<PAGE>
________________________________________________________________________________


                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
                            ___________________________

                                     FORM 10-Q

/X/              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended September 30, 1996

                                        OR

/ /              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

              For the Transition period from _________ to _________.
                          Commission file number 0-26652

                              TRANSPORT HOLDINGS INC.
              (Exact name of registrant as specified in its charter)

            DELAWARE                          13-3595073
  (State or other jurisdiction             (I.R.S. Employer
 of incorporation or organization)        Identification No.)

         714 MAIN STREET                        76102
        FORT WORTH, TEXAS                    (Zip Code)
(Address of principal executive offices)

         Registrant's telephone number, including area code (817) 390-8000



   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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.


                       Yes    X       No           


As of October 31, 1996, there were 1,592,048 shares of the registrant's Class A
Common Stock, $.01 par value, outstanding.

________________________________________________________________________________

<PAGE>
                              TRANSPORT HOLDINGS INC.
                                     FORM 10-Q
                                 TABLE OF CONTENTS


                                                                           PAGE

PART I      FINANCIAL INFORMATION

Item 1.     Financial Statements . . . . . . . . . . . . . . . . .            1

Item 2.     Management's Discussion and Analysis
            of Financial Condition and Results of Operations. . . .           8



PART II     OTHER INFORMATION

Item 1.     Legal Proceedings. . . . . . . . . . . . . . . . . . .           14

Item 2.     Changes in Securities. . . . . . . . . . . . . . . . .           14

Item 3.     Defaults Upon Senior Securities. . . . . . . . . . . .           14

Item 4.     Submission of Matters to a Vote of Security Holders. .           14

Item 5.     Other Information. . . . . . . . . . . . . . . . . . .           14

Item 6.     Exhibits and Reports on Form 8-K . . . . . . . . . . .           14

<PAGE>
                             TRANSPORT HOLDINGS INC.

                      Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                       (in thousands)
                                                                  September 30,  December 31,
                                                                     1996            1995
Assets                                                            (unaudited)        (a) <F1>
                                                                  -----------    -----------
<S>                                                             <C>            <C>
Fixed maturities available for sale, at market
   (cost:  1996 - $476,722; 1995 - $482,626)                    $    482,993   $    518,303
Equity securities, at market
   (cost:  1996 - $76; 1995 - $1,850)                                  1,074          3,473
Mortgage loans on real estate                                          8,335          9,348
Investment in real estate                                                301            195
Policy loans                                                          16,886         18,487
Short-term investments                                                33,831         22,952
Other investments                                                      6,212          4,872
                                                                  -----------    -----------
   Total investments                                                 549,632        577,630

Cash and cash equivalents                                                742          2,198
Accrued investment income                                              5,704          6,258
Premiums due and unpaid                                                3,339          4,918
Due from reinsurers                                                  328,564        298,867
Due from agents                                                        3,408          5,332
Value of insurance in force                                           10,778         12,177
Deferred policy acquisition costs                                     28,392         29,531
Debt issue costs                                                       3,439          3,738
Other assets                                                           7,868          9,839
                                                                  -----------    -----------
      Total assets                                              $    941,866   $    950,488
                                                                  ===========    ===========
                                                                                 (Continued)
</TABLE>














                                  1
<PAGE>
                             TRANSPORT HOLDINGS INC.

                 Condensed Consolidated Balance Sheets, Continued
<TABLE>
<CAPTION>
                                                                        (in thousands)
                                                                  September 30,  December 31,
                                                                     1996           1995
Liabilities and Stockholders' Equity                              (unaudited)        (a) <F1>
                                                                  -----------    -----------
<S>                                                             <C>            <C>
Notes payable to banks                                          $     58,250   $     60,250
Subordinated convertible notes payable                                50,000         50,000
Future policy benefits                                               344,256        315,253
Unearned premiums                                                     34,682         39,961
Policy and contract claims                                           241,653        229,179
Other policyholder funds                                               2,802          3,130
Income taxes payable                                                  17,453         28,074
Accrued expenses and other liabilities                                18,551         20,546
                                                                  -----------    -----------
      Total liabilities                                              767,647        746,393

Stockholders' equity
   Preferred stock, $0.01 par value per share, 2,000,000
     shares authorized; shares issued and outstanding:
     91,030 at September 30, 1996, 182,060 at December 31,
     1995; redemption value: $25,630 at September 30, 1996,
     $46,911 at December 31, 1995                                     22,758         45,515
   Class A common stock, $0.01 par value per share,
      8,000,000 shares authorized;  shares issued and
      outstanding:  1,592,048 at September 30, 1996, 1,590,461
      at December 31, 1995                                                16             16
   Class B common stock, $0.01 par value per share,
      2,000,000 shares authorized, none issued                           - -            - -
   Paid in capital                                                   169,732        169,665
   Unrealized appreciation of securities, net                          4,725         24,245
   Retained (deficit)                                                (23,012)       (35,346)
                                                                  -----------    -----------
      Total equity                                                   174,219        204,095
                                                                  -----------    -----------
Total liabilities and stockholders' equity                      $    941,866   $    950,488
                                                                  ===========    ===========
<FN>
<F1>
(a) Condensed from audited financial statements.
</FN>
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                  2
<PAGE>
                             TRANSPORT HOLDINGS INC.

                   Condensed Consolidated Statements of Income

                                   (Unaudited)

                     (in thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                             Three Months Ended                Nine Months Ended
                                                               September 30,                     September 30,
                                                            1996           1995               1996           1995
                                                         -----------   -----------         -----------    -----------
<S>                                                    <C>            <C>                <C>            <C>
Revenues:
   Net premium income                                  $     26,829   $     51,449       $     82,451   $    160,067
   Investment income, net of related expenses                 9,673         13,668             29,552         39,708
   Realized investment gains                                     20          (449)                334            (80)
   Other income                                                 794            - -              1,394            - -
                                                         -----------   -----------         -----------    -----------
      Total revenues                                         37,316         64,668            113,731        199,695

Benefits and expenses:
   Incurred claims and other policy benefits, net            17,040         34,762             54,101        108,479
   Commissions                                                5,933         10,573             17,266         33,728
   Capitalization of deferred policy acquisition costs       (1,098)       (2,838)             (3,686)       (10,495)
   Amortization of deferred policy acquisition costs
      and value of insurance in force                         2,004          6,837              6,224         18,174
   Interest expense and amortization
      of debt issue costs                                     2,238            - -              6,795            - -
   Expenses of spin-off and related transactions                - -          2,209                - -          2,209
   Other operating expenses                                   2,856          5,959              10,810         19,309
                                                         -----------    -----------         -----------    -----------
      Total benefits and expenses                            28,973         57,502              91,510        171,404
                                                         -----------    -----------         -----------    -----------
      Income before tax                                       8,343          7,166              22,221         28,291

   Provision for federal income tax                           2,920          3,048               7,777         10,133
                                                         -----------    -----------         -----------    -----------
      Net income                                       $      5,423   $      4,118        $     14,444   $     18,158
                                                         ===========    ===========         ===========    ===========
Earnings per share:
      Primary                                          $       2.88   $     238.20 a <F2> $       6.73   $   3,116.72 a <F2>
                                                         ===========    ===========         ===========    ===========
      Fully diluted                                    $       1.68   $     121.89 b <F3> $       4.06   $   1,594.82 b <F3>
                                                         ===========    ===========         ===========    ===========
<FN>
<F2>
(a) Primary earnings per share was based on average shares outstanding of 17,288
    for the three months ended September 30, 1995 and 5,826 for the nine months
    then ended.  Earnings per share as if the entire 1,590,461 shares outstanding
    after the September 29, 1995 distribution had been outstanding for the entire
    period would have been $2.59 for the three months ended September 30, 1995 and
    $11.42 for the nine months then ended.
<F3>
(b) Fully diluted earnings per share was based on average shares outstanding of
    33,786 for the three months ended September 30, 1995 and 11,386 for the nine
    months then ended.  Earnings per share as if the entire 3,108,266 shares
    outstanding on a fully diluted basis after the September 29, 1995 distribution
    had been outstanding for the entire period would have been $1.32 for the three
    months ended September 30, 1995 and $5.84 for the nine months then ended.
</FN>
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                  3
<PAGE>
                             TRANSPORT HOLDINGS INC.

                 Condensed Consolidated Statements of Cash Flows

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                        (in thousands)
                                                                      Nine Months Ended
                                                                        September 30,
                                                                     1996           1995
                                                                  -----------    -----------
<S>                                                             <C>            <C>
Operating activities:
   Net income                                                   $     14,444   $     18,158
   Adjustments to reconcile net income to net cash
      provided by operating activities:
      Gain on sale of securities                                        (334)            80
      Accretion of bond discount or premium                           (1,562)        (1,059)
      Amortization debt issue costs                                      454            - -
      Directors fees paid in capital stock                                67            - -
      Change in assets and liabilities:
         Accrued investment income                                       554            214
         Premiums due and unpaid                                       1,579          1,146
         Due from reinsurers                                         (29,697)        12,114
         Due from agents                                               1,924          1,774
         Value of insurance in force                                   1,399          1,847
         Deferred policy acquisition costs                             1,139          5,831
         Other assets                                                  1,972          1,686
         Reserves for future policy benefits and claims               35,870         11,778
         Income taxes payable                                           (110)        (1,849)
         Accrued expenses and other liabilities                        1,109           (270)
                                                                  -----------    -----------
                  Net cash provided by operating activities           28,808         51,450

Investing activities:
   Sale of fixed maturities                                           64,251        143,190
   Maturity of fixed maturities                                        5,150            - -
   Sale of common stock                                                2,487         53,170
   Sale of preferred stock                                               - -          1,936
   Sale of investment in Travelers                                       - -         35,200
   Sale of real estate                                                   - -         16,585
   Sale of mortgage                                                      - -          7,000
   Purchase of fixed maturities                                      (62,336)      (300,359)
   Purchase of common stock                                              - -        (46,637)
   Principal payments on mortgages                                     1,013          1,508
   Principal payments on policy loans                                  1,601          1,662
   Security transactions in course of settlement                      (3,104)           - -
   Change in short-term and other invested assets                    (12,303)        23,652
                                                                  -----------    -----------
                  Net cash used in investing activities               (3,241)       (63,093)

Financing activities:
   Issuance of long term debt                                            - -        112,000
   Debt issue costs                                                      - -         (3,868)
   Dividends paid                                                        - -       (105,000)
   Cost of preferred stock issue                                         - -           (466)
   Issuance of warrants                                                  - -             93
   Redemption of preferred stock                                     (24,868)           - -
   Principal payments on bank debt                                    (2,000)           - -
   Cost of borrowings capitalized                                       (155)           - -
                                                                  -----------    -----------
                  Net cash used in financing activities              (27,023)         2,759

Decrease in cash and cash equivalents                                 (1,456)        (8,884)
Cash and cash equivalents at beginning of period                       2,198          3,096
                                                                  -----------    -----------
Cash and cash equivalents at end of period                      $        742   $     (5,788)
                                                                  ===========    ===========
Supplemental disclosure of cash flow information:
   Cash paid for taxes                                          $      7,561   $     11,982
   Interest  paid                                               $      6,696   $        - -
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                  4
<PAGE>
                              TRANSPORT HOLDINGS INC.


             Condensed Consolidated Statement of Stockholders' Equity
                                    (unaudited)
                        (in thousands except share amounts)
<TABLE>
<CAPTION>
                                                                                         Unrealized
                                                                                        appreciation
                                 Preferred Stock    Class A Common Stock               (depreciation)
                                Shares               Shares                Paid in     of securities,   Retained
                                Issued     Amount    Issued     Amount     Capital           net         Deficit       Total
                                --------  --------  ---------   ------    ---------    --------------   ----------    ----------
<S>                             <C>      <C>        <C>        <C>       <C>          <C>              <C>           <C>
Balance December 31, 1995       182,060  $  45,515  1,590,461  $    16   $  169,665   $       24,245   $  (35,346)   $  204,095

Net income                                                                                                 14,444        14,444

Issuance of shares to directors                         1,587        0           67                                          67

Redemption of preferred stock   (91,030)   (22,757)                                                        (2,110)      (24,867)

Unrealized investment losses,
    net of taxes                                                                             (19,520)                   (19,520)
                                --------   --------  ---------   ------   ---------    --------------   ----------    ----------

Balance, September 30, 1996      91,030   $  22,758  1,592,048  $    16  $  169,732   $        4,725   $  (23,012)   $  174,219
                                ========   ========  =========   ======   =========    ==============   ==========    ==========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>








                                  5
<PAGE>
                              TRANSPORT HOLDINGS INC.

               Notes to Condensed Consolidated Financial Statements

                                    (Unaudited)

1.     Organization

Transport Holdings Inc. (the "Company") was incorporated under the laws of the
State of Delaware.  The Company is the sole stockholder of Intermediate Holdings
Inc., a Delaware corporation.  Intermediate Holdings Inc. is the sole
stockholder of THD Inc., a Delaware corporation organized in 1996 and TLSD
Inc., a Delaware corporation organized in 1995.  THD Inc. is the sole
shareholder of TLIC Life Insurance Company, a Texas life insurance company
organized in 1995.  TLIC Life Insurance Company is the sole shareholder of
Transport Life Insurance Company, a Texas life insurance company organized in
1958 and in continuous operation since that time.  Transport Life Insurance
Company in turn owns all of the common stock of Continental Life Insurance
Company, a Texas insurance company formed and in continuous operation since
1969, and a wholly owned subsidiary of Transport Life Insurance Company since
1971.  TLIC Life Insurance Company, Transport Life Insurance Company, and
Continental Life Insurance Company are principally engaged in the
supplemental life and health insurance business.

These condensed consolidated financial statements include the accounts of the
Company, Intermediate Holdings Inc., THD Inc., TLSD Inc., TLIC Life Insurance
Company, Transport Life Insurance Company, and Continental Life Insurance
Company, which have been combined for all periods presented.  All material
intercompany accounts and transactions have been eliminated.  Prior to
September 1995, there were no material assets, liabilities, or results of
operations for any of the consolidated companies except Transport Life
Insurance Company and Continental Life Insurance Company.

2.     Basis of Presentation

The condensed consolidated financial statements as of and for the three months
and nine months ended September 30, 1996 are unaudited and have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission.  Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading.  The interim financial statements
reflect all adjustments, consisting only of normal recurring adjustments, that
are, in the opinion of management, necessary for a fair statement of the results
for the interim periods.





                                  6
<PAGE>
These financial statements should be read in conjunction with the audited
consolidated financial statements and the notes thereto included in the Annual
Report dated March 22, 1996 and furnished to stockholders of the Company.  The
results of operations for the three month and nine month periods ended September
30, 1996 should not be considered indicative of the results to be expected for
the entire year.

3.     Earnings Per Share

Substantially all of the Company's Class A Common Stock was issued on September
29, 1995.  On April 30, 1996, 1,587 shares of Class A Common Stock were issued
to certain of the Company's directors in payment of directors' fees.  Primary
earnings per share was based on the weighted average number of Class A shares
outstanding plus the weighted average number of common stock equivalents
outstanding for stock options granted, using the treasury stock method.  Fully
diluted earnings per share was based on the number of shares that would be
outstanding if the $50 million of subordinated convertible notes payable were
converted into Class A shares (if such notes were presently convertible into
Class A shares) and assuming the exercise of outstanding stock options using the
treasury stock method.  None of the stock options outstanding were exercisable
at September 30, 1996.

On June 28, 1996, the Company redeemed 91,030 shares of preferred stock then
outstanding at a cost of approximately $25 million.  Approximately $2 million
was charged to retained deficit for the excess of the redemption price, as
determined pursuant to the preferred stock certificate, over the carrying value
of the shares redeemed.  This excess represented cumulative unpaid dividends on
the preferred stock redeemed for the period from issuance (September 29, 1995)
to redemption.

4.     Pending Merger with Conseco, Inc.

On September 26, 1996, the Company announced that it had entered into an
agreement to merge with and into Conseco, Inc. of Carmel, Indiana.  Under the
terms of the agreement, each share of the Company's common stock would be
exchanged for the number of shares of Conseco, Inc. common stock determined by
dividing $70 by the average trading price of the Conseco stock for the ten
trading days immediately preceding the second trading day prior to closing (such
number to be not more than 1.8301 nor less than 1.4000).  The merger is subject
to stockholder and regulatory approvals.











                                  7
<PAGE>
            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

                             AND RESULTS OF OPERATIONS

OVERVIEW

 The following discussion should be read in conjunction with the condensed
consolidated financial statements and notes thereto found under Part I, Item 1,
along with management's discussion and analysis of financial condition and
results of operations found in the Company's Annual Report dated March 22, 1996.

 The Company is principally engaged in the supplemental life and health
insurance business through its operating subsidiaries, TLIC Life Insurance
Company, Transport Life Insurance Company and Continental Life Insurance
Company.

PENDING MERGER WITH CONSECO, INC.

 On September 26, 1996, the Company announced that it had entered into an
agreement to merge with and into Conseco, Inc. of Carmel, Indiana.  Under the
terms of the agreement, each share of the Company's common stock would be
exchanged for the number of shares of Conseco, Inc. common stock determined by
dividing $70 by the average trading price of the Conseco stock for the ten
trading days immediately preceding the second trading day prior to closing (such
number to be not more than 1.8301 nor less than 1.4000).  The merger, which is
subject to stockholder and regulatory approvals, is expected to close before the
end of 1996.  Stockholders should read the Proxy Statement / Prospectus which
will be furnished in connection with the notice of a special meeting of
stockholders to vote on the proposed merger.

CHANGE IN CAPITALIZATION

 On June 28, 1996, the Company redeemed one half of its preferred stock then
outstanding for cash of $25 million.  Pursuant to the terms of the preferred
stock, the redemption price included an amount for accrued but undeclared
dividends on the shares redeemed at a rate of 12% per annum compounded quarterly
since issue.  The preferred stock was issued on September 29, 1995.  The $2
million excess of the redemption price over the carrying value of the shares
redeemed was charged to retained deficit.  In connection with the redemption,
the Company's loan agreements for its bank debt were amended at a cost of $0.2
million.  These costs were capitalized and will be amortized over the remaining
life of the bank debt.

RESULTS OF OPERATIONS

 OVERVIEW

 The Company sold its long term care business effective October 1, 1995.
Results for the third quarter of 1996 as compared to the third quarter of 1995,
and the 

                                  8
<PAGE>
first nine months of 1996 as compared to the first nine months of 1995, reflect
a reduction in premiums, benefits, and investment income because of the sale of
this business.  In addition, the Company incurred interest expense on bank debt
and the subordinated convertible notes in the first three quarters of 1996.
These notes were issued on September 29, 1995.

THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995

 PREMIUM INCOME

 Premium income, net of reinsurance, decreased by 48% or $24.6 million to $26.8
million for the three months ended September 30, 1996 as compared to the three
months ended September 30, 1995, principally as a result of the sale of the long
term care business.  Long term care insurance premiums were $23.7 million in the
third quarter of 1995 as compared to none in the third quarter of 1996.  Cancer
insurance premiums declined $0.5 million or 3% to $17.2 million.  The decrease
for cancer insurance premiums is attributable to reduced sales in the past
several years.  The Company expects the decline in premium income to continue
for at least six months as a result of the declines in new sales in prior
periods.

 New annualized premium for cancer and heart/stoke insurance decreased 38% or
$1.2 million to $1.9 million for the three months ended September 30, 1996 as
compared to the three months ended September 30, 1995.  The Company believes
that the factors which resulted in sales declines in 1995, 1994 and 1993 have
continued to impact new annualized premium.  These factors include the Company's
cancer insurance marketing agencies process of adjusting to a rate increase
environment and to selling policies with more limited radiation and chemotherapy
benefits.

 NET INVESTMENT INCOME

 Net investment income decreased by 29% or $4 million to $9.7 million for the
three months ended September 30, 1996 as compared to the three months ended
September 30, 1995.  The decrease resulted primarily from lower levels of
invested assets because of the redemption of preferred stock and the sale of the
long term care business.  Invested assets were $549 million at September 30,
1996 as compared to $798 million at September 30, 1995, a decrease of $249
million or 31%.  In December 1995, the Company transferred $250 million to the
buyer of the long term care business in connection with the sale.  On June 28,
1996, the Company used $25 million of invested assets to redeem one half of its
preferred stock then outstanding.  During the first quarter of 1996, the Company
sold most of its equity securities and reinvested the proceeds in fixed maturity
securities.  Equity securities (at market) were $1.1 million at September 30,
1996 as compared to $3.5 million at December 31, 1995.





                                  9
<PAGE>
 Investment income is impacted by, among other things, changes in prevailing
market interest rates and the creditworthiness and period to maturity of the
Company's investments.  Investment income in future periods may differ from past
experience as a result of changes in any or all of these factors.  Significant
increases or decreases in investment income could correspondingly affect future
results of operations.

 OTHER INCOME

 Other income was $0.8 million in the three months ended September 30, 1996,
relating to incentive management fees on business the Company administers for a
third party.  There was no other income in 1995.

 NET CLAIMS AND OTHER POLICY BENEFITS

 Benefits decreased by 51% or $17.7 million to $17 million for the three months
ended September 30, 1996 as compared to the three months ended September 30,
1995, primarily as a result of the sale of the long term care business.
Benefits for long term care business were $17.3 million in the third quarter of
1995, and none in the third quarter of 1996.  Benefits for cancer insurance
increased by $0.3 million to $10.9 million and benefits for major/catastrophic
hospital insurance decreased by $0.7 million.  The provision for benefits is
impacted by the number of policyholders who qualify for benefits, along with the
severity and duration of their claims, as well as the Company's estimates of
future obligations on policies currently in force.  Any or all of these factors
may change in the future, causing the provision for benefits to increase or
decrease with a corresponding impact on results of operations.

 COMMISSIONS AND DEFERRED POLICY ACQUISITION COSTS

 Commissions paid decreased by 44% or $4.6 million to $5.9 million for the three
months ended September 30, 1996 as compared to the three months ended September
30, 1995, primarily as a result of the sale of the long term care business. 
Commissions for long term care business declined by $4.5 million as compared to
the third quarter of 1995.  Commissions paid on cancer, heart/stroke, and other
accident and health insurance declined by $0.6 million or 10% as a result of
lower new sales.  First year commissions capitalized declined $0.9 million and
other capitalized expenses related to the production of new business declined
$0.8 million as a result of the sale of the long term care business and lower
new sales of cancer, heart/stroke, and other accident and health insurance.

 Amortization of deferred policy acquisition costs and value of insurance in
force declined by 71% or $4.8 million to $2 million for the three months ended
September 30, 1996 as compared to the three months ended September 30, 1995,
primarily as a result of the sale of the long term care business and the
extinguishment of deferred costs associated with that business upon sale.





                                 10
<PAGE>
 INTEREST EXPENSE

 Interest expense was $2.2 million for the three months ended September 30,
1996.  There was no interest expense in the third quarter of 1995, since the
Company's long term borrowings were funded on the last day of that quarter.

 EXPENSES OF SPIN-OFF

 In the third quarter of 1995, the Company incurred $2.2 million of expenses in
connection with the spin-off completed on September 29, 1995.  There were no
costs associated with the spin-off in the quarter ended September 20, 1996.

 OTHER OPERATING EXPENSES

 Administrative expenses decreased by 52% or $3.1 million to $2.9 million for
the three months ended September 30, 1996 as compared to the three months ended
September 30, 1995.  In the third quarter of 1996, the Company received $1.4
million of expense reimbursements related to long term care insurance for costs
of administering the business on behalf of the buyer and premium tax
reimbursements.  The remainder of the decrease resulted primarily from staff
reductions made in connection with the sale of the long term care business.

NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1995

 PREMIUM INCOME

 Premium income, net of reinsurance, decreased by 48% or $77.6 million to $82.4
million for the nine months ended September 30, 1996 as compared to the nine
months ended September 30, 1995, principally as a result of the sale of the long
term care business.  Long term care insurance premiums were $74.1 million in the
first nine months of 1995 as compared to none in the first nine months of 1996. 
Cancer insurance premiums declined $1.6 million or 3% to $51.7 million.  The
decrease for cancer insurance premiums is attributable to reduced sales in the
past several years.  The Company expects the decline in premium income to
continue for at least six months as a result of the declines in new sales in
prior periods.

 New annualized premium for cancer and heart/stoke insurance decreased 24% or
$2.2 million to $7 million for the nine months ended September 30, 1996 as
compared to the nine months ended September 30, 1995.  The Company believes that
the factors which resulted in sales declines in 1995, 1994 and 1993 have
continued to impact new annualized premium.  These factors include the Company's
cancer insurance marketing agencies' process of adjusting to a rate increase
environment and to selling policies with more limited radiation and chemotherapy
benefits.





                                 11
<PAGE>
 NET INVESTMENT INCOME

 Net investment income decreased by 26% or $10.2 million to $29.6 million for
the nine months ended September 30, 1996 as compared to the nine months ended
September 30, 1995.  The decrease resulted primarily from lower levels of
invested assets because of the redemption of preferred stock and the sale of the
long term care business as discussed previously in the analysis of third quarter
results. 

 Investment income is impacted by, among other things, changes in prevailing
market interest rates and the creditworthiness and period to maturity of the
Company's investments.  Investment income in future periods may differ from past
experience as a result of changes in any or all of these factors.  Significant
increases or decreases in investment income could correspondingly affect future
results of operations.

 OTHER INCOME

 Other income was $1.4 million in the nine months ended September 30, 1996,
relating to incentive management fees on business the Company administers for a
third party.  There was no other income in 1995.

 NET CLAIMS AND OTHER POLICY BENEFITS

 Benefits decreased by 50% or $54.4 million to $54.1 million for the nine months
ended September 30, 1996 as compared to the nine months ended September 30,
1995, primarily as a result of the sale of the long term care business.
Benefits for long term care business were $55.2 million in the first nine months
of 1995, and none in the first nine months of 1996.  Benefits for cancer
insurance increased by $0.8 million to $33.8 million and benefits for
major/catastrophic hospital insurance decreased by $2.3 million.  The provision
for benefits is impacted by the number of policyholders who qualify for
benefits, along with the severity and duration of their claims, as well as the
Company's estimates of future obligations on policies currently in force.  Any
or all of these factors may change in the future, causing the provision for
benefits to increase or decrease with a corresponding impact on results of
operations.

 COMMISSIONS AND DEFERRED POLICY ACQUISITION COSTS

 Commissions paid decreased by 49% or $16.5 million to $17.3 million for the
nine months ended September 30, 1996 as compared to the nine months ended
September 30, 1995, primarily as a result of the sale of the long term care
business.  Commissions for long term care business declined by $14.8 million as
compared to the first nine months of 1995.  Commissions paid on cancer,
heart/stroke, and other accident and health insurance declined by $1.6 million
or 9% as a result of lower new sales.  First year commissions capitalized
declined $4 million and other capitalized expenses related to the production of
new business declined $2.8 million as a result of


                                 12
<PAGE>
the sale of the long term care business and lower new sales
of cancer, heart/stroke, and other accident and health insurance.

 Amortization of deferred policy acquisition costs and value of insurance in
force declined by 66% or $12 million to $6.2 million for the nine months ended
September 30, 1996 as compared to the nine months ended September 30, 1995,
primarily as a result of the sale of the long term care business and the
extinguishment of deferred costs associated with that business upon sale.

 INTEREST EXPENSE

 Interest expense was $6.8 million for the nine months ended September 30, 1996.
There was no interest expense in the first nine months of 1995, since the
Company's long term borrowings were funded on the last day of that period.

 OTHER OPERATING EXPENSES

 Administrative expenses decreased by 44% or $8.5 million to $10.8 million for
the nine months ended September 30, 1996 as compared to the nine months ended
September 30, 1995.  In the first nine months of 1996, the Company received $4.3
million of expense reimbursements related to long term care insurance for costs
of administering the business on behalf of the buyer and premium tax
reimbursements.  The remainder of the decrease resulted primarily from staff
reductions made in connection with the sale of the long term care business.

EARNINGS PER SHARE

  The Company was a wholly owned subsidiary of Travelers Group Inc. until
September 29, 1995.  Earnings per share are presented for the three months and
nine months ended September 30, 1995.  In both cases, the Company's Class A
Common Stock was outstanding for only one day in the period.  Supplemental
disclosure is provided on the face of the condensed consolidated statements of
income as if the Class A Common Stock had been outstanding for the entire
period.  Earnings per share are also presented for the quarter and nine months
ended September 30, 1996.  For the quarter and nine months, respectively, $0.7
million and $3.6 million of earnings accrued to the benefit of the preferred
stockholder.  Primary and fully diluted earnings per share include the effect of
outstanding stock options using the treasury stock method.  None of the
Company's stock options outstanding were exercisable at September 30, 1996.
Fully diluted earnings per share also includes the effect on earnings per share
had the subordinated convertible notes been converted into Class A Common
shares.  These notes are not presently convertible.  They become convertible
into Class B Common stock in September 1996 and into Class A Common stock in
2000 (earlier under certain circumstances).







                                 13
<PAGE>
                            PART II. OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

 None

ITEM 2.     CHANGES IN SECURITIES

 None

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

 None

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 None

ITEM 5.     OTHER INFORMATION

 None

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

 a.    Exhibits
<TABLE>
<CAPTION>
EXHIBIT
  NO.                            DESCRIPTION
<S>       <C>
2.1       Agreement and Plan of Merger dated as of September 25, 1996, by and
          between Conseco, Inc. ("Conseco") and the Registrant. (1) <F4>

2.2       First Amendment to Agreement and Plan of Merger dated as of November
          7, 1996 by and between Conseco and the Registrant. (6) <F9>

3.1(i)    Restated Certificate of Incorporation of the Registrant. (2) <F5>

3.2(i)    Certificate of Designation of Series A Cumulative Exchangeable
          Preferred Stock of the Registrant. (3) <F6>

3.3(ii)   Amended and Restated Bylaws of the Registrant. (2) <F5>

4.1       Form of Class A Common Stock Certificate. (4) <F7>







                                 14
<PAGE>
4.2       Subordinated Convertible Loan Agreement dated as of June 12, 1995,
          among the Registrant, Travelers Group Inc. ("Travelers") and the
          Lenders named therein (the "Lenders"). (4) <F7>

4.3       Amendment No. 1 to Subordinated Convertible Loan Agreement dated as of
          August 7, 1995, among the Registrant, Travelers and the Lenders. (3)
          <F6>

4.4       Amendment No. 2 to Subordinated Convertible Loan Agreement dated as of
          January 16, 1996, among the Registrant, Insurance Partners, L.P. and
          Insurance Partners Offshore (Bermuda), L.P. (5) <F8>

4.5       Form of Series A Note. (4) <F7>

4.6       Form of Series B Note. (4) <F7>

4.7       Preferred Stock Registration Rights Agreement among Travelers and the
          Registrant dated as of June 12, 1995. (4) <F7>

4.8       Convertible Debt Registration Rights Agreement among the Registrant
          and the Lenders dated as of June 12, 1995. (4) <F7>

4.9       Warrants to purchase Class A Common Stock of the Registrant. (3) <F6>

4.10      Warrant Stock Registration Rights Agreement, dated September 29, 1995,
          between the Registrant and The Lasater Children's 1995 GST Exempt
          Trusts and The Sharpe Children's 1995 GST Exempt Trusts. (3) <F6>

4.11      Form of Indenture between the Registrant as Issuer and ____________ as
          Trustee for the Junior Subordinated Exchange Debentures due 2006. (3)
          <F6>

4.12      Pledge Agreement between the Registrant and Insurance Partners
          Advisors, L.P. as agent. (2) <F5>

11.1      Schedule of Computation of Earnings Per Share. (6) <F9>

27        Financial Data Schedule. (6) <F9>

_______________________
<FN>
<F4>
(1)     Previously filed as an exhibit to the Company's Current Report on Form
        8-K dated September 25, 1996, and incorporated herein by reference.
<F5>
(2)     Previously filed as an exhibit to the Company's Quarterly Report on Form
        10-Q for the quarter ended September 30, 1995, and incorporated herein
        by reference.
<F6>
(3)     Previously filed as an exhibit to the Company's Current Report on Form
        8-K dated September 29, 1995, and incorporated herein by reference.

                                 15
<PAGE>
<F7>
(4)     Previously filed as an exhibit to the Company's Registration Statement
        No. 33-94960 on Form S-1, and incorporated herein by reference.

<F8>
(5)     Previously filed as an exhibit to the Company's Annual Report on Form
        10-K for the year ended December 31, 1995, and incorporated herein by
        reference.
<F9>
(6)     Filed herewith.
</FN>
</TABLE>
        b.   Reports on Form 8-K

        During the quarter covered by this report, the Company filed a current
        report on Form 8-K dated September 25, 1996.  The Company reported under
        item 7 of Form 8-K that the Company had entered into an agreement and
        plan of merger with Conseco, Inc. ("Conseco"), dated as of September 25,
        1996, pursuant to which Conseco intends to acquire the Company by
        merger.































                                 16
<PAGE>
                                     SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                Transport Holdings Inc.


November 13, 1996               By: /S/ DEBORAH V. GREER
                                   _______________________________
                                   Deborah V. Greer
                                   Vice President and Controller
                                   (Chief accounting officer and duly authorized
                                          officer of registrant)



































                                 17