that AFC's reserves for A&E claims are a
      reasonable estimate of ultimate liability for such claims, actual results
      may vary materially from the amounts currently recorded due to the
      difficulty in predicting the number of future claims and the impact of
      recent bankruptcy filings, and unresolved issues such as whether coverage
      exists, whether policies are subject to aggregate limits on coverage,
      whether claims are to be allocated among triggered policies and implicated
      years, and whether claimants who exhibit no signs of illness will be
      successful in pursuing their claims.



                                       20

<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      In February 2003, Great American Insurance Company entered into an
      agreement for the settlement of asbestos related coverage litigation under
      insurance polices issued during the 1970's and 1980's to Bigelow-Liptak
      Corporation and related companies, subsequently known as A.P. Green
      Industries, Inc. ("A.P. Green"). Management believes that this settlement
      will enhance financial certainty and provides resolution to litigation
      that represents AFC's largest known asbestos-related claim and the only
      such claim that management believes to be material.

      The settlement is for $123.5 million (Great American has the option to pay
      in cash or over time with 5.25% interest), all of which is covered by
      reserves established prior to 2003, and anticipated reinsurance
      recoverables for this matter. The agreement allows up to 10% of the
      settlement to be paid in AFG common stock.

      The settlement is subject to a number of contingencies, including the
      approval of the bankruptcy court supervising the reorganization of A.P.
      Green and subsequent confirmation of a plan of reorganization that
      includes an injunction prohibiting the assertion against Great American of
      any present or future asbestos personal injury claims under policies
      issued to A.P. Green and related companies. This process could take a year
      or more and no assurance can be made that all of these consents and
      approvals will be obtained; no payments are required until completion of
      the process. If not obtained, the outcome of this litigation will again be
      subject to the complexities and uncertainties associated with a Chapter 11
      proceeding and asbestos coverage litigation.

      RESULTS OF OPERATIONS

      GENERAL Results of operations as shown in the accompanying financial
      statements are prepared in accordance with generally accepted accounting
      principles. Many investors and analysts focus on "core earnings" of
      companies, setting aside certain items included in net earnings such as
      realized gains and losses, the cumulative effect of accounting changes and
      certain other unusual items. Realized gains and losses are excluded from
      "core earnings" because they are unpredictable and not necessarily
      indicative of current operating fundamentals. Other items, such as the tax
      resolution benefits, are excluded to assist investors in analyzing their
      impact on the trend in operating results. Nonetheless, these items are
      significant components of AFC's overall financial results.







                                       21
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      The following table shows AFC's net earnings as stated in the Statement of
      Earnings as well as the after-tax effect of certain items included in
      these GAAP measures that are typically excluded in deriving "core
      earnings" (in millions):

                                                         Three months ended
                                                               March 31,
                                                         ------------------
                                                          2003         2002

     NET EARNINGS                                        $33.5        $ 5.7
     After tax income (expense) items included in
       net earnings:
         Special tax benefits                              5.5         16.0
         Net losses from non-insurance investees           (.9)        (2.7)
         Realized investment losses                      (19.3)        (7.7)
         Cumulative effect of accounting changes            -         (40.4)

      In addition to the effects of items shown in the table above, net earnings
      increased in 2003 primarily due to significantly improved underwriting
      results in the property and casualty operations, partially offset by lower
      investment income.

      PROPERTY AND CASUALTY INSURANCE - UNDERWRITING AFC's property and casualty
      group has consisted of two major business groups: Specialty and Personal.
      See Note B, "Acquisitions and Sales of Subsidiaries," to the Financial
      Statements for a discussion of the sale of nearly all of the Personal
      group.

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

      The Personal group wrote 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 an applicant's driving record,
      type of vehicle, age or other criteria.

      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.




                                       22
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


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

                                                        Three months ended
                                                             March 31,
                                                        ------------------
                                                           2003       2002
                                                           ----       ----
                  Gross Written Premiums (GAAP)
                  -----------------------------
                    Specialty                            $676.8     $562.8
                    Personal (a)                          181.1      347.5
                    Other lines                              -          .3
                                                         ------     ------
                                                         $857.9     $910.6
                                                         ======     ======

                  Net Written Premiums (GAAP)
                  ---------------------------
                    Specialty                            $438.8     $386.7
                    Personal (a)                          117.9      256.4
                    Other lines                              -          .3
                                                         ------     ------
                                                         $556.7     $643.4
                                                         ======     ======

                  Combined Ratios (GAAP)
                  ----------------------
                    Specialty                              97.9%      98.5%
                    Personal                               95.5      102.1
                    Aggregate (including
                      discontinued lines)                  97.4      101.4

                 (a)  Includes the operations of Infinity through the sale date
                      in mid-February 2003.

      SPECIALTY The Specialty group's gross written premiums increased 20% for
      the first quarter of 2003 over the comparable 2002 period, reflecting the
      impact of continuing rate increases and volume growth in most of its
      businesses. Specialty rate increases averaged 27% during the first three
      months of 2003. Net written premiums increased 14% for the first quarter
      over the comparable 2002 period. Strong growth in gross written premiums
      was offset by the timing impact of premiums ceded under certain
      reinsurance agreements.

      The Specialty group reported an underwriting profit of $9.5 million for
      the 2003 first quarter with a combined ratio of 97.9%, an improvement of
      .6 points over the 2002 first quarter. The group's underwriting results
      for the 2003 quarter included approximately $5.1 million, or 1.2 points,
      of losses from severe weather compared to about $2.6 million, or .7
      points, in the 2002 period.
<PAGE>
      PERSONAL The Personal group results represent primarily Infinity's
      underwriting results through the public offering in mid-February 2003 and
      the direct-to-consumer auto business, which was sold in April 2003. AFC's
      ongoing personal lines business is limited to two subsidiaries that
      generated less than $35 million in net written premiums in 2002 and
      certain direct-to-consumer business in run-off that had approximately $28
      million in net written premiums in 2002. AFC's 38% continuing ownership
      interest in Infinity is accounted for as an investee corporation.
      Accordingly, AFC's share of Infinity's earnings following the mid-February
      public offering is included in equity in net earnings (losses) of
      investees in the Statement of Earnings.

      The Personal group generated an underwriting profit of $5.2 million in the
      2003 first quarter. The group's combined ratio of 95.5% improved 6.6
      points compared with the 2002 quarter, reflecting Infinity's reduced
      underwriting in unprofitable states, the continuing positive effects of
      recent rate increases and recent expense reductions from consolidating
      business functions.

                                       23
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      INVESTMENT INCOME The decrease in investment income for the first quarter
      of 2003 compared to the 2002 quarter reflects lower average investment
      balances (due to the mid-February sale of Infinity) as well as lower
      average yields on fixed maturity investments.

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

      GAINS (LOSSES) ON SECURITIES Realized gains (losses) on securities include
      provisions for other than temporary impairment of securities still held of
      $34.9 million in the first quarter of 2003 and $18.3 million in the first
      quarter of 2002. Increased impairment charges in recent years reflect a
      rise in corporate defaults in the marketplace. The increase in impairment
      charges in 2003 reflects primarily the downturn in the airline industry
      and writedowns of certain asset-backed securities.

      Realized losses on securities include losses of $4.5 million in the first
      quarter of 2003 and $3 million in the first quarter of 2002 to adjust the
      carrying value of AFC's investment in warrants to market value.

      LOSS ON SUBSIDIARY In February 2003, AFC recognized a $39.4 million pretax
      loss on the public offering of 12.5 million shares of Infinity.

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

                                                   Three months ended
                                                        March 31,
                                                   ------------------
                                                      2003       2002
                                                      ----       ----
           Other income                              $16.0      $15.3
           Other operating and general expenses       16.1       14.5
           Interest charges on borrowed money           .6         .6

      OTHER INCOME Other income increased $9.8 million (21%) for the first
      quarter of 2003 compared to 2002 due primarily to increased revenues
      earned by the Specialty group's growing warranty business and higher fee
      income in certain other specialty insurance operations.
<PAGE>
      ANNUITY BENEFITS Annuity benefits reflect amounts accrued on annuity
      policyholders' funds accumulated. Annuity benefits in the first quarter of
      2003 were slightly lower than the 2002 quarter as an increase in average
      annuity benefits accumulated was offset by a decrease in rates credited to
      policyholders.

      The majority of GAFRI's fixed annuity products permit GAFRI to change the
      crediting rate at any time subject to minimum interest rate guarantees (as
      determined by applicable law). Approximately 45% of the annuity
      benefits accumulated relate to policies that have a minimum guarantee of
      3%; the balance have a guarantee of 4%. Virtually all
      new sales of GAFRI's fixed annuities offer a minimum interest rate of 3%.
      Historically, management has been able to react to changes in market
      interest rates and maintain a desired interest rate spread. The recent
      interest rate environment has resulted in spread compression which could
      continue at least through the remainder of 2003.

                                       24
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      On its deferred annuities (annuities in the accumulation phase), GAFRI
      generally credits interest to policyholders' accounts at their current
      stated "surrender" interest rates. Furthermore, for "two-tier" deferred
      annuities (annuities under which a higher interest amount can be earned if
      a policy is annuitized rather than surrendered), GAFRI accrues an
      additional liability to provide for expected deaths and annuitizations.
      Changes in crediting rates, actual surrender, death and annuitization
      experience or modifications in actuarial assumptions can affect this
      accrual. Significant changes in projected investment yields could result
      in charges to earnings in the period such projections are modified.

      ANNUITY AND LIFE ACQUISITION EXPENSES Annuity and life acquisition
      expenses include amortization of annuity and life, accident and health
      deferred policy acquisition costs ("DPAC") as well as a portion of
      commissions on sales of insurance products. Annuity and life acquisition
      expenses also include amortization of the present value of future profits
      of businesses acquired. The increase in annuity and life acquisition
      expenses in the first quarter of 2003 compared to 2002 is due primarily to
      the amortization associated with GAFRI's purchase of MNL in June 2002.

      The vast majority of GAFRI's DPAC asset relates to its fixed annuity,
      variable annuity and life insurance lines of business. Continued spread
      compression, decreases in the stock market and adverse mortality could
      lead to writeoffs of DPAC in the future.

      INTEREST ON BORROWED MONEY Changes in interest expense result from
      fluctuations in market rates as well as changes in borrowings. AFC has
      generally financed its borrowings on a long-term basis which has resulted
      in higher current costs. Interest expense decreased in the first quarter
      of 2003 compared to the first quarter of 2002 as lower average
      indebtedness (including AFC's payable to AFG) and lower interest charges
      on amounts due reinsurers were partially offset by higher average rates on
      the AFC bank line.

      OTHER OPERATING AND GENERAL EXPENSES Other operating and general expenses
      increased $7.1 million (8%) for the first quarter of 2003 compared to the
      first quarter of 2002 due primarily to higher expenses in the Specialty
      group's growing warranty business and higher expenses related to growth in
      certain other Specialty operations.

      INCOME TAXES The 2003 provision for income taxes reflects $5.5 million in
      tax benefits related to AFC's basis in Infinity stock. The 2002 provision
      for income taxes includes a $16 million first quarter tax benefit for the
      reduction of previously accrued amounts due to the resolution of certain
      tax matters.
<PAGE>
      INVESTEE CORPORATIONS

      INFINITY PROPERTY AND CASUALTY CORPORATION Following AFC's sale of 61% of
      Infinity in the mid-February offering, AFC's proportionate share of
      Infinity's earnings is included in equity in net earnings (losses) of
      investees. Infinity reported net earnings for the first quarter of 2003 of
      $11.5 million, including $5.4 million subsequent to the offering.

      START-UP MANUFACTURING BUSINESSES Equity in earnings (losses) of investees
      also includes losses of two start-up manufacturing businesses (see Note
      D). Equity in net earnings (losses) of investees includes $865,000 in 2003
      and $859,000 in 2002 in losses of one of these businesses. Investee losses
      in 2002 include $1.9 million in losses of the other manufacturing
      business, which sold substantially all of its assets in December 2002.

                                       25
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


      CUMULATIVE EFFECT OF ACCOUNTING CHANGE Effective January 1, 2002, AFC
      implemented Statement of Financial Accounting Standards ("SFAS") No. 142,
      "Goodwill and Other Intangible Assets", under which goodwill is no longer
      amortized, but is subject to an impairment test at least annually. The
      initial impairment testing resulted in a charge of $40.4 million (net of
      minority interest and taxes) for the cumulative effect of a change in
      accounting principle.

      RECENT ACCOUNTING STANDARDS In January 2003, the Financial Accounting
      Standards Board issued Interpretation No.46, Consolidation of Variable
      Interest Entities ("FIN 46"). This interpretation will require companies
      to consolidate entities without sufficient equity based on ownership of
      expected gains and losses. FIN 46 is effective immediately to variable
      interest entities acquired after January 31, 2003. For entities acquired
      before that date, the guidance becomes effective for periods beginning
      after June 15, 2003.

      AFC is currently assessing the application of FIN 46 as it relates to its
      investments in two collateralized debt obligations ("CDOs"), for which AFC
      also acts as investment manager. Under the CDOs, securities were issued in
      various senior and subordinate classes and the proceeds were invested
      primarily in bank loans, and to a lesser extent, high yield bonds, all of
      which serve as collateral for the securities issued by the CDOs. None of
      the collateral was purchased from AFC. The market value of the collateral
      at March 31, 2003, was approximately $770 million.

      AFC's investments in the two CDOs are subordinate to the senior classes
      (approximately 92% of the total securities) issued by the CDOs. To the
      extent there are defaults and unrecoverable losses on the underlying
      collateral resulting in reduced cash flows, AFC's class would bear losses
      first. Holders of the CDO debt securities have no recourse against AFC for
      the liabilities of the CDOs; accordingly, AFC's exposure to loss on these
      investments is limited to its investment. AFC's investments in the CDOs
      are carried at estimated market value of $10.8 million at March 31, 2003,
      and are included in fixed maturities in AFC's balance sheet.
<PAGE>
      PROPOSED ACCOUNTING STANDARD GAFRI's variable annuity contracts contain a
      guaranteed minimum death benefit ("GMDB") (which may exceed the value of
      the policyholder's account) to be paid if the annuityholder dies before
      the annuity payout period commences. Payment of any difference between the
      GMDB and the related account balance is borne by GAFRI and expensed when
      paid. In periods of declining equity markets, the GMDB difference
      increases as the variable annuity account value decreases. At March 31,
      2003, the aggregate GMDB values (assuming every policyholder died on that
      date) exceeded the market value of the underlying variable annuities by
      $243 million. Industry practice varies, but GAFRI does not establish GAAP
      reserves for this mortality risk. If a proposed accounting standard
      becomes effective, GAFRI would be required to record a liability for the
      present value of expected GMDB payments. Initial recognition of a GAAP
      liability (estimated to be less than 4% of the difference between the
      underlying market value of the variable annuities and GMDB value) would be
      accounted for as the cumulative effect of a change in accounting
      principles. Death benefits paid in excess of the variable annuity account
      balances were about $600,000 in the first quarter of 2003 and $1.1 million
      in all of 2002.






                                       26
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q


                                     ITEM 3

             QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

      As of March 31, 2003, there were no material changes to the information
      provided in AFC's Form 10-K for 2002 under the caption "Exposure to Market
      Risk" in Management's Discussion and Analysis of Financial Condition and
      Results of Operations.


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


                                     ITEM 4

                             CONTROLS AND PROCEDURES

      AFC's chief executive officer and chief financial officer, with assistance
      from management, have evaluated AFC's disclosure controls and procedures
      (as defined in Exchange Act Rule 13a-14(c)) as of a date within 90 days
      prior to filing this report. Based on that evaluation, they concluded that
      the controls and procedures are effective. There have been no significant
      changes in AFC's internal controls or in other factors that could
      significantly affect these controls subsequent to the date of their
      evaluation.





























                                       27
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                                     PART II
                                OTHER INFORMATION

                                     ITEM 6

                        EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibit 10 - 2003 Annual Bonus Plan.

    Exhibit 99 - Certification pursuant to section 906 of the
                 Sarbanes-Oxley Act of 2002.

(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 14, 2003                             BY: s/Fred J. Runk
                                             -----------------------------------
                                             Fred J. Runk
                                             Senior Vice President and Treasurer





















                                       28
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

                  SARBANES-OXLEY SECTION 302(a) CERTIFICATIONS


I, Carl H. Lindner, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of American Financial
     Corporation;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

     c)  presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

     b)  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         controls; and
<PAGE>
6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



May 14, 2003                            BY: s/Carl H. Lindner
                                            -----------------------------------
                                            Carl H. Lindner
                                            Chairman of the Board and
                                              Chief Executive Officer
                                              (principal executive officer)
















                                       29
<PAGE>
                       AMERICAN FINANCIAL CORPORATION 10-Q

            SARBANES-OXLEY SECTION 302(a) CERTIFICATIONS - CONTINUED


I, Fred J. Runk, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of American Financial
     Corporation;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

     c)  presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

     b)  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         controls; and
<PAGE>
6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



May 14, 2003                            BY: s/Fred J. Runk
                                            -----------------------------------
                                            Fred J. Runk
                                            Senior Vice President and Treasurer
                                            (principal financial officer)
















                                       30