<PAGE> 1

                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  September 30, 1997 
                               ____________________


Commission file number  1-11913 
                       _________


                                  Aetna Inc.                               
___________________________________________________________________________
            (Exact name of registrant as specified in its charter)


          Connecticut                             02-0488491               
___________________________________________________________________________
(State or other jurisdiction of                (I.R.S. Employer
 incorporation or organization)                 Identification No.)


151 Farmington Avenue, Hartford, Connecticut           06156               
___________________________________________________________________________
(Address of principal executive offices)             (ZIP Code)


Registrant's telephone number, including area code     (860) 273-0123      
                                                     ______________________


                              Not Applicable                               
___________________________________________________________________________
            (Former name, former address and former fiscal year,
                       if changed since last report)



Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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  _____
          _____               



Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.




                                            Shares Outstanding
   Title of Class                           at September 30, 1997 
  ________________                          _____________________ 

Common Capital Stock
 $.01 par value                                 148,598,715

<PAGE> 2

                             TABLE OF CONTENTS
                             _________________


                                                           Page
                                                           ____

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

         Consolidated Statements of Income                   3
         Consolidated Balance Sheets                         4
         Consolidated Statements of Shareholders'
           Equity                                            6
         Consolidated Statements of Cash Flows               7
         Condensed Notes to Financial Statements             8
         Independent Auditors' Review Report                24

Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of
           Operations.                                      25


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.                                 52

Item 5.  Other Information.                                 52

Item 6.  Exhibits and Reports on Form 8-K.                  53


Signatures                                                  54

<PAGE> 3

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements.

                          AETNA INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                                         Three Months Ended        Nine Months Ended
                                                            September 30,             September 30,      
                                                    ___________________________ _________________________
(Millions, except share and per common share data)       1997         1996           1997         1996
                                                         ____         ____           ____         ____
<S>                                                 <C>          <C>            <C>          <C>

Revenue:
  Premiums......................................    $    3,152.0 $    2,722.0   $    9,417.5 $    6,328.0
  Net investment income.........................           818.9        897.9        2,506.1      2,678.0
  Fees and other income.........................           567.7        558.5        1,693.8      1,624.8
  Net realized capital gains....................            93.7          7.5          129.9         73.9
                                                    ____________ ____________   ____________ ____________
      Total revenue.............................         4,632.3      4,185.9       13,747.3     10,704.7
                                                    ____________ ____________   ____________ ____________

Benefits and expenses:
  Current and future benefits...................         3,318.3      2,894.3        9,684.0      7,241.9
  Operating expenses............................           887.9        862.9        2,591.1      2,388.1
  Interest expense..............................            60.3         50.8          177.1        111.1
  Amortization of goodwill and other 
   acquired intangible assets...................            96.0         75.1          284.0         80.8
  Amortization of deferred policy 
   acquisition costs............................            58.6         48.4          159.4        123.5
  Reductions of loss on discontinued products...               -            -         (172.5)      (170.0)
  Severance and facilities charges
   (reserve reductions).........................               -         49.0          (45.0)       441.7
                                                    ____________ ____________   ____________ ____________
     Total benefits and expenses................         4,421.1      3,980.5       12,678.1     10,217.1
                                                    ____________ ____________   ____________ ____________
  
Income from continuing operations 
 before income taxes............................           211.2        205.4        1,069.2        487.6
Income taxes (benefits) 
  Current.......................................            40.7         76.7          280.3        201.5
  Deferred......................................            52.7          6.3          161.7        (26.1)
                                                    ____________ ____________   ____________ ____________ 
      Total income taxes........................            93.4         83.0          442.0        175.4
                                                    ____________ ____________   ____________ ____________

Income from continuing operations...............           117.8        122.4          627.2        312.2
Discontinued Operations, net of tax:
 Income from operations.........................               -            -              -        182.2
 Gain on sale...................................               -            -              -        263.7
                                                    ____________ ____________   ____________ ____________

      Net income ...............................    $      117.8 $      122.4   $      627.2 $      758.1
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________
      Net income applicable to  
        common ownership........................    $      104.0 $      111.2   $      585.6 $      746.9
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________

Results per common share:
Income from continuing operations...............    $        .69 $        .77   $       3.87 $       2.39 
Discontinued Operations, net of tax:
 Income from operations.........................               -            -              -         1.44
 Gain on sale...................................               -            -              -         2.09
                                                    ____________ ____________   ____________ ____________

  Net income ...................................    $        .69 $        .77   $       3.87 $       5.92
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________

  Dividends declared............................    $        .20 $        .40   $        .60 $       1.09
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________

  Weighted average common shares and 
   common share equivalents.....................     150,933,885  145,149,973    151,147,103  126,138,464
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________

<FN>

See Condensed Notes to Financial Statements.

</TABLE>

<PAGE> 4

                          AETNA INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                     September 30,     December 31,
(Millions)                                               1997              1996    
                                                     _____________     ____________
<S>                                                  <C>               <C>

Assets:
Investments:
Debt securities available for sale, 
     at fair value (amortized cost 
     $31,258.1 and $31,441.4)..................      $  32,611.7       $  32,336.3
Equity securities, at fair value
   (cost $980.7 and $963.4)....................          1,401.7           1,332.8
Short-term investments.........................          1,117.9             723.2
Mortgage loans.................................          6,013.7           6,700.9
Real estate....................................            532.6             850.2
Policy loans...................................            744.6             707.3
Other..........................................            892.2             835.5
                                                     ___________       ___________
      Total investments........................         43,314.4          43,486.2
Cash and cash equivalents......................          1,333.3           1,462.6
Accrued investment income......................            575.0             598.6
Premiums due and other receivables.............          1,524.2           1,190.4
Deferred policy acquisition costs..............          2,373.4           2,226.9
Goodwill and other acquired intangible assets..          8,591.7           8,432.6
Other assets...................................          1,003.8           1,070.1
Separate Accounts assets.......................         40,430.8          34,445.5
                                                     ___________       ___________
      Total assets.............................      $  99,146.6       $  92,912.9
                                                     ___________       ___________
                                                     ___________       ___________

<FN>

See Condensed Notes to Financial Statements.

</TABLE>


<PAGE> 5

                          AETNA INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                  (Continued)

<TABLE>
<CAPTION>

                                                       September 30,     December 31,
(Millions, except share and per common share data)         1997              1996    
                                                       _____________     ____________
<S>                                                    <C>               <C>

Liabilities:
  Future policy benefits........................       $  18,114.6       $  17,783.4
  Unpaid claims.................................           3,262.5           3,029.2
  Unearned premiums.............................             199.1             333.6
  Policyholders' funds left with the Company....          18,939.0          19,901.7
                                                       ___________       ___________
      Total insurance liabilities...............          40,515.2          41,047.9
  Dividends payable to shareholders.............              36.7              36.9
  Short-term debt...............................             535.0             282.8
  Long-term debt................................           2,373.5           2,380.0
  Current income taxes..........................             154.3             164.3
  Deferred income taxes.........................             302.1              31.7
  Other liabilities.............................           2,961.6           3,202.3
  Minority and participating policyholders'
   interests....................................             239.6             221.7
  Separate Accounts liabilities.................          40,389.8          34,380.6
                                                       ___________       ___________
      Total liabilities.........................          87,507.8          81,748.2
                                                       ___________       ___________

  Aetna-obligated mandatorily redeemable 
    preferred securities of subsidiary
    limited liability company holding 
    primarily debentures guaranteed by Aetna....             275.0             275.0
                                                       ___________       ___________

Commitments and Contingent Liabilities
 (Notes 5 and 12)
Shareholders' Equity:
  Class C Voting Mandatorily Convertible 
   Preferred Stock ($.01 par value; 15,000,000
   shares authorized; 11,655,335 in 1997 and
   11,655,546 in 1996 issued and outstanding)...             865.4             865.4
  Common Stock ($.01 par value; 500,000,000 
   shares authorized; 148,598,715 in 1997 and
   150,084,799 in 1996 issued and outstanding)..           3,862.2           4,032.8
  Net unrealized capital gains..................             488.6             340.0
  Retained earnings.............................           6,147.6           5,651.5
                                                       ___________       ___________

      Total shareholders' equity................          11,363.8          10,889.7
                                                       ___________       ___________

      Total liabilities, redeemable preferred
       securities and shareholders' equity......       $  99,146.6       $  92,912.9
                                                       ___________       ___________
                                                       ___________       ___________

  Shareholders' equity per common share.........       $     70.65       $     66.79
                                                       ___________       ___________
                                                       ___________       ___________

<FN>

See Condensed Notes to Financial Statements.

</TABLE>


<PAGE> 6

                        AETNA INC. AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>

(Millions, except share data)
                                               Class C Voting
                                               Mandatorily             Net
                                               Convertible             Unrealized
                                               Preferred    Common     Capital        Retained  Treasury
Nine Months Ended September 30, 1997 Total     Stock        Stock      Gains          Earnings  Stock   
________________________________________________________________________________________________________

<S>                                  <C>       <C>          <C>        <C>            <C>       <C>

Balances at December 31, 1996        $10,889.7 $    865.4   $ 4,032.8  $   340.0      $ 5,651.5 $     -
_______________________________________________________________________________________________________

Net income..........................     627.2                                            627.2
Change in net unrealized capital
  gains.............................     148.6                             148.6
Common stock issued for benefit 
  plans and other (1,819,516 shares)     131.0                  131.0
Repurchase of common shares 
  (3,305,600 shares)................    (301.6)                (301.6)
Common stock dividends..............     (89.5)                                           (89.5)
Preferred stock dividends...........     (41.6)                                           (41.6)       
                                     __________________________________________________________________


Balances at September 30, 1997       $11,363.8 $    865.4   $ 3,862.2  $   488.6      $ 6,147.6 $     - 
_______________________________________________________________________________________________________ 
                                     __________________________________________________________________ 
                                                                   




Nine Months Ended September 30, 1996                                                                   
_______________________________________________________________________________________________________

<S>                                  <C>       <C>          <C>        <C>            <C>       <C>

Balances at December 31, 1995        $ 7,272.8 $        -   $ 1,448.2  $   641.1      $ 5,195.6 $ (12.1)
_______________________________________________________________________________________________________ 

Net income..........................     758.1                                            758.1
Change in net unrealized capital 
  gains.............................    (501.4)                           (501.4)
Class C Voting Manditorily
  Convertible Preferred Stock
  issued for U.S. Healthcare
  merger (11,655,546 shares)........     865.4      865.4
Common stock issued for U.S.
  Healthcare merger (34,988,615
  shares)...........................   2,580.1                2,580.1
Stock options issued for U.S.
  Healthcare merger.................      24.8                   24.8
Common stock issued for benefit 
  plans and other (1,205,185 shares)      63.0                   63.0
Common stock dividends..............    (140.0)                                          (140.0)       
Preferred stock dividends...........     (11.2)                                           (11.2)
Treasury stock retired..............         -                  (12.1)                             12.1 
                                     __________________________________________________________________ 

Balances at September 30, 1996       $10,911.6 $    865.4   $ 4,104.0  $   139.7      $ 5,802.5 $     -
_______________________________________________________________________________________________________
                                     __________________________________________________________________

<FN>

See Condensed Notes to Financial Statements.

</TABLE>


<PAGE> 7
                          AETNA INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                           Nine Months Ended
                                                                              September 30,     
                                                                        ________________________
(Millions)                                                                 1997           1996
                                                                           ____           ____
<S>                                                                     <C>            <C>
Cash Flows from Operating Activities:
   Net income........................................................   $   627.2      $   758.1
   Adjustments to reconcile net income to net
    cash used for operating activities:
      Income from Discontinued Operations............................           -         (182.2)
      Decrease in accrued investment income..........................        20.3           39.3
      Increase in premiums due and other receivables.................      (254.9)        (151.6)
      Increase in deferred policy acquisition costs..................      (216.3)        (186.7)
      Depreciation and amortization..................................       392.0          206.9 
      Increase (decrease) in income taxes............................       163.0         (177.1)
      Net (increase) decrease in other assets and other liabilities..      (923.6)         131.0
      Decrease in insurance liabilities..............................      (148.3)      (1,208.1)
      Net realized capital gains.....................................      (129.9)         (73.9)
      Gain on sale of Discontinued Operations........................           -         (263.7)
      Amortization of net investment discounts.......................      (111.4)         (95.9)
      Other, net.....................................................         9.1           15.9
                                                                        _________      _________
        Net cash used for operating activities.......................      (572.8)      (1,188.0)
                                                                        _________      _________ 
Cash Flows from Investing Activities:
   Proceeds from sales of:
      Debt securities available for sale.............................    12,098.5       10,373.6
      Equity securities..............................................       551.0          405.0
      Mortgage loans.................................................       125.8          104.7
      Real estate....................................................       411.4          387.7
      Other investments..............................................       458.8          745.7
      Short-term investments.........................................    12,934.6       27,947.7
      Discontinued Operations........................................           -        4,134.1
   Investment maturities and repayments of:
      Debt securities available for sale.............................     2,990.9        2,579.1
      Mortgage loans.................................................       766.6        1,123.3
   Cost of investments in:
      Debt securities available for sale.............................   (14,817.1)     (11,899.8)
      Equity securities..............................................      (479.9)        (777.1)
      Mortgage loans.................................................      (210.6)        (282.6)
      Real estate....................................................       (44.7)         (50.7)
      Other investments..............................................      (516.5)        (805.3)
      Short-term investments.........................................   (13,305.4)     (27,905.1)
      U.S. Healthcare................................................           -       (5,243.9)
   Increase in property and equipment................................       (46.8)         (67.4)
   Decrease (increase) in Separate Accounts..........................        23.9           (2.0)
   Other, net........................................................        48.3           62.5
                                                                        _________      _________
        Net cash provided by investing activities....................       988.8          829.5
                                                                        _________      _________
Cash Flows from Financing Activities:
   Deposits and interest credited for investment contracts...........     1,424.6        1,456.4
   Withdrawals of investment contracts...............................    (1,896.5)      (2,647.2)
   Issuance of long-term debt........................................         1.2        1,389.3
   Repayment of long-term debt.......................................        (4.1)             -
   Common stock issued under benefit plans and other.................       131.0           56.5
   Common stock acquired.............................................      (301.6)             -
   Net increase (decrease) in short-term debt........................       234.5          (23.4)
   Dividends paid to shareholders....................................      (131.4)        (193.2)
                                                                        _________      _________ 
        Net cash (used for) provided by financing activities.........      (542.3)          38.4
                                                                        _________      _________
Effect of exchange rate changes on cash and cash equivalents.........        (3.0)            .1
                                                                        _________      _________
Net decrease in cash and cash equivalents. ..........................      (129.3)        (320.0)
Cash acquired from U.S. Healthcare...................................           -          766.6
Cash and cash equivalents, beginning of period.......................     1,462.6        1,712.7
                                                                        _________      _________
Cash and cash equivalents, end of period.............................   $ 1,333.3      $ 2,159.3
                                                                        _________      _________
                                                                        _________      _________

Supplemental Cash Flow Information:
   Interest paid.....................................................   $   221.3      $   113.8
                                                                        _________      _________
                                                                        _________      _________
   Income taxes paid ................................................   $   287.4      $   206.4
                                                                        _________      _________
                                                                        _________      _________
<FN>
See Condensed Notes to Financial Statements.
</TABLE>

<PAGE> 8

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS

(1)  Summary of Significant Accounting Policies

Basis of Presentation
The consolidated financial statements include Aetna Inc. and its 
majority-owned subsidiaries (collectively, the "Company"), 
including Aetna Services, Inc. ("Aetna Services") (formerly Aetna 
Life and Casualty Company) and Aetna U.S. Healthcare Inc. ("Aetna 
U.S. Healthcare") (formerly U.S. Healthcare, Inc. ("U.S. 
Healthcare")).  Less than majority-owned entities in which the 
Company has at least a 20% interest are reported on the equity 
basis.  These consolidated financial statements have been prepared 
in accordance with generally accepted accounting principles and 
are unaudited.  Certain reclassifications have been made to 1996 
financial information to conform to the 1997 presentation.  These 
interim statements necessarily rely heavily on estimates, 
including assumptions as to annualized tax rates.  In the opinion 
of management, all adjustments necessary for a fair statement of 
results for the interim periods have been made.  All such 
adjustments are of a normal, recurring nature.  The accompanying 
condensed consolidated financial statements should be read in 
conjunction with the consolidated financial statements and related 
notes as presented in the Company's 1996 Annual Report on 
Form 10-K.  Certain financial information that is normally 
included in annual financial statements prepared in accordance 
with generally accepted accounting principles, but that is not 
required for interim reporting purposes, has been condensed or 
omitted.

(2) Future Application of Accounting Standards

Financial Accounting Standard ("FAS") No. 125, Accounting for 
Transfers and Servicing of Financial Assets and Extinguishments of 
Liabilities, was issued in June 1996 and provides accounting and 
reporting standards for transfers of financial assets and 
extinguishments of liabilities.

FAS No. 125 is effective for 1997 financial statements; however, 
certain provisions relating to accounting for repurchase 
agreements and securities lending are not effective until January 
1, 1998.  Provisions effective in 1997 did not have a material 
effect on the Company's financial position or results of 
operations.  The Company does not expect adoption of this 
statement for provisions effective in 1998 to have a material 
effect on its financial position or results of operations.


<PAGE> 9

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(2) Future Application of Accounting Standards (Continued)

FAS No. 128, Earnings per Share, was issued in February 1997.  
This statement provides new accounting and reporting standards for 
earnings per share.  It will replace the currently used primary 
and fully diluted earnings per share with basic and diluted 
earnings per share.  Basic earnings per share excludes dilution 
and is computed by dividing income available to common 
shareholders by the weighted average number of common shares 
outstanding for the period.  Diluted earnings per share represents 
the potential dilution that could occur if all stock options and 
other stock-based awards, as well as convertible securities, were 
exercised and converted into common stock if their effect is 
dilutive.  This statement, effective for year-end 1997 financial 
statements, requires that prior period earnings per share data be 
restated.  The Company does not expect adoption of this statement 
to have a material impact on earnings per common share amounts.

FAS No. 130, Reporting Comprehensive Income, was issued in June 
1997 and establishes standards for the reporting and presentation 
of comprehensive income and its components in a full set of 
financial statements.  Comprehensive income encompasses all 
changes in shareholders' equity (except those arising from 
transactions with owners) and includes net income, net unrealized 
capital gains or losses on available for sale securities and 
foreign currency translation adjustments.  As this new standard 
only requires additional information in a financial statement, it 
will not affect the Company's financial position or results of 
operations.  FAS No. 130 is effective for fiscal years beginning 
after December 15, 1997, with earlier application permitted.  The 
Company is currently evaluating the presentation alternatives 
permitted by the statement.

FAS No. 131, Disclosures about Segments of an Enterprise and 
Related Information, was issued in June 1997 and establishes 
standards for the reporting of information relating to operating 
segments in annual financial statements, as well as disclosure of 
selected information in interim financial reports.  This statement 
supersedes FAS No. 14, Financial Reporting for Segments of a 
Business Enterprise, which requires reporting segment information 
by industry and geographic area (industry approach).  Under FAS 
No. 131, operating segments are defined as components of a company 
for which separate financial information is available and is used 
by management to allocate resources and assess performance 
(management approach).  This statement is effective for year-end 
1998 financial statements.  Interim financial information will be 
required beginning in 1999 (with comparative 1998 information).  
The Company does not anticipate that this standard will 
significantly impact the composition of its current operating 
segments, which are consistent with the management approach.


<PAGE> 10

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(3)  Earnings Per Common Share

Primary earnings per common share are computed using net income 
less preferred stock dividends divided by the weighted average 
number of common shares outstanding (including common share 
equivalents). Fully diluted earnings per common share are computed 
using net income divided by the weighted average number of common 
shares outstanding (including common share equivalents and other 
potentially dilutive securities).  In determining primary earnings 
per common share, the 6.25% Class C Voting Mandatorily Convertible 
Preferred Stock ("Class C Stock") is not considered to be a common 
stock equivalent.  The Class C Stock is included in the 
calculation of the Company's fully diluted earnings per common 
share.  The weighted average number of shares of Class C Stock 
outstanding was 11.7 million for the three and nine months ended 
September 30, 1997.  There is not a material difference between 
primary and fully diluted earnings per common share.

<PAGE> 11

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                 (Continued)

(4)  Merger with U.S. Healthcare

The merger with U.S. Healthcare was consummated on July 19, 1996, 
and the Company's consolidated results of operations include U.S. 
Healthcare from that date.

The unaudited pro forma information below presents combined 
results of the Company's operations as if the merger with U.S. 
Healthcare (as well as the sale of Aetna's property-casualty 
operations - see Note 5) had occurred on January 1, 1996 and 
reflects adjustments which include interest expense related to the 
assumed financing of a portion of the cash consideration paid, 
interest income foregone related to the balance of the cash 
consideration paid, amortization of goodwill and other acquired 
intangible assets, and adjustments to conform U.S. Healthcare's 
accounting policies with Aetna Services' and to remove the effect 
of merger-related costs incurred by U.S. Healthcare prior to the 
merger.  No adjustment has been made to give effect to any 
synergies which may be realized in future periods as a result of 
the merger.

The unaudited pro forma information is not necessarily indicative 
of the consolidated results of operations of the combined company 
had the merger occurred at the beginning of 1996, nor is it 
necessarily indicative of future results.

<TABLE>
<CAPTION>
                                                  Three Months Ended    Nine Months Ended
(in millions, except per common share data)       September 30, 1996    September 30, 1996
___________________________________________       ___________________   __________________
<S>                                                   <C>                   <C>

Revenue                                               $ 4,389.6             $13,070.0
                                                      _________             _________
                                                      _________             _________

Net realized capital gains (losses)
  included in revenue                                 $     (.8)            $    68.4
                                                      _________             _________
                                                      _________             _________

Income before income taxes                            $   183.7             $   503.5

Income taxes                                               78.6                 222.5
                                                      _________             _________

Net income                                            $   105.1             $   281.0
                                                      _________             _________
                                                      _________             _________

Net income per common share                           $     .60             $    1.58
                                                      _________             _________
                                                      _________             _________

</TABLE>


<PAGE> 12

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(5)  Other Acquisitions and Dispositions

On April 2, 1996, the Company sold its property-casualty 
operations to an affiliate of The Travelers Insurance Group Inc. 
("Travelers") for approximately $4.1 billion in cash.  The sale 
resulted in an after-tax gain of $264 million ($218 million 
pretax).

The operating results of the property-casualty operations were 
presented as Discontinued Operations through the sale date.  
Operating results for the period from January 1 to April 2, 1996 
were:

<TABLE>
<CAPTION>
(Millions)                                          1996     
_____________________________________________________________
<S>                                                 <C>

Total revenue                                       $ 1,539.3
_____________________________________________________________
                                                    _________
Income before taxes                                 $   262.7
Income taxes                                             80.5
                                                    _________
Net income                                          $   182.2
_____________________________________________________________
                                                    _________

</TABLE>

As a result of the sale, the Company retained no property-casualty 
liabilities other than those associated with indemnifying 
Travelers for a portion of certain potential liability exposures.  
While there can be no assurances, management currently does not 
believe that the aggregate ultimate loss arising from these 
indemnifications, if any, will be material to the annual net 
income, liquidity or financial condition of the Company, although 
it is reasonably possible.

In April 1997, the Company acquired a 49.0% stake in a joint 
venture formed with Sul America Seguros, Brazil's largest 
insurance company.  The joint venture provides health and life 
insurance, as well as private pension plan, products.  The joint 
venture is being accounted for on the equity basis.  The initial 
purchase price of approximately $300 million was funded through 
the issuance of commercial paper.

On May 1, 1997, the Company sold Aetna Professional Management 
Corporation, a physician management business.  The sale resulted 
in an after-tax capital loss of $44 million ($43 million pretax).

On August 3, 1997, the Company sold Healthcare Data Interchange 
Corporation, a provider of health care electronic data interchange 
services.  The sale resulted in an after-tax capital gain of $21 
million ($36 million pretax).

<PAGE> 13

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(6)  Investments

Net investment income includes amounts allocable to experience 
rated contractholders of $333 million and $345 million for the 
three months ended September 30, 1997 and 1996, respectively, and 
$1,006 million and $1,042 million for the nine months ended 
September 30, 1997 and 1996, respectively.  Interest credited to 
contractholders is included in current and future benefits.

Net realized capital gains allocable to experience rated 
contractholders of $93 million and $30 million for the three 
months ended September 30, 1997 and 1996, respectively, and $141 
million and $114 million for the nine months ended September 30, 
1997 and 1996, respectively, were deducted from net realized 
capital gains as reflected on the Consolidated Statements of 
Income, and an offsetting amount is reflected on the Consolidated 
Balance Sheets in policyholders' funds left with the Company.

The total recorded investment in mortgage loans that are 
considered to be impaired (including problem loans, restructured 
loans and potential problem loans) and related specific reserves 
are presented in the table below.

<TABLE>
<CAPTION>
                                              September 30, 1997           December 31, 1996  
                                             ____________________       ______________________
                                             Total                      Total 
                                             Recorded     Specific      Recorded      Specific
(Millions)                                   Investment   Reserves      Investment    Reserves
______________________________________________________________________________________________
<S>                                          <C>          <C>           <C>           <C>

Supporting discontinued products             $   328.4    $    47.2     $   387.3     $   86.9
Supporting experience rated products             177.3         38.0         258.3         40.0
Supporting remaining products                    101.0         15.3         160.1         17.2
                                             _________________________________________________
 Total Impaired Loans                        $   606.7(1) $   100.5     $   805.7(1)  $  144.1
______________________________________________________________________________________________
                                             _________________________________________________
<FN>
(1)  Includes impaired loans of $207.6 million and $227.0 million at September 30, 1997 
    and December 31, 1996, respectively, for which no specific reserves are considered 
    necessary.
</TABLE>


<PAGE> 14

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(6) Investments (Continued)

The activity in the specific and general reserves for the nine 
months ended September 30, 1997 and the twelve months ended 
December 31, 1996 is summarized below:

<TABLE>
<CAPTION>
                                                          Supporting 
                                             Supporting   Experience    Supporting
                                             Discontinued Rated         Remaining             
(Millions)                                   Products     Products      Products      Total   
______________________________________________________________________________________________
<S>                                          <C>          <C>           <C>           <C>

Balance at December 31, 1995                 $   287.5    $   228.3     $    89.1     $  604.9
                                                                                              
                                                                                              
Credited to net realized capital gains               -            -         (33.0)       (33.0)
Credited to other accounts(1)                    (10.0)       (57.6)            -        (67.6)
Principal write-offs                            (140.8)       (96.0)        (20.5)      (257.3)
______________________________________________________________________________________________ 
Balance at December 31, 1996(2)                  136.7         74.7          35.6        247.0
                                                                                              
                                                                                              
Charged to net realized capital gains                -            -         (10.6)       (10.6)
Credited to other accounts(1)                    (25.0)       (20.0)           .6        (44.4)
Principal write-offs                             (18.8)        (1.5)         (3.9)       (24.2)
______________________________________________________________________________________________ 
Balance at September 30, 1997 (2)            $    92.9    $    53.2     $    21.7     $  167.8
______________________________________________________________________________________________
                                             _________________________________________________
<FN>

(1)  Reflects adjustments to reserves related to assets supporting experience rated products, 
     discontinued products and participating policyholder products which do not affect the 
     Company's results of operations.
(2)  Total reserves at September 30, 1997 and December 31, 1996 include $100.5 million and 
     $144.1 million of specific reserves, respectively, and $67.3 million and $102.9 million 
     of general reserves, respectively.
</TABLE>

Income earned (pretax) and cash received on the average recorded 
investment in impaired loans was as follows:

<TABLE>
<CAPTION>
                                         Three Months Ended              Nine Months Ended
                                         September 30, 1997              September 30, 1997    
                                      __________________________     _________________________ 
                                      Average                        Averaged
                                      Impaired  Income  Cash         Impaired  Income  Cash  
(Millions)                            Loans     Earned  Received     Loans     Earned  Received
________________________________________________________________     __________________________
<S>                                   <C>       <C>     <C>          <C>       <C>     <C>   

Supporting discontinued products      $  350.0  $ 13.9  $  8.5       $  368.3  $ 31.4  $ 24.3
Supporting experience rated products     195.1     5.7     3.5          216.4    14.1    11.2
Supporting remaining products            109.4     4.1     2.3          125.7     9.2     7.1
                                      _______________________________________________________
  Total                               $  654.5  $ 23.7  $ 14.3       $  710.4  $ 54.7  $ 42.6
_____________________________________________________________________________________________
                                      _______________________________________________________
</TABLE>

<TABLE>
<CAPTION>
                                         Three Months Ended              Nine Months Ended
                                         September 30, 1996              September 30, 1996     
                                      __________________________     __________________________ 
                                      Average                        Averaged
                                      Impaired  Income  Cash         Impaired  Income  Cash  
(Millions)                            Loans     Earned  Received     Loans     Earned  Received
________________________________________________________________     __________________________
<S>                                   <C>       <C>     <C>          <C>       <C>     <C>   

Supporting discontinued products      $  744.9  $ 17.5  $ 16.8       $  711.1  $ 47.5  $ 48.4 
Supporting experience rated products     509.4     8.5     8.4          505.7    28.3    28.0
Supporting remaining products            219.6     4.5     4.4          222.1    14.2    14.1
                                      _______________________________________________________
  Total                               $1,473.9  $ 30.5  $ 29.6       $1,438.9  $ 90.0  $ 90.5
_____________________________________________________________________________________________
                                      _______________________________________________________
</TABLE>


<PAGE> 15

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(7)  Supplemental Cash Flow Information

Significant noncash investing and financing activities include 
acquisition of real estate through foreclosures of mortgage loans 
amounting to $25 million and $75 million for the nine months ended 
September 30, 1997 and 1996, respectively.

(8)  Financial Instruments

The Company engages in hedging activities to manage interest rate, 
price and currency risks.  Such hedging activities have 
principally consisted of using off-balance-sheet instruments such 
as those presented in the table below.  (See General Account 
Investments - Use of Derivatives and Other Investments on page 49 
of the Management's Discussion and Analysis of Financial Condition 
and Results of Operations and Note 5 of the Company's 1996 Annual 
Report for a description of the Company's hedging activities).  
The notional amounts, carrying values and estimated fair values of 
the Company's off-balance-sheet and other financial instruments 
are as follows (in millions):

<TABLE>
<CAPTION>
                                                         Carrying
                                                         Value
                                             Notional    Asset        Fair
September 30, 1997                           Amount      (Liability)  Value   
______________________________________________________________________________
<S>                                          <C>         <C>          <C>

Foreign exchange forward contracts - sell:
  Related to net investments in foreign
    affiliates                               $ 149.9     $   (.3)     $   (.2) 
  Related to investments in nondollar
    denominated assets                          42.5         (.6)         (.6)
Foreign exchange forward contracts - buy:
  Related to investments in nondollar
    denominated assets                          25.4          .9           .9
Futures contracts to purchase
    debt securities                            247.0         2.3          2.3
Interest rate swaps                             43.0           -          6.5
Warrants to purchase securities                 20.1         6.7          6.7

</TABLE>


<PAGE> 16

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(9) Severance and Facilities Charges

During 1996, the Company established severance and facilities 
reserves in the Aetna U.S. Healthcare, Aetna Retirement Services 
and Corporate segments to reflect the integration of the health 
businesses and certain other actions taken or to be taken in order 
to make its businesses more competitive.

Activity for the nine months ended September 30, 1997 within the 
severance and facilities reserves (pretax, in millions) and 
positions eliminated related to such actions were as follows:

<TABLE>
<CAPTION>
                                                  Reserve             Positions
_______________________________________________________________________________
<S>                                               <C>                 <C>

Balance at December 31, 1996                      $ 725.2                 6,952
Actions taken(1)                                   (196.7)               (2,275)
Adjustments(2)                                      (45.0)               (1,200)
                                                  ________            __________

   Balance at September 30, 1997                  $ 483.5                 3,477
_______________________________________________________________________________
                                                  _____________________________
<FN>
(1)  Includes $98.4 million of severance-related actions.
(2)  Reflects reductions in anticipated severance actions resulting from higher
     attrition than was contemplated in the establishment of the reserve in the
     Aetna U.S. Healthcare segment.
</TABLE>

The 2,275 positions eliminated during the nine months ended 
September 30, 1997 related to the following segments:  89% - Aetna 
U.S. Healthcare, 6% - Aetna Retirement Services and 5% - 
Corporate.  The Aetna U.S. Healthcare severance actions are 
expected to be substantially completed by the end of 1998.  The 
Aetna Retirement Services severance actions are expected to be 
substantially completed by March 31, 1998.  The Corporate 
severance actions and vacating of certain leased office space are 
expected to be substantially completed by the end of 1997.  In 
connection with the sale of the Company's property-casualty 
operations, the Company vacated, and the purchaser subleased, at 
market rates for a period of eight years, the space that the 
Company occupied in the CityPlace office facility in Hartford.  
The remaining lease payments (net of expected subrentals) on the 
facilities (other than the CityPlace office facility) are payable 
over approximately the next three years.


<PAGE> 17

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(10)  Discontinued Products

The Company discontinued the sale of its fully guaranteed large 
case pension products (single-premium annuities ("SPAs")and 
guaranteed investment contracts ("GICs")) in 1993.  Under the 
Company's accounting for these discontinued products, a reserve 
for anticipated future losses from these products was established, 
and the reserve is reviewed by management quarterly.  As long as 
the reserve continues to represent management's then best estimate 
of expected future losses, results of operations of the 
discontinued products, including net realized capital gains and 
losses, are credited/charged to the reserve and do not affect the 
Company's results of operations.  As a result of management's 
detailed review in the first quarter of 1997, the Company released 
$173 million (pretax), constituting the remaining portion of the 
reserve related to GICs, primarily as a result of continued 
favorable developments in real estate markets. The current reserve 
reflects management's best estimate of anticipated future net 
losses.  To the extent that aggregate future losses on GICs and 
SPAs are greater or less than anticipated, the Company's results 
of operations would be adversely or positively affected, 
respectively.  The discussion below presents information for the 
discontinued SPA and GIC products on a combined basis.  (Refer to 
the Company's 1996 Annual Report for a more complete discussion of 
the reserve for anticipated future losses on discontinued 
products.)

At the time of discontinuance, a receivable from Large Case 
Pensions' continuing products equivalent to the net present value 
of the anticipated cash flow shortfalls was established for the 
discontinued products. Interest on the receivable is accrued at 
the discount rate which was used to calculate the loss on 
discontinuance. The offsetting payable, on which interest is 
similarly accrued, is reflected in continuing products.  Interest 
on the payable generally offsets the investment income on the 
assets available to fund the shortfall.  At September 30, 1997, 
the receivable from continuing products, net of related deferred 
taxes payable of $40 million on the accrued interest income, was 
$510 million.  During 1996, $315 million of the receivable, net of 
the related deferred taxes payable on the accrued interest income 
of $19 million, was funded from continuing products to meet 
liquidity needs from maturing GICs.  As of September 30, 1997, no 
additional funding of the receivable had taken place.  This amount 
is eliminated in consolidation.


<PAGE> 18

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(10)  Discontinued Products (Continued)

Results of discontinued products were as follows (pretax, in millions):

<TABLE>
<CAPTION>
                                                     Charged
                                                     (Credited) to
                                                     Reserve for
                                                     Future
Three months ended September 30, 1997  Results       Losses        Net(1) 
__________________________________________________________________________
<S>                                     <C>          <C>           <C> 

Net investment income                   $ 151.1      $     -       $ 151.1
Net realized capital gains                 48.6        (48.6)            -
Interest earned on receivable                                             
  from continuing products                  8.3            -           8.3
Other income                                7.9            -           7.9 
                                        __________________________________ 
     Total revenue                        215.9        (48.6)        167.3
                                        __________________________________

Current and future benefits               160.4          3.2         163.6
Operating expenses                          3.7            -           3.7
                                        __________________________________
     Total benefits and expenses          164.1          3.2         167.3
                                        __________________________________

Results of discontinued products        $  51.8      $ (51.8)      $     -
__________________________________________________________________________
                                        __________________________________


                                                     Charged
                                                     (Credited) to
                                                     Reserve for
                                                     Future
Three months ended September 30, 1996   Results      Losses        Net(1) 
__________________________________________________________________________
<S>                                     <C>          <C>           <C>

Net investment income                   $ 188.6      $      -      $ 188.6
Net realized capital gains                 12.1         (12.1)           -
Interest earned on receivable                  
  from continuing products                 11.8             -         11.8
Other income                               16.7             -         16.7
                                        __________________________________
     Total revenue                        229.2         (12.1)       217.1
                                        __________________________________

Current and future benefits               189.4          24.7        214.1
Operating expenses                          3.0             -          3.0
                                        __________________________________
     Total benefits and expenses          192.4          24.7        217.1
                                        __________________________________

Results of discontinued products        $  36.8       $ (36.8)     $     -
__________________________________________________________________________
                                        __________________________________
<FN>

(1)  Amounts are reflected in the 1997 and 1996 Consolidated Statements of Income, except for interest 
     earned on the receivable from continuing products which is eliminated in consolidation.
</TABLE>

<PAGE> 19

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(10)  Discontinued Products (Continued)

<TABLE>
<CAPTION>
                                                     Charged
                                                     (Credited) to
                                                     Reserve for
                                                     Future
Nine months ended September 30, 1997   Results       Losses        Net(1) 
__________________________________________________________________________
<S>                                     <C>          <C>           <C> 

Net investment income                   $ 504.3      $      -      $ 504.3
Net realized capital gains                142.9        (142.9)           -
Interest earned on receivable
  from continuing products                 24.9             -         24.9
Other income                               17.9             -         17.9 
                                        __________________________________ 
     Total revenue                        690.0        (142.9)       547.1
                                        __________________________________

Current and future benefits               495.5          42.1        537.6
Operating expenses                          9.5             -          9.5
                                        __________________________________
     Total benefits and expenses          505.0          42.1        547.1
                                        __________________________________

Results of discontinued products        $ 185.0      $ (185.0)     $     -
__________________________________________________________________________
                                        __________________________________


                                                     Charged
                                                     (Credited) to
                                                     Reserve for
                                                     Future
Nine months ended September 30, 1996    Results      Losses        Net(1) 
__________________________________________________________________________
<S>                                     <C>          <C>           <C>

Net investment income                   $ 612.4      $      -      $ 612.4
Net realized capital gains                 36.1         (36.1)           -
Interest earned on receivable
  from continuing products                 38.0             -         38.0
Change in Accounting Policy -
  FAS No. 121(2)                            8.3             -          8.3
Other income                               28.5             -         28.5
                                        __________________________________
     Total revenue                        723.3         (36.1)       687.2
                                        __________________________________

Current and future benefits               598.0          74.8        672.8
Operating expenses                         14.4             -         14.4
                                        __________________________________
     Total benefits and expenses          612.4          74.8        687.2
                                        __________________________________

Results of discontinued products        $ 110.9       $(110.9)     $     -
__________________________________________________________________________
                                        __________________________________
<FN>

(1)  Amounts are reflected in the 1997 and 1996 Consolidated Statements of Income, except for interest 
     earned on the receivable from continuing products which is eliminated in consolidation.
(2)  Refer to Note 1 in the Company's 1996 Annual Report for a discussion of FAS No. 121.
</TABLE>


<PAGE> 20

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(10)  Discontinued Products (Continued)

Assets and liabilities of discontinued products at September 30, 1997 
were as follows (in millions):

<TABLE>
<CAPTION>
<S>                                                    <C>

Debt securities available for sale                     $5,145.5
Mortgage loans                                          2,458.8
Real estate                                               214.4
Short-term and other investments                          214.1
                                                       ________
   Total investments                                    8,032.8
Current and deferred income taxes                         160.2
Receivable from continuing products                       549.6
                                                       ________
   Total assets                                        $8,742.6
_______________________________________________________________
                                                       ________
Future policy benefits                                 $4,786.2
Policyholders' funds left with the Company              2,568.5
Reserve for anticipated future losses                          
  on discontinued products                                999.3
Other                                                     388.6
                                                       ________

   Total liabilities                                   $8,742.6
_______________________________________________________________
                                                       ________
</TABLE>

Net unrealized capital gains on available for sale debt securities 
are included above in other liabilities and are not reflected in 
consolidated shareholders' equity.  The reserve for anticipated 
future losses is included in future policy benefits on the 
Consolidated Balance Sheets.

The activity in the reserve for anticipated future losses on 
discontinued products during the first nine months of 1997 was as 
follows (pretax, in millions):

<TABLE>
<CAPTION>
<S>                                                    <C>

Reserve at December 31, 1996                           $  986.8
Results of discontinued products                          185.0
Reserve reduction                                        (172.5)
                                                       ________ 
Reserve at September 30, 1997                          $  999.3
_______________________________________________________________
                                                       ________
</TABLE>


<PAGE> 21

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(11)  Debt and Guarantee of Debt Securities

Aetna Inc. has fully and unconditionally guaranteed the payment of 
all principal, premium, if any, and interest on all outstanding 
debt securities of Aetna Services, including the $348,000,000 
9.5% Subordinated Debentures due 2024 (the "Subordinated 
Debentures") issued to Aetna Capital L.L.C., a wholly owned 
subsidiary of Aetna Services (collectively, the "Aetna Services 
Debt").  Aetna Capital L.L.C. has issued $275,000,000 of 
redeemable preferred stock and the Subordinated Debentures 
represent substantially all of the assets of Aetna Capital L.L.C.

Aetna Services has a revolving credit facility in an aggregate 
amount of $1.5 billion with a worldwide group of banks that 
terminates in June 2001.  Various interest rate options are 
available under the facility and any borrowings mature on the 
expiration date of the credit commitment.  Aetna Services pays 
facility fees ranging from .065% to .20% per annum, depending upon 
its long-term senior unsecured debt rating.  The facility fee at 
September 30, 1997 is at an annual rate of .08%.  The facility 
also supports Aetna Services' commercial paper borrowing program.  
As a guarantor of any amounts outstanding under the credit 
facility, Aetna Inc. is required to maintain shareholders' equity, 
excluding net unrealized capital gains or losses, of at least $7.5 
billion.

<PAGE> 22

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(11) Debt and Guarantee of Debt Securities (Continued)

Separate financial statements of Aetna Services have not been 
presented herein or in any separate reports filed with the 
Securities and Exchange Commission because management has 
determined that such financial statements would not be material to 
holders of the Aetna Services Debt.  Summarized consolidated 
financial information for Aetna Services is as follows (in 
millions):

Balance Sheets Information:

<TABLE>
<CAPTION>
                                         September 30,         December 31,
                                             1997                 1996    
                                         ____________         ____________
<S>                                      <C>                   <C>

Total investments (excluding
  Separate Accounts)                     $  41,866.6           $  42,555.0
                                         ___________           ___________
                                         ___________           ___________

Total assets                             $  88,571.1           $  83,171.6
                                         ___________           ___________
                                         ___________           ___________

Total insurance liabilities              $  39,104.1           $  40,357.4
                                         ___________           ___________
                                         ___________           ___________

Total liabilities                        $  85,646.5           $  80,352.8
                                         ___________           ___________
                                         ___________           ___________

Total redeemable preferred stock         $     275.0           $     275.0
                                         ___________           ___________
                                         ___________           ___________

Total shareholder's equity               $   2,649.5           $   2,543.8
                                         ___________           ___________
                                         ___________           ___________
</TABLE>

Statements of Income Information:

<TABLE>
<CAPTION>
                                        Three Months Ended    Nine Months Ended
                                        September 30, 1997    September 30, 1997
                                        __________________    __________________
<S>                                      <C>                   <C>             

Total revenue                            $   2,566.6           $   9,008.4

Total benefits and expenses                  2,246.2               7,904.3
                                         ___________           ___________
                                                                          

Income before income taxes               $     320.4           $   1,104.1
                                         ___________           ___________
                                         ___________           ___________

Net income                               $     207.9           $     707.3
                                         ___________           ___________
                                         ___________           ___________

</TABLE>

<PAGE> 23

                          AETNA INC. AND SUBSIDIARIES

                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  (Continued)

(11) Debt and Guarantee of Debt Securities (Continued)

The amount of dividends which may be paid to Aetna Services or 
Aetna U.S. Healthcare by their domestic insurance and HMO 
subsidiaries at September 30, 1997 without prior approval by state 
regulatory authorities is limited to approximately $107 million in 
the aggregate.  There are no such restrictions on distributions 
from Aetna Services or Aetna U.S. Healthcare to Aetna Inc. or on 
distributions from Aetna Inc. to its shareholders.

(12)  Litigation

The Company is involved in numerous lawsuits arising, for the most 
part, in the ordinary course of its business operations, including 
litigation in its health business concerning benefit plan coverage 
and other decisions made by the Company, and alleged medical 
malpractice by participating providers.  While the ultimate 
outcome of litigation against the Company cannot be determined at 
this time, after consideration of the defenses available to the 
Company and any related reserves established, it is not expected 
to result in liability for amounts material to the financial 
condition of the Company, although it may adversely affect results 
of operations in future periods.

<PAGE> 24

           Independent Auditors' Review Report

The Board of Directors
Aetna Inc.:

We have reviewed the accompanying condensed consolidated balance 
sheet of Aetna Inc. and Subsidiaries as of September 30, 1997, and 
the related condensed consolidated statements of income for the 
three-month and nine-month periods ended September 30, 1997 and 
1996, and the related condensed consolidated statements of 
shareholders' equity and cash flows for the nine-month periods 
ended September 30, 1997 and 1996.  These condensed consolidated 
financial statements are the responsibility of the Company's 
management.

We conducted our review in accordance with standards established 
by the American Institute of Certified Public Accountants.  A 
review of interim financial information consists principally of 
applying analytical procedures to financial data and making 
inquiries of persons responsible for financial and accounting 
matters.  It is substantially less in scope than an audit 
conducted in accordance with generally accepted auditing 
standards, the objective of which is the expression of an opinion 
regarding the financial statements taken as a whole.  Accordingly, 
we do not express such an opinion.

Based on our review, we are not aware of any material 
modifications that should be made to the accompanying condensed 
consolidated financial statements for them to be in conformity 
with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted 
auditing standards, the consolidated balance sheet of Aetna Inc. 
and Subsidiaries as of December 31, 1996, and the related 
consolidated statements of income, shareholders' equity, and cash 
flows for the year then ended (not presented herein); and in our 
report dated February 4, 1997, we expressed an unqualified opinion 
on those consolidated financial statements.  In our opinion, the 
information set forth in the accompanying condensed consolidated 
balance sheet as of December 31, 1996, is fairly presented, in all 
material respects, in relation to the consolidated balance sheet 
from which it has been derived.




                                         /s/ KPMG PEAT MARWICK LLP
Hartford, Connecticut
November 3, 1997


<PAGE> 25

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

Management's Discussion and Analysis of Financial Condition and 
Results of Operations addresses the financial condition of Aetna 
Inc. and its subsidiaries (collectively, the "Company") as of 
September 30, 1997 and 1996, and its results of operations for the 
three and nine-month periods ended September 30, 1997 and 1996.

Consolidated Results of Operations
__________________________________

<TABLE>
<CAPTION>
Operating Summary
(Millions, except per common share data) Three Months Ended September 30,     Nine Months Ended September 30, 
                                         ________________________________     _______________________________ 
                                         1997         1996       % Change     1997         1996      % Change
                                         ____         ____       ________     ____         ____      ________
<S>                                      <C>          <C>        <C>          <C>          <C>       <C>     

Premiums.............................    $ 3,152.0    $ 2,722.0      15.8 %   $ 9,417.5    $ 6,328.0    48.8%
Net investment income................        818.9        897.9      (8.8)      2,506.1      2,678.0    (6.4)
Fees and other income................        567.7        558.5       1.6       1,693.8      1,624.8     4.2
Net realized capital gains...........         93.7          7.5         -         129.9         73.9    75.8
                                         _________    _________               _________    _________        
    Total revenue....................      4,632.3      4,185.9      10.7      13,747.3     10,704.7    28.4

Current and future benefits..........      3,318.3      2,894.3      14.6       9,684.0      7,241.9    33.7
Operating expenses...................        887.9        862.9       2.9       2,591.1      2,388.1     8.5
Interest expense.....................         60.3         50.8      18.7         177.1        111.1    59.4
Amortization of goodwill and 
 other acquired intangible assets....         96.0         75.1      27.8         284.0         80.8       -
Amortization of deferred policy 
 acquisition costs...................         58.6         48.4      21.1         159.4        123.5    29.1
Reductions of loss on discontinued 
 products............................            -            -         -        (172.5)      (170.0)    1.5
Severance and facilities charges
 (reserve reductions)................            -         49.0    (100.0)        (45.0)       441.7       -
                                         _________    _________               _________    _________        
    Total benefits and expenses......      4,421.1      3,980.5      11.1      12,678.1     10,217.1    24.1
                                         _________    _________               _________    _________        

Income from continuing operations 
 before income taxes.................        211.2        205.4       2.8       1,069.2        487.6   119.3
Income taxes.........................         93.4         83.0      12.5         442.0        175.4   152.0
                                         _________    _________               _________    _________        

Income from continuing operations....        117.8        122.4      (3.8)        627.2        312.2   100.9
Discontinued Operations, net of tax:
 Income from operations..............            -            -         -             -        182.2  (100.0)
 Gain on sale........................            -            -         -             -        263.7  (100.0)
                                         _________    _________               _________    _________         
    Net income.......................    $   117.8    $   122.4      (3.8)    $   627.2    $   758.1   (17.3)
                                         _________    _________               _________    _________         
                                         _________    _________               _________    _________         
    Net income applicable 
      to common ownership............    $   104.0    $   111.2      (6.5)    $   585.6    $   746.9   (21.6)
                                         _________    _________               _________    _________         
                                         _________    _________               _________    _________         

Net realized capital gains from
 continuing operations, net of 
 tax (included above)................    $    58.7    $     5.2         -     $    67.1    $    49.2    36.4
                                         _________    _________               _________    _________        
                                         _________    _________               _________    _________        

Results per common share:

Income from continuing operations....    $     .69    $     .77     (10.4)    $    3.87    $    2.39    61.9
Discontinued Operations, net of tax:
 Income from operations..............            -            -         -             -         1.44  (100.0)
 Gain on sale........................            -            -         -             -         2.09  (100.0)
                                         _________    _________               _________    _________         
    Net income.......................    $     .69    $     .77     (10.4)    $    3.87    $    5.92   (34.6)
                                         _________    _________               _________    _________         
                                         _________    _________               _________    _________         
</TABLE>


<PAGE> 26

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Overview
________

Consolidated Results

The Company reported income from continuing operations of 
$118 million and $627 million for the three and nine months ended 
September 30, 1997, respectively, compared with $122 million and 
$312 million for the same periods a year ago.  Excluding the 
factors below, income from continuing operations would have been 
$59 million and $422 million for the three and nine months ended 
September 30, 1997, respectively, and $149 million and $439 
million for the same periods a year ago.


         benefits in the first quarter of 1997 and the second 
         quarter of 1996 related to discontinued products reserve 
         reductions for Large Case Pensions; 

         benefits for the nine months ended September 30, 1997 
         related to reductions of Aetna U.S. Healthcare's 
         severance and facilities reserve and severance and 
         facilities charges for the nine months ended September 
         30, 1996 related to Aetna U.S. Healthcare;

         severance and facilities charges for the third quarter of 
         1996 related to Aetna Retirement Services ("ARS") and 
         also for the nine months ended September 30, 1996 related 
         to the sale of the Company's property-casualty 
         operations; and 

         net realized capital gains in all periods.

These results primarily reflect decreased earnings in Aetna U.S. 
Healthcare.  The three months ended September 30, 1997 also 
reflect increased earnings in Aetna Retirement Services and 
International and decreased earnings in Large Case Pensions.  The 
nine months ended September 30, 1997 also reflect increased 
earnings in Aetna Retirement Services, International and Large 
Case Pensions, offset by higher interest expense primarily due to 
additional debt incurred in connection with the financing of the 
U.S. Healthcare, Inc. ("U.S. Healthcare") merger.  (See "Aetna 
U.S. Healthcare" for a discussion of pro forma results as though 
the merger had occurred on January 1, 1996.)

<PAGE> 27

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Overview (Continued)
____________________

Underlying Business Results

          Aetna U.S. Healthcare's earnings declined during the 
          three and nine months ended September 30, 1997 due to 
          decreased earnings from health risk products resulting 
          from increased HMO medical costs partially offset by 
          increased earnings from group insurance and other health 
          products when compared to pro forma earnings for the 
          same periods a year ago.  

          Aetna Retirement Services' earnings improved during the 
          three and nine months ended September 30, 1997, 
          primarily reflecting improved financial services results 
          due to increased fee income earned on a growing base of 
          assets under management.

          International's earnings improved during the three and 
          nine months ended September 30, 1997, reflecting 
          earnings growth in Taiwan and favorable investment 
          performance in certain Asia Pacific and Latin American 
          operations partially offset by increased losses from 
          start-up operations, primarily those in the Philippines 
          and Argentina.  International's earnings for the nine 
          months ended September 30, 1997 also reflect earnings 
          from the Company's newly acquired Brazilian operations.

          Large Case Pensions' earnings decreased during the three 
          months ended September 30, 1997 reflecting decreased 
          investment income partially offset by lower expenses.  
          Earnings increased during the nine months ended 
          September 30, 1997 reflecting lower expenses partially 
          offset by decreased income on the declining capital in 
          this business.

          The Corporate segment reflects higher interest expense 
          in 1997, primarily resulting from additional debt 
          incurred in connection with the financing of the U.S. 
          Healthcare merger.  The segment also reflects the 
          absence, in 1997, of interest income earned in the 
          second quarter of 1996 on the reinvestment of proceeds 
          received from the sale of the Company's property-
          casualty operations (discussed below).

<PAGE> 28

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Overview (Continued)
____________________

Factors Affecting Comparison of Actual Results

The U.S. Healthcare merger, the property-casualty sale, reserve 
reductions for Large Case Pensions and certain other factors 
complicate the comparison of the Company's results for the periods 
presented.  Detailed information regarding certain of these 
factors (after tax) is set forth below.

Factors Primarily Related to the Merger

          Income from continuing operations for the three and nine 
          months ended September 30, 1997 includes U.S. Healthcare 
          results while income from continuing operations for the 
          same periods a year ago includes U.S. Healthcare results 
          for approximately two and one-half months of the third 
          quarter only.

          Income from continuing operations for the three and nine 
          months ended September 30, 1997 reflects an increase in 
          amortization of goodwill and other acquired intangible 
          assets of $18 million and $168 million, respectively, 
          primarily related to the amortization of intangible 
          assets created as a result of the U.S. Healthcare 
          merger.

          Income from continuing operations for the three and nine 
          months ended September 30, 1997 includes an increase in 
          interest expense of $6 million and $43 million, 
          respectively, primarily due to additional debt incurred 
          in connection with the financing of the U.S. Healthcare 
          merger.

          Income from continuing operations for the three and nine 
          months ended September 30, 1996 includes $7 million and 
          $37 million, respectively, of interest income earned on 
          the net proceeds received from the sale of the Company's 
          property-casualty operations.

          Income from continuing operations for the nine months 
          ended September 30, 1997 includes a benefit of $29 
          million related to reductions of Aetna U.S. Healthcare's 
          severance and facilities reserve.  (See "Severance and 
          Facilities Charges".)

          In connection with the merger, the Company issued 
          approximately 35.0 million shares of common stock and 
          11.7 million shares of mandatorily convertible preferred 
          stock.  The increase in the number of common shares 
          outstanding and the dividends on the mandatorily 
          convertible preferred stock affect the comparability of 
          per common share amounts.  (See Note 3 of Condensed 
          Notes to Financial Statements for further discussion.)


<PAGE> 29

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Overview (Continued)
____________________

Other Significant Factors

          Income from continuing operations for the three and nine 
          months ended September 30, 1996, includes severance and 
          facilities charges of $32 million and $287 million, 
          respectively, in connection with the Company's strategic 
          initiatives in order to make its continuing businesses 
          more competitive.  (See "Severance and Facilities 
          Charges".)

          Income from continuing operations for the nine months 
          ended September 30, 1997 and 1996 includes $108 million 
          and $111 million, respectively, of benefits from 
          reductions of the reserve for anticipated future losses 
          on discontinued products, primarily as a result of 
          continued favorable developments in real estate markets.  
          (See "Large Case Pensions - Discontinued Products".)

          Income from continuing operations for the three and nine 
          months ended September 30, 1997 includes $59 million and 
          $67 million, respectively, of net realized capital 
          gains, compared with $5 million and $49 million, 
          respectively, for the same periods a year ago.  Net 
          realized capital gains for the three and nine months 
          ended September 30, 1997 include a $21 million gain 
          related to the sale of Healthcare Data Interchange 
          Corporation ("HDIC"), a provider of health care 
          electronic data interchange services.  Net realized 
          capital gains for the nine months ended September 30, 
          1997 include a $34 million gain related to the sale of a 
          portion of the Company's investment in Travelers 
          Property Casualty Corp.  Net realized capital gains for 
          the nine months ended September 30, 1997 also include 
          losses of $44 million related to the disposition of 
          Aetna Professional Management Corporation ("APMC"), a 
          physician practice management business, which was 
          completed in the second quarter of 1997.  Net realized 
          capital gains for the nine months ended September 30, 
          1996 include a $25 million gain related to the sale of 
          Aetna Realty Investors ("ARI") and a $15 million gain 
          from the sale of an HMO subsidiary.

Net Income

The Company reported net income of $118 million and $627 million 
for the three and nine months ended September 30, 1997, 
respectively, and $122 million and $758 million, respectively, for 
the same periods a year ago.  Net income for the nine months ended 
September 30, 1996 includes a gain from the sale of the Company's 
property-casualty operations (reflected as Discontinued 
Operations) of $264 million and income from such operations of 
$182 million.


<PAGE> 30

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Merger with U.S. Healthcare and Property-Casualty Sale

Aetna Inc. became the parent corporation of Aetna Services, Inc. 
("Aetna Services") and Aetna U.S. Healthcare Inc. (formerly U.S. 
Healthcare) as a result of the merger transaction effected on July 
19, 1996.  The merger was accounted for as a purchase of U.S. 
Healthcare.  (See Note 4 of Condensed Notes to Financial 
Statements.)  Aetna sold its property-casualty operations on April 
2, 1996.  (See Note 5 of Condensed Notes to Financial Statements 
for a discussion of certain indemnifications and other information 
related to the property-casualty sale.)

This Overview is a summary of certain information that appears 
later in this Management's Discussion and Analysis.  Important 
additional information about the businesses' results for the three 
and nine months ended September 30, 1997 and 1996 and about the 
Company's financial condition and liquidity and capital resources 
follows.  Because it has been summarized, the information 
presented in the Overview is qualified by more detailed 
information appearing later.  Because of the importance of this 
detailed information, you should read this Management's Discussion 
and Analysis in its entirety.


<PAGE> 31

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Aetna U.S. Healthcare
_____________________

<TABLE>
<CAPTION>
Operating Summary
(Millions)                             Three Months Ended September 30,    Nine Months Ended September 30,
                                       ________________________________    _______________________________
                                       1997         1996       % Change    1997        1996       % Change
                                       ____         ____       ________    ____        ____       ________
<S>                                    <C>          <C>        <C>         <C>         <C>        <C>

Premiums.............................  $ 2,698.7    $ 2,315.4    16.6%     $ 8,122.1   $ 5,223.2     55.5%
Net investment income................      115.9        116.1     (.2)         328.7       307.1      7.0
Fees and other income................      355.5        387.8    (8.3)       1,121.9     1,125.0      (.3)
Net realized capital gains (losses)..       57.3         (1.3)      -           22.4        24.0     (6.7)
                                       _________    _________              _________   _________          
   Total revenue.....................    3,227.4      2,818.0    14.5        9,595.1     6,679.3     43.7

Current and future benefits..........    2,421.4      1,951.2    24.1        6,967.2     4,474.0     55.7
Operating expenses...................      622.3        627.0     (.7)       1,822.7     1,682.3      8.3
Amortization of goodwill and other 
 acquired intangible assets..........       90.9         74.1    22.7          271.8        78.3        -
Amortization of deferred policy 
 acquisition costs...................        2.9          3.7   (21.6)          16.0         8.8     81.8
Severance and facilities charges
 (reserve reductions)................          -            -       -          (45.0)       30.0        -
                                       _________    _________              _________   _________         
   Total benefits and expenses.......    3,137.5      2,656.0    18.1        9,032.7     6,273.4     44.0
                                       _________    _________              _________   _________         

Income before income taxes...........       89.9        162.0   (44.5)         562.4       405.9     38.6
Income taxes.........................       51.1         69.3   (26.3)         270.2       154.2     75.2
                                       _________    _________              _________   _________         

Net income...........................  $    38.8    $    92.7   (58.1)     $   292.2   $   251.7     16.1
                                       _________    _________              _________   _________         
                                       _________    _________              _________   _________         
Net realized capital gains (losses), 
 net of tax (included above).........  $    35.1    $     (.8)      -      $    (4.1)  $    16.8        -
                                       _________    _________              _________   _________         
                                       _________    _________              _________   _________         
</TABLE>

Aetna U.S. Healthcare's net income for the three and nine months 
ended September 30, 1997 decreased by $54 million and increased by 
$41 million, respectively, compared with the same periods a year ago.  
These results reflect amortization of goodwill and other acquired 
intangible assets ($75 million and $224 million after tax, for the 
three and nine months ended September 30, 1997, respectively, and $61 
million and $65 million, respectively, for the same periods a year 
ago) and net realized capital gains or losses.  Net income for the 
nine months ended September 30, 1997 reflects after-tax benefits of 
$29 million related to reductions in the severance and facilities 
reserve due to higher attrition than was contemplated in the 
establishment of the reserve.  Net income for the nine months ended 
September 30, 1996 reflects an after-tax severance and facilities 
charge of $20 million.  Excluding the above items, results for the 
three and nine months ended September 30, 1997 decreased $76 million 
and increased $171 million, respectively, from the prior year.  The 
decrease for the three months ended September 30, 1997 primarily 
reflects increased HMO medical costs, including an after-tax charge 
of $103 million related to a reestimation of HMO medical claims 
reserves associated with prior period claims (discussed below).  The 
increase for the nine months ended September 30, 1997, reflects the 
inclusion of U.S. Healthcare since July 19, 1996 partially offset by 
increased HMO medical costs.  (See Note 4 of Condensed Notes to 
Financial Statements.)

On August 3, 1997, the Company sold HDIC and recognized a gain of $21 
million after tax.  Net realized capital losses for the nine months 
ended September 30, 1997 also include after-tax losses of $44 million 
related to the disposition of APMC.  Net realized capital gains for 
the nine months ended September 30, 1996 include a $15 million after-
tax gain from the sale of an HMO subsidiary.  The earnings of HDIC, 
APMC and the HMO subsidiary were not material to the results of Aetna 
U.S. Healthcare.
                

<PAGE> 32

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Aetna U.S. Healthcare (Continued)
_________________________________

Aetna U.S. Healthcare's effective tax rates of 57% and 48% for the 
three and nine months ended September 30, 1997, respectively, when 
compared to 43% and 38% for the same periods a year ago, primarily 
reflect an increase in amortization of goodwill (which is 
nondeductible for income tax purposes) as well as for the nine 
months ended September 30, 1997, the tax treatment of the 
disposition of APMC.

The remainder of the discussion related to Aetna U.S. Healthcare 
presents 1996 results on a pro forma basis as if the merger had 
occurred at the beginning of 1996.

<TABLE>
<CAPTION>
Operating Summary
(Millions)                                  Pro Forma (1)                           Pro Forma (1)
                             Three Months   Three Months              Nine Months   Nine Months
                                 Ended          Ended                    Ended          Ended
                             September 30,  September 30,            September 30,  September 30,
                                 1997           1996      % Change       1997            1996     % Change
__________________________________________________________________   _____________________________________
<S>                          <C>            <C>           <C>        <C>            <C>           <C>

Premiums.................... $ 2,698.7      $ 2,529.5          6.7%  $ 8,122.1      $ 7,554.6          7.5%
Net investment income.......     115.9          119.7         (3.2)      328.7          333.8         (1.5)
Fees and other income.......     355.5          392.6         (9.4)    1,121.9        1,178.3         (4.8)
Net realized capital 
 gains (losses).............      57.3           (9.6)           -        22.4           18.5         21.1
                             _________      _________                _________      _________             
   Total revenue............   3,227.4        3,032.2          6.4     9,595.1        9,085.2          5.6
 
Current and future benefits.   2,421.4        2,110.1         14.8     6,967.2        6,238.6         11.7
Operating expenses..........     622.3          670.8         (7.2)    1,822.7        2,014.1         (9.5)
Amortization of goodwill 
 and other acquired 
 intangible assets..........      90.9           91.3          (.4)      271.8          273.5          (.6)
Amortization of deferred 
 policy acquisition costs...       2.9            3.7        (21.6)       16.0            8.8         81.8
Severance and facilities 
 charges (reserve reductions)        -              -            -       (45.0)          30.0            -
                              ________      _________                _________      _________             
   Total benefits and 
    expenses................   3,137.5        2,875.9          9.1     9,032.7        8,565.0          5.5
                              ________      _________                _________      _________             
 
Income before income taxes..      89.9          156.3        (42.5)      562.4          520.2          8.1
Income taxes................      51.1           70.5        (27.5)      270.2          234.1         15.4
                             _________      _________                _________      _________             

Net income.................. $    38.8      $    85.8        (54.8)  $   292.2      $   286.1          2.1
                             _________      _________                _________      _________             
                             _________      _________                _________      _________             
Net realized capital 
 gains (losses), net of 
 tax (included above)....... $    35.1      $    (6.0)           -   $    (4.1)     $    13.3            -
                             _________      _________                _________      _________             
                             _________      _________                _________      _________             
<FN>

(1)  Represents financial information as though the merger with U.S. Healthcare occurred on 
     January 1, 1996, reflecting adjustments which include:  (a) amortization of goodwill 
     and other acquired intangible assets; (b) interest income foregone related to a $500 
     million dividend paid by U.S. Healthcare to the Company; and (c) adjustments to 
     conform U.S. Healthcare's accounting policies with Aetna Services' and to remove the 
     effect of merger-related costs incurred by U.S. Healthcare prior to the merger.  The 
     1996 pro forma operating summary and information derived from the summary is not 
     necessarily indicative of the results of operations of the Aetna U.S. Healthcare 
     segment had the merger occurred at the beginning of 1996, nor is it necessarily 
     indicative of future results.  The 1996 pro forma operating summary does not give 
     effect to (a) any synergies which may be realized in future periods as a result of 
     the merger or (b) the costs of financing the merger (see "Corporate").
</TABLE>


<PAGE> 33

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Aetna U.S. Healthcare (Continued)
_________________________________

In order to provide a comparison that management believes better 
reflects the underlying performance of Aetna U.S. Healthcare's two 
businesses, Health Risk, and Group Insurance and Other Health, the 
earnings discussion that follows excludes amortization of goodwill 
and other acquired intangible assets, severance and facilities 
actions, and net realized capital gains or losses.  The table 
below sets forth earnings on this basis for the Health Risk, Group 
Insurance and Other Health businesses, and other related 
information.

<TABLE>
<CAPTION>
(Millions, after tax, except                           Pro Forma                             Pro Forma
 ratios)                            Three Months       Three Months        Nine Months       Nine Months
                                        Ended             Ended               Ended             Ended
                                    September 30,      September 30,      September 30,     September 30,
                                                                                                         
                                        1997              1996               1997               1996
                                    _____________      _____________      _____________     _____________
<S>                                 <C>                <C>                <C>               <C>

Health Risk                         $   (9.4)(1)       $  106.3           $  226.6          $  362.2
Group Insurance and Other Health        88.0               60.8              264.3             155.8
                                    ________           ________           ________          ________
   Total Aetna U.S. Healthcare      $   78.6           $  167.1           $  490.9          $  518.0
                                    ________           ________           ________          ________
                                    ________           ________           ________          ________

Health Risk Medical Loss Ratio          90.7%(1)           82.0%              85.6%(1)          80.9%
                                    ________           ________           ________          ________ 
                                    ________           ________           ________          ________ 
Commercial HMO Medical Loss Ratio       90.7%(1)           80.8%              84.9%(1)          78.2%
                                    ________           ________           ________          ________ 
                                    ________           ________           ________          ________ 
Medicare HMO Medical Loss Ratio         99.4%(1)           88.2%              94.1%(1)          88.0%
                                    ________           ________           ________          ________ 
                                    ________           ________           ________          ________ 
Health Risk SG&A Ratio                  12.6%              15.0%              12.1%             14.7%
                                    ________           ________           ________          ________ 
                                    ________           ________           ________          ________ 

<FN>

(1)  Includes the effect of a charge of $161 million (pretax) ($103 million, after tax) 
     related to a reestimation of HMO medical claims reserves associated with prior period 
     claims, a majority of which relate to the first and second quarters of 1997.  This charge
     primarily affects Commercial and Medicare HMO medical claims reserves.  Excluding the 
     effect of this charge, the Health Risk, Commercial and Medicare medical loss ratios for 
     the three months ended September 30, 1997 would have been 83.9%, 82.6% and 91.0%, 
     respectively.

</TABLE>

Aetna U.S. Healthcare's earnings for the three and nine months 
ended September 30, 1997 decreased by $89 million, or 53%, and $27 
million, or 5%, respectively, compared with the pro forma earnings 
for the same periods a year ago.  The segment's results reflect 
decreased Health Risk earnings partially offset by improved Group 
Insurance and Other Health earnings.

For the Health Risk business, reserves reflect estimates of the 
ultimate cost of claims that have been incurred but not yet 
reported or paid.  Claim reserves are based on a number of factors 
including those derived from historical claim experience.  Medical 
claims payable are estimated periodically, and any resulting 
adjustments are reflected in current period results in current and 
future benefits.  In the three months ended September 30, 1997, 
the Company received new information indicating that HMO medical 
costs for prior periods had been higher than estimated.  As a 
result, the Company revised its estimate of its HMO medical claims 
reserves and increased its reserves by recording a $103 million 
after-tax charge.


<PAGE> 34

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Aetna U.S. Healthcare (Continued)
_________________________________

Earnings for the three and nine months ended September 30, 1997 in 
the Health Risk business were affected by several factors.  An 
after-tax charge of $103 million related to a reestimation of HMO 
medical claims reserves associated with prior period claims 
(discussed above) was taken during the three months ended 
September 30, 1997.  Commercial and Medicare HMO medical costs per 
member per month increased by 14% and 18%, respectively, for the 
three months ended September 30, 1997 and 10% and 14%, 
respectively, for the nine months ended September 30, 1997 when 
compared to the same periods a year ago primarily resulting from 
higher inpatient facility and physician costs.  The increases in 
Medicare HMO medical costs per member per month also reflect 
higher pharmacy costs.  Partially offsetting the increase in HMO 
medical costs were benefits resulting from increased HMO 
enrollment and increased Commercial and Medicare HMO premiums per 
member per month of 2% and 5%, respectively, for the three months 
ended September 30, 1997 and 1% and 6%, respectively, for the nine 
months ended September 30, 1997 when compared to the same periods 
a year ago.  The increases in Commercial HMO premiums per member 
per month for the three and nine months ended September 30, 1997 
resulted from premium rate increases instituted in 1997, the 
effect of which were partially offset by customers selecting lower 
premium plans and a shift in geographic mix.  Health Risk results 
also benefited from improvement in operating expenses as a result 
of continuing cost savings initiatives, and lower preferred 
provider organization (PPO) and Indemnity medical costs resulting 
from favorable prior year reserve development.

The increase in earnings for the three and nine months ended 
September 30, 1997 for the Group Insurance and Other Health 
business is primarily attributable to higher earnings related to 
Group Insurance products and higher earnings related to Other 
Health products, respectively.  Results for the three months ended 
September 30, 1997 primarily reflect higher earnings from Group 
Insurance products due to favorable adjustments to claim benefit 
reserve estimates for life and disability products, as well as 
increased product sales.  Favorable results related to Other 
Health products for the nine months ended September 30, 1997 
reflect lower operating expenses due to continuing cost savings 
initiatives and higher administrative service contract fees 
resulting from rate increases and changes in product mix.


<PAGE> 35

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Aetna U.S. Healthcare (Continued)
_________________________________

Aetna U.S. Healthcare's membership was as follows:

<TABLE>
<CAPTION>
 
                                   September 30, 1997 (1)(2)   September 30, 1996 (1)(2)
                                   _________________________   _________________________
(Thousands)                        Risk      Nonrisk   Total   Risk      Nonrisk   Total
____________________________________________________________   _________________________
<S>                                <C>       <C>       <C>     <C>       <C>       <C>   
HMO
  Commercial                       3,588      577      4,165   3,280     527       3,807
  Medicare                           373       19        392     286      19         305
  Medicaid                           101        -        101     134      27         161
                                   _____    _____     ______   _____   _____      ______
    Total HMO                      4,062      596      4,658   3,700     573       4,273
POS                                  309    2,446      2,755     308   2,310       2,618
PPO                                  609    3,046      3,655     765   2,957       3,722
Indemnity                            299    2,338      2,637     483   2,647       3,130
                                   _____    _____     ______   _____   _____      ______
 Total Health Membership           5,279    8,426     13,705   5,256   8,487      13,743
                                   _____    _____     ______   _____   _____      ______
                                   _____    _____     ______   _____   _____      ______

Group Insurance: (3)
  Group Life                                           9,928                       9,544
                                                      ______                      ______
                                                      ______                      ______
  Disability                                           2,638                       2,377
                                                      ______                      ______
                                                      ______                      ______
  Long-Term Care                                          96                          96
                                                      ______                      ______
                                                      ______                      ______
<FN>

(1)  Health membership as of September 30, 1997 reflects system and plan conversions.  The 
     conversions predominately affect Indemnity and PPO membership and have an immaterial 
     impact on all other Health products.  September 30, 1996 reflects adjustments computed 
     for December 31, 1996 membership (a decrease of approximately 472 thousand members), 
     based on known corrected data from these conversions, as applied to September 30, 1996 
     membership previously reported.
(2)  Group Insurance membership as of September 30, 1997 reflects the conversion to a new 
     membership reporting system.  September 30, 1996 reflects adjustments computed for 
     December 31, 1996 membership (an increase of approximately 1 million members), as 
     applied to September 30, 1996 membership previously reported.
(3)  Many Group Insurance members participate in more than one type of Aetna U.S. 
     Healthcare coverage and are counted in each.
</TABLE>

Total Health membership as of September 30, 1997 decreased by 38 
thousand members, or .3%, when compared to September 30, 1996.  
Membership increases in Commercial HMO, Medicare HMO and POS were 
offset by a decline in Indemnity and PPO enrollment.  The decline in 
Indemnity enrollment reflects the continued migration of Indemnity 
members to other managed care products.  Total HMO membership as of 
September 30, 1997 increased by 385 thousand members or 9% when 
compared to September 30, 1996.

Revenue for Aetna U.S. Healthcare increased by $145 million, or 5%, 
and $679 million, or 8%, for the three and nine months ended 
September 30, 1997, respectively, compared to the same periods a year 
ago, excluding revenues of $173 million for the nine months ended 
September 30, 1996 from the Civilian Health and Medical Program of 
the Uniformed Services contract which was not renewed, and net 
realized capital gains or losses.  This growth was primarily due to 
membership growth in Commercial and Medicare HMO products, partially 
offset by lower Indemnity membership, as well as to premium rate 
increases instituted at the beginning of 1997.

Operating expenses for Aetna U.S. Healthcare decreased by $49 
million, or 7%, and $191 million, or 10%, for the three and nine 
months ended September 30, 1997, respectively, compared with the same 
periods a year ago primarily due to the impact of continuing cost 
reduction efforts and operating expenses in 1996, not present in 
1997, associated with investments in primary care physician 
practices.

<PAGE> 36

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Aetna U.S. Healthcare (Continued)
_________________________________

Outlook

Premiums in the Health Risk business are generally fixed for one-year 
periods and, accordingly, cost levels in excess of those reflected in 
pricing, such as those being experienced during 1997, cannot be 
recovered in the year through higher premiums.  Earnings in the 
Health Risk business for the remainder of 1997 will continue to be 
adversely affected by the increased level of medical costs.  In 
addition, a significant portion of the Company's contracts for 1998 
were priced prior to the Company's receipt of information during the 
third quarter of 1997 regarding increased medical cost levels, so 
those contracts cannot be repriced to factor in the higher medical 
cost levels.

For remaining 1998 contracts, the Company has targeted further 
premium increases to improve Health Risk profitability.  The Company 
also attempts to improve profitability by addressing cost increases 
in its contracting with providers and through other cost management 
techniques.  There can be no assurances, however, that premium 
increases and cost savings achieved through recontracting will be 
sufficient to offset the increases in medical costs as well as any 
increases in other operating costs, as governmental action (including 
rate decreases or reduction of rate increases), business conditions 
(including intensification of competition) and other factors may 
adversely affect the Company's ability to realize such premium 
increases and cost savings. 



<PAGE> 37

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Aetna Retirement Services
_________________________

<TABLE>
<CAPTION>
Operating Summary
(Millions)                          Three Months Ended September 30,      Nine Months Ended September 30, 
                                    __________________________________    ________________________________
                                    1997         1996         % Change    1997        1996        % Change
                                    ____         ____         ________    ____        ____        ________
<S>                                 <C>          <C>          <C>         <C>         <C>         <C>
Premiums (1)......................  $    37.1    $    46.6      (20.4)%   $   115.5   $   134.3     (14.0)%
Net investment income.............      278.6        272.5        2.2         830.6       804.4       3.3
Fees and other income (2).........      158.7        122.2       29.9         429.6       336.3      27.7
Net realized capital gains........       10.6           .9          -          19.8        18.2       8.8
                                    _________    _________                _________   _________          
   Total revenue..................      485.0        442.2        9.7       1,395.5     1,293.2       7.9

Current and future benefits.......      256.7        263.7       (2.7)        778.9       769.8       1.2
Operating expenses (2)............       98.4         86.4       13.9         271.5       254.0       6.9
Amortization of deferred policy 
 acquisition costs................       33.6         18.2       84.6          80.9        49.7      62.8
Severance and facilities charge...          -         49.0     (100.0)            -        49.0    (100.0)    
                                    _________    _________                _________   _________               
   Total benefits and expenses....      388.7        417.3       (6.9)      1,131.3     1,122.5        .8
                                    _________    _________                _________   _________          
Income before income taxes........       96.3         24.9          -         264.2       170.7      54.8
Income taxes......................       29.0          6.8          -          81.5        48.3      68.7
                                    _________    _________                _________   _________          

Net income........................  $    67.3    $    18.1          -     $   182.7   $   122.4      49.3
                                    _________    _________                _________   _________          
                                    _________    _________                _________   _________          
Net realized capital gains, net
 of tax (included above)..........  $     6.8    $      .6          -     $    12.8   $    11.9       7.6
                                    _________    _________                _________   _________          
                                    _________    _________                _________   _________          

Deposits not included in premiums 
 above:
  Annuities - fixed options.......  $   322.7    $   323.1        (.1)    $   901.8   $ 1,046.7     (13.8)
  Annuities - variable options....      806.0        655.9       22.9       2,420.0     1,996.2      21.2
  Individual Life Insurance.......      113.3        119.3       (5.0)        351.2       328.0       7.1
                                    _________    _________                _________   _________          
    Total.........................  $ 1,242.0    $ 1,098.3       13.1     $ 3,673.0   $ 3,370.9       9.0
                                    _________    _________                _________   _________          
                                    _________    _________                _________   _________          

Assets under management: (3)(4)
  Annuities - fixed options.......                                        $11,997.4   $11,589.1       3.5
  Annuities - variable options....                                         19,895.5    13,240.6      50.3
                                                                          _________   _________          
    Subtotal Annuities............                                         31,892.9    24,829.7      28.4
  Investment advisory (2).........                                          6,666.9     2,341.0     184.8
                                                                          _________   _________          
    Financial services............                                         38,559.8    27,170.7      41.9
  Individual Life Insurance.......                                          3,056.6     2,765.0      10.5
                                                                          _________   _________          
    Total.........................                                        $41,616.4   $29,935.7      39.0
                                                                          _________   _________          
                                                                          _________   _________          

Individual life insurance 
 coverage issued..................                                        $ 3,805.4   $ 4,080.7      (6.7)
                                                                          _________   _________           
                                                                          _________   _________           
Individual life insurance 
 coverage in force................                                        $49,641.7   $48,334.0       2.7
                                                                          _________   _________          
                                                                          _________   _________          

<FN>
(1)  Includes $17.1 million and $47.2 million for the three and nine months ended 
     September 30, 1997, respectively, and $21.3 million and $53.5 million, respectively, 
     for the same periods a year ago, for annuity premiums on contracts converting
     from the accumulation phase to payout options with life contingencies.
(2)  The nine months ended September 30, 1997 include $17.8 million of fees and other 
     income and $13.1 million of operating expenses and, at September 30, 1997 and 1996, 
     $2,907.6 million and $1,062.1 million, respectively, of assets under management that 
     were previously reported in the Large Case Pensions segment, reflecting the consolidation 
     of the Company's investment advisory services and certain other pension products which 
     complement Aetna Retirement Services' business strategy.
(3)  Excludes net unrealized capital gains of $520.7 million and $205.6 million at 
     September 30, 1997 and 1996, respectively.
(4)  Includes $7,134.1 million and $4,286.5 million at September 30, 1997 and 1996, 
     respectively, of assets invested through ARS' products in unaffiliated mutual funds.
</TABLE>


<PAGE> 38

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Aetna Retirement Services (Continued)
____________________________________ 

ARS' net income for the three and nine months ended September 30, 
1997 increased $49 million and $60 million, respectively, when 
compared with the same periods a year ago.  Net income for the three 
and nine months ended September 30, 1996 reflects an after-tax 
severance and facilities charge of $32 million primarily related to 
actions taken or to be taken to improve ARS' cost structure relative 
to its competitors.  (See "Severance and Facilities Charges.")  
Excluding net realized capital gains and the third quarter 1996 
severance and facilities charge, results for the three and nine 
months ended September 30, 1997 increased $11 million, or 23%, and 
$28 million, or 19%, respectively, from the prior year periods, 
reflecting improved earnings from financial services products and, 
for the three months ended September 30, 1997, improved earnings 
related to individual life insurance products.  For the nine months 
ended September 30, 1997, the favorable financial services results 
were partially offset by lower individual life insurance earnings.

The table below sets forth earnings by product type, excluding net 
realized capital gains and the third quarter 1996 severance and 
facilities charge (in millions):

<TABLE>
<CAPTION>
                            Three Months Ended         Nine Months Ended 
(Millions)                    September 30,             September 30,   
                            ___________________       __________________
                            1997        1996          1997       1996   
                            ____        _______       ____       _______
<S>                         <C>         <C>           <C>        <C>
Financial services          $  38.7     $  29.8       $ 115.2    $  82.4
Individual life insurance      21.8        19.5          54.7       59.9
                            _______     _______       _______    _______
  Total                     $  60.5     $  49.3       $ 169.9    $ 142.3
                            _______     _______       _______    _______
                            _______     _______       _______    _______

</TABLE>

The $9 million and $33 million increases in earnings for the three 
and nine months ended September 30, 1997, respectively, for financial 
services products reflects increased fee income primarily from 
increased assets under management.  Assets under management 
(excluding assets under management that were previously reported in 
the Large Case Pensions segment) increased by 33% when compared to 
the same period a year ago primarily due to appreciation in the stock 
market, additional net deposits (i.e., deposits less surrenders) and 
the inclusion of assets from the acquisition of Financial Network 
Investment Corporation ("FNIC") (discussed below).

Earnings for the three and nine months ended September 30, 1997 from 
individual life insurance products increased $2 million and decreased 
$5 million, respectively, when compared to the same periods a year 
ago primarily reflecting improved mortality experience during the 
three months ended September 30, 1997.

Earnings for financial services products reflect lower operating 
expenses relative to assets under management primarily resulting from 
increased assets under management, and for the nine months ended 
September 30, 1997, individual life insurance earnings reflect lower 
operating expenses.  In both cases, these lower operating expenses 
result from cost savings associated with previous restructurings.


<PAGE> 39

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Aetna Retirement Services (Continued)
____________________________________ 

Of the $12.0 billion and $11.6 billion of fixed annuity assets 
under management at September 30, 1997 and 1996, respectively, 25% 
were fully guaranteed and 75% were experience rated.  The average 
annualized earned rate on investments supporting fully guaranteed 
investment contracts was 7.8% and 7.9% and the average annualized 
earned rate on investments supporting experience rated investment 
contracts was 8.0% and 8.0% for the nine months ended September 
30, 1997 and 1996, respectively.  The average annualized credited 
rate on fully guaranteed investment contracts was 6.6% and 6.7% 
and the average annualized credited rate on experience rated 
investment contracts was 5.9% and 6.0% for the nine months ended 
September 30, 1997 and 1996, respectively.  The resulting 
annualized interest margins on fully guaranteed investment 
contracts were 1.2% and 1.2% and on experience rated investment 
contracts were 2.1% and 2.0% for the nine months ended September 
30, 1997 and 1996, respectively.

The duration of the investment portfolios supporting ARS' 
liabilities is regularly monitored and adjusted in order to 
maintain an aggregate duration that is within 0.5 years of the 
estimated duration of the underlying liabilities.  For a fuller 
discussion of the Company's asset/liability management practices, 
see the Company's 1996 Annual Report.

In July 1997, in connection with the Company's efforts to expand 
its financial planning business, the Company acquired FNIC.  FNIC 
is a broker/dealer licensed in all 50 states and includes more 
than 2,400 registered representatives and 177 branch offices in 35 
states.  The purchase price was not material to the Company.

<PAGE> 40

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

International
_____________

<TABLE>
<CAPTION>
Operating Summary
(Millions)                              Three Months Ended September 30,     Nine Months Ended September 30, 
                                        _________________________________    ________________________________
                                        1997         1996        % Change    1997         1996      % Change
                                        ____         ____        ________    ____         ____      ________
<S>                                     <C>          <C>         <C>         <C>          <C>       <C>

Premiums.............................   $  380.1     $  316.9      19.9%     $1,056.5     $  834.5     26.6%
Net investment income................       90.3         81.7      10.5         276.4        247.5     11.7
Fees and other income................       41.6         30.1      38.2         108.3         92.0     17.7
Net realized capital gains...........        6.0          1.7         -          16.8          3.0        -
                                        ________     ________                ________     ________         
   Total revenue.....................      518.0        430.4      20.4       1,458.0      1,177.0     23.9

Current and future benefits..........      316.1        265.7      19.0         892.6        715.9     24.7
Operating expenses...................      113.5         91.9      23.5         328.5        263.8     24.5
Interest expense.....................        2.3          2.5      (8.0)          5.5          6.0     (8.3)
Amortization of goodwill and 
 other acquired intangible assets....        4.7          1.0         -          11.8          2.4        -
Amortization of deferred policy 
 acquisition costs...................       22.1         26.5     (16.6)         62.5         65.0     (3.8)
                                        ________     ________                ________     ________          
   Total benefits and expenses.......      458.7        387.6      18.3       1,300.9      1,053.1     23.5
                                        ________     ________                ________     ________         

Income before income taxes...........       59.3         42.8      38.6         157.1        123.9     26.8
Income taxes ........................       21.5         14.2      51.4          51.9         43.3     19.9
                                        ________     ________                ________     ________         

Net income...........................   $   37.8     $   28.6      32.2      $  105.2     $   80.6     30.5
                                        ________     ________                ________     ________         
                                        ________     ________                ________     ________         
Net realized capital gains,
 net of tax (included above).........   $    3.8     $    1.4     171.4      $   11.5     $    2.2        -
                                        ________     ________                ________     ________         
                                        ________     ________                ________     ________         

</TABLE>

International's net income for the three and nine months ended 
September 30, 1997 increased by $9 million and $25 million, 
respectively, compared with the same periods a year ago.  
Excluding net realized capital gains, results for the three and 
nine months ended September 30, 1997 increased $7 million, or 25%, 
and $15 million, or 20%, respectively, from the prior year, 
primarily reflecting earnings growth in Taiwan and favorable 
investment performance in certain Asia Pacific and Latin American 
operations, partially offset by increased losses related to start-
up operations, primarily those in the Philippines and Argentina.  
The Company's operations in Brazil, which were acquired in April 
1997, also contributed to International's improved results for the 
nine months ended September 30, 1997.


<PAGE> 41

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Large Case Pensions
___________________

<TABLE>
<CAPTION>
Operating Summary
(Millions)                              Three Months Ended September 30,      Nine Months Ended September 30, 
                                        _________________________________     ________________________________
                                        1997         1996        % Change     1997        1996       % Change
                                        ____         ____        ________     ____        ____       ________
<S>                                     <C>          <C>         <C>          <C>         <C>        <C>

Premiums.............................   $     36.1   $     43.1     (16.2)%   $   123.4   $   136.0     (9.3)%
Net investment income................        328.7        411.0     (20.0)      1,055.5     1,249.4    (15.5)
Fees and other income (1)............          8.4         15.5     (45.8)         25.7        68.0    (62.2)
Net realized capital gains (losses)..         19.7          (.2)        -          18.5        12.5     48.0
                                        __________   __________               _________   _________         
   Total revenue.....................        392.9        469.4     (16.3)      1,223.1     1,465.9    (16.6)

Current and future benefits..........        324.1        413.7     (21.7)      1,045.3     1,282.2    (18.5)
Operating expenses (1)...............          6.6          8.7     (24.1)         22.4        51.9    (56.8)
Reductions of loss on discontinued 
 products............................            -            -         -        (172.5)     (170.0)     1.5
                                        __________   __________               _________   _________         
   Total benefits and expenses.......        330.7        422.4     (21.7)        895.2     1,164.1    (23.1)
                                        __________   __________               _________   _________          

Income before income taxes...........         62.2         47.0      32.3         327.9       301.8      8.6
Income taxes.........................         24.9         17.3      43.9         124.2       107.4     15.6
                                        __________   __________               _________   _________         

Net income...........................   $     37.3   $     29.7      25.6     $   203.7   $   194.4      4.8
                                        __________   __________               _________   _________         
                                        __________   __________               _________   _________         

Net realized capital gains (losses),.
 net of tax (included above).........   $     12.8   $      (.2)        -     $    12.9   $     8.1     59.3
                                        __________   __________               _________   _________         
                                        __________   __________               _________   _________         

Deposits not included in premiums 
 above...............................   $    411.6   $    418.5      (1.6)    $ 1,333.8   $ 1,340.9      (.5)
                                        __________   __________               _________   _________          
                                        __________   __________               _________   _________          

Assets under management (1)(2)(3)....                                         $33,889.9   $35,797.1     (5.3)
                                                                              _________   _________          
                                                                              _________   _________          

<FN>
(1)  The nine months ended September 30, 1996 include $15.7 million of fees and other income 
     and $12.7 million of operating expenses and, at September 30, 1996, assets under management
     valued at $1,620.4 million which are currently reported in the ARS segment, reflecting the 
     consolidation of the Company's investment advisory services and certain other pension products 
     which complement ARS' business strategy.
(2)  Excludes net unrealized capital gains of $494.6 million and $166.2 million at September 30, 1997 
     and 1996, respectively.
(3)  Includes assets under management of $7,751.0 million and $8,781.9 million at September 30, 1997
     and 1996, respectively, related to discontinued products.
</TABLE>

Large Case Pensions' net income for the three and nine months 
ended September 30, 1997 increased by $8 million and $9 million, 
respectively, compared with the same periods a year ago.  
Excluding the reductions of the loss on discontinued products for 
the nine months ended September 30, 1997 and 1996 (discussed 
below) and net realized capital gains or losses, results for the 
three and nine months ended September 30, 1997 decreased 
$5 million, or 18%, and increased $7 million, or 9%, respectively, 
from the prior year, reflecting decreased investment income 
partially offset by lower expenses.  Earnings increased during the 
nine months ended September 30, 1997, reflecting lower expenses 
partially offset by decreased income on the declining capital in 
the business.

Assets under management at September 30, 1997 were 5% lower than a 
year earlier, primarily as a result of the continuing runoff of 
the underlying liabilities and the consolidation into the ARS 
segment of the Company's investment advisory services and certain 
other pension products which complement ARS' business strategy.


<PAGE> 42

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Large Case Pensions (Continued)
_______________________________

Net realized capital gains for the nine months ended September 30, 
1996 include a gain of $25 million related to the sale of ARI 
which was partially offset by net realized capital losses related 
to bond sales.  The earnings of ARI for the nine months ended 
September 30, 1996 were not material to Large Case Pensions' 
earnings.

General account assets supporting experience rated products may be 
subject to participant or contractholder withdrawal.  Participant 
withdrawals are generally subject to significant tax and plan 
constraints.  Experience rated contractholder and participant 
withdrawals and transfers were as follows (excluding 
contractholder transfers to other Company products) (in millions):

<TABLE>
<CAPTION>
                                       Three Months Ended September 30,   Nine Months Ended September 30,
                                       ________________________________   _______________________________
                                         1997             1996              1997           1996
                                         _____            ____              ____           ____
<S>                                      <C>              <C>               <C>            <C>
Scheduled contract maturities
 and benefit payments (1)                $  224.6         $  259.8          $  682.0       $  867.7
                                         ________         ________          ________       ________
                                         ________         ________          ________       ________

Contractholder withdrawals other
 than scheduled contract maturities
 and benefit payments                    $  122.0         $   67.3          $  258.1       $  429.6 (2)
                                         ________         ________          ________       ________    
                                         ________         ________          ________       ________    

Participant withdrawals                  $   31.5         $   34.6          $   96.3       $  135.7
                                         ________         ________          ________       ________
                                         ________         ________          ________       ________
<FN>

(1) Includes payments made upon contract maturity and other amounts distributed 
    in accordance with contract schedules.
(2) Primarily relates to an unscheduled withdrawal by one contractholder.
</TABLE>

Discontinued Products

The Company discontinued the sale of its fully guaranteed large case 
pension products (single-premium annuities ("SPAs") and guaranteed 
investment contracts ("GICs")) in 1993.  Under the Company's 
accounting for these discontinued products, a reserve for anticipated 
future losses from these products was established, and the reserve is 
reviewed by management quarterly. As long as the reserve continues to 
represent management's then best estimate of expected future losses, 
results of operations of the discontinued products, including net 
realized capital gains and losses, are credited/charged to the 
reserve and do not affect the Company's results of operations.  As a 
result of management's detailed review in the first quarter of 1997, 
the Company released $173 million (pretax), constituting the 
remaining portion of the reserve related to GICs, primarily as a 
result of continued favorable developments in real estate markets.  
The current reserve reflects management's best estimate of 
anticipated future net losses.  To the extent that aggregate future 
losses on GICs and SPAs are greater or less than anticipated, the 
Company's results of operations would be adversely or positively 
affected, respectively.  The discussion below presents information 
for the discontinued SPA and GIC products on a combined basis.  
(Refer to the Company's 1996 Annual Report.)


<PAGE> 43

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Large Case Pensions (Continued)
_______________________________

At the time of discontinuance, a receivable from Large Case 
Pensions' continuing products equivalent to the net present value 
of the anticipated cash flow shortfalls was established for the 
discontinued products.  Interest on the receivable is accrued at 
the discount rate which was used to calculate the loss on 
discontinuance.  The offsetting payable, on which interest is 
similarly accrued, is reflected in continuing products.  Interest 
on the payable generally offsets the investment income on the 
assets available to fund the shortfall.  At September 30, 1997, 
the receivable from continuing products, net of related deferred 
taxes payable of $40 million on the accrued interest income, was 
$510 million.  During 1996, $315 million of the receivable, net of 
the related deferred taxes payable on the accrued interest income 
of $19 million, was funded from continuing products to meet 
liquidity needs from maturing GICs.  As of September 30, 1997, no 
additional funding of the receivable had taken place.

Results of discontinued products were as follows (in millions):

<TABLE>
<CAPTION>
                                      Three Months Ended September 30,    Nine Months Ended September 30,
                                      ________________________________    _______________________________
                                          1997           1996                 1997          1996
                                          ____           ____                 ____          ____
<S>                                       <C>            <C>                  <C>           <C>

Interest margin (a)                       $  (6.1)       $   (.5)             $   5.7       $   9.3
Net realized capital gains                   31.5*           7.8                 92.8*         23.4
Interest earned on receivable from 
 continuing products                          5.4            7.7                 16.2          24.7
Other, net                                    1.1            8.3                  1.4          13.4
                                          _______        _______              _______       _______
 Results of discontinued products, 
 after tax                                $  31.9        $  23.3              $ 116.1       $  70.8
                                          _______        _______              _______       _______
                                          _______        _______              _______       _______

Results of discontinued products, 
 pretax                                   $  51.8        $  36.8              $ 185.0       $ 110.9
                                          _______        _______              _______       _______
                                          _______        _______              _______       _______

<FN>

(a)  Represents the difference between interest credited to holders of fully guaranteed 
     large case pension contracts and interest earned on invested assets supporting 
     such contracts.  
*    Includes net realized capital gains of $21.3 million and $41.4 million for the three 
     and nine months ended September 30, 1997, respectively, related to continued favorable 
     developments in real estate markets, and also $37.3 million for the nine months ended 
     September 30, 1997 resulting from the sale of investments in order to meet liquidity 
     needs.
</TABLE>

The activity in the reserve for anticipated future losses on 
discontinued products during the first nine months of 1997 was as 
follows (pretax, in millions):

<TABLE>
<CAPTION>
<S>                                        <C>
Reserve at December 31, 1996               $  986.8
Results of discontinued products              185.0
Reserve reduction                            (172.5)
                                           ________ 
Reserve at September 30, 1997              $  999.3
                                           ________
                                           ________
</TABLE>

<PAGE> 44

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Large Case Pensions (Continued)
_______________________________

Distributions on discontinued products were as follows 
(in millions):

<TABLE>
<CAPTION>
                                   Three Months Ended September 30,    Nine Months Ended September 30, 
                                   ________________________________    ________________________________
                                       1997        1996                    1997        1996
                                       ____        ____                    ____        ____
<S>                                    <C>         <C>                     <C>         <C>

Scheduled contract maturities, 
 settlements and benefit 
 payments (1)                          $  392.1    $  652.7               $1,259.0    $2,019.6
                                       ________    ________               ________    ________
                                       ________    ________               ________    ________

Participant directed withdrawals       $    9.6    $   12.8               $   29.3    $   43.3
                                       ________    ________               ________    ________
                                       ________    ________               ________    ________

<FN>

(1) Includes early retirement of guaranteed investment contracts liabilities of $1.5 
    million and $183.3 million for the three and nine months ended September 30, 1996, 
    respectively.  There were no such retirements for the three and nine months ended 
    September 30, 1997.

</TABLE>

Cash required to fund these distributions was provided by earnings 
and scheduled payments on and sales of invested assets and, for 
the three and nine months ended September 30, 1996, the funding of 
a portion of the receivable from continuing products.

See "General Account Investments" on page 47.


<PAGE> 45

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Corporate
_________

<TABLE>
<CAPTION>
Operating Summary
(Millions, after tax)                  Three Months Ended September 30,      Nine Months Ended September 30,
                                       ________________________________      _______________________________
                                       1997      1996     % Change           1997      1996    % Change
                                       ____      ____     ________           ____      ____    ________
<S>                                    <C>       <C>         <C>             <C>       <C>       <C>

Interest expense....................   $  37.7   $  31.4      20.1%          $ 111.4   $  68.3    63.1%
Other expense, net (1)..............      25.7      15.3      68.0              45.2     268.6   (83.2)
<FN>

(1) Includes after-tax net realized capital gains of $.2 million and $34.0 million for 
    the three and nine months ended September 30, 1997, respectively, and $4.2 million and 
    $10.2 million for the same periods a year ago.  After-tax net realized capital gains for 
    the nine months ended September 30, 1997, include gains of $33.6 million related to the 
    sale of a portion of the Company's investment in Travelers Property Casualty Corp.

</TABLE>

The increase in interest expense of $6 million and $43 million for 
the three and nine months ended September 30, 1997, respectively, 
compared to the same periods a year ago primarily results from 
additional debt incurred in connection with the financing of the 
U.S. Healthcare merger.  

Excluding net realized capital gains, other expense increased $6 
million and decreased $200 million for the three and nine months 
ended September 30, 1997, respectively, compared with the same 
periods a year ago.  Other expense for the nine months ended 
September 30, 1996 includes a $235 million (after tax) severance 
and facilities charge related to actions associated with the sale 
of the Company's property-casualty operations in the second 
quarter of 1996 (see "Severance and Facilities Charges") and 
interest income of $7 million and $37 million (after tax) for the 
three and nine months ended September 30, 1996, respectively, 
earned from the investment of the net proceeds received from the 
sale of the Company's property-casualty operations.  Excluding 
these items, other expense for the three and nine months ended 
September 30, 1997 was approximately level compared with the same 
periods a year ago.

<PAGE> 46

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Severance and Facilities Charges
________________________________

During 1996, the Company established severance and facilities 
reserves in the Aetna U.S. Healthcare, ARS and Corporate segments 
to reflect the integration of the health businesses and certain 
other actions taken or to be taken in order to make its businesses 
more competitive.  During the nine months ended September 30, 
1997, the Company charged costs of $197 million to such reserves.  
In addition, the Company also reduced the Aetna U.S. Healthcare 
severance and facilities reserve by $45 million (pretax) during 
the nine months ended September 30, 1997 due to higher attrition 
than was contemplated in the establishment of the reserve.  Of the 
approximately 9,400 positions expected to be eliminated by the 
Company in the aggregate, 5,896 had been eliminated through 
severance actions and the effects of higher attrition by September 
30, 1997 and the related severance benefits charged against the 
reserve.

The Aetna U.S. Healthcare severance actions are expected to be 
substantially completed by the end of 1998.  The ARS severance 
actions are expected to be substantially completed by March 31, 
1998.  The Corporate severance actions and the vacating of certain 
leased office space are expected to be substantially completed by 
the end of 1997.  In connection with the sale of the Company's 
property-casualty operations, the Company vacated, and the 
purchaser subleased, at market rates for a period of eight years, 
the space that the Company occupied in the CityPlace office 
facility in Hartford.  The remaining lease payments (net of 
expected subrentals) on the facilities (other than the CityPlace 
office facility) are payable over approximately the next three 
years.

See Note 9 of Condensed Notes to Financial Statements for 
additional information.


<PAGE> 47

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

General Account Investments
___________________________

Debt Securities

As of September 30, 1997 and December 31, 1996, debt securities 
represented 75% and 74%, respectively, of the Company's total 
general account invested assets as follows:

<TABLE>
<CAPTION>
                                              September 30,       December 31,
(Millions)                                        1997               1996      
______________________________________________________________________________ 
<S>                                           <C>                 <C>

Supporting discontinued products              $   5,145.5         $    5,189.3
Supporting experience rated products             15,009.2             14,888.9
Supporting remaining products                    12,457.0             12,258.1
                                              ________________________________
   Total debt securities (1)                  $  32,611.7         $   32,336.3
                                              ________________________________
                                              ________________________________
<FN>

(1)  Total debt securities at September 30, 1997 and December 31, 1996 include "Below
     Investment Grade" securities of $1.7 billion of which 63% and 73%, respectively, 
     support discontinued and experience rated products.  See the Company's 1996 Annual 
     Report for a discussion of "Below Investment Grade" securities.
</TABLE>

Debt securities reflect net unrealized capital gains of 
$1.4 billion at September 30, 1997, compared with $895 million at 
December 31, 1996.  Of the net unrealized capital gains at 
September 30, 1997, $281 million and $593 million relate to assets 
supporting discontinued products and experience rated pension 
contractholders, respectively.

Mortgage Loans

At September 30, 1997 and December 31, 1996, the Company's 
mortgage loan investments, net of impairment reserves, supported 
the following types of business:

<TABLE>
<CAPTION>
                                          September 30,    December 31,
(Millions)                                    1997            1996    
______________________________________________________________________
<S>                                       <C>              <C>

Supporting discontinued products          $ 2,458.8        $ 2,730.7
Supporting experience rated products        1,991.1          2,370.5
Supporting remaining products               1,563.8          1,599.7
                                          __________________________
   Total mortgage loan investments (1)    $ 6,013.7        $ 6,700.9
                                          __________________________
                                          __________________________
<FN>

(1) Mortgage loans at September 30, 1997 and December 31, 1996 include $576.3 million and 
    $801.1 million of restructured, potential problem and problem loans, respectively, 
    of which 84% and 80% support discontinued and experience rated products, respectively.  
    (See the Company's 1996 Annual Report for a discussion of problem, restructured and 
    potential problem loans).  Specific impairment reserves on these loans were $100.5 
    million and $144.1 million at September 30, 1997 and December 31, 1996, respectively.  
    (See Note 6 of Condensed Notes to Financial Statements).
</TABLE>


<PAGE> 48

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

General Account Investments (Continued)
_______________________________________

During the first nine months of 1997, the Company continued to 
manage its mortgage loan portfolio to reduce the balance in 
absolute terms and relative to invested assets, and to reduce its 
overall risk.  The $687 million decrease in the mortgage loan 
portfolio primarily reflects the effect of loan prepayments and 
repayments of maturing loans.

The Company foreclosed on loans with a principal balance of 
$27 million and collateral with a fair market value of $25 million 
in the first nine months of 1997.  Additional loans with a 
principal balance of $53 million were in the process of 
foreclosure at September 30, 1997.

The Company does not accrue interest on problem loans or 
restructured loans when management believes the collection of 
interest is unlikely.  The amount of pretax investment income 
required by the original terms of problem and restructured loans 
outstanding at September 30 and the portion actually recorded as 
income were as follows:
<TABLE>
<CAPTION>
                                              Three Months Ended       Nine Months Ended 
                                                 September 30,            September 30,
                                              __________________       __________________
(Millions)                                    1997       1996          1997       1996
________________________________________________________________       __________________
<S>                                           <C>        <C>           <C>        <C>
Income which would have been recorded under 
 original terms of loans                      $   8.1    $  23.4       $  29.8    $  70.4
Income recorded                                   4.9       15.0          21.1       49.8
                                              _______    _______       _______    _______
Lost investment income (1)                    $   3.2    $   8.4       $   8.7    $  20.6
                                              _______    _______       _______    _______
                                              _______    _______       _______    _______
<FN>
(1) Lost investment income included 80% and 79% related to income allocated to investments 
    supporting discontinued and experience rated products, respectively, for the three and 
    nine months ended September 30, 1997, and 82% and 85%, respectively, for the same periods 
    a year ago.
</TABLE>

Real Estate 

The Company's equity real estate balances, net of write-downs and 
reserves, were as follows:

<TABLE>
<CAPTION>
                                          September 30,       December 31,
(Millions)                                    1997               1996     
_________________________________________________________________________ 
<S>                                       <C>                 <C>

Investment real estate                    $   147.9           $   192.0
Properties held for sale (1)(2)(3)            384.7               658.2
                                          _____________________________
   Total                                  $   532.6           $   850.2
                                          _____________________________
                                          _____________________________
<FN>

(1) Includes $133.2 million of in-substance foreclosures at December 31, 1996.
    There were no in-substance foreclosures at September 30, 1997.

(2) Properties held for sale at September 30, 1997 and December 31, 1996 include 86% 
    and 84%, respectively, supporting discontinued and experience rated products.

(3) Foreclosed real estate classified as properties held for sale was carried at 55%
    and 57% of the Company's cash investment (unpaid mortgage balance plus capital 
    additions) at September 30, 1997 and December 31, 1996, respectively.
</TABLE>


<PAGE> 49

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

General Account Investments (Continued)
_______________________________________

Total after-tax net realized capital losses (gains) from real 
estate write-downs and changes in the valuation reserves were as 
follows:

<TABLE>
<CAPTION>
                                                    Three Months Ended      Nine Months Ended  
                                                        September 30,          September 30,  
                                                    __________________      _________________ 
(Millions)                                          1997       1996         1997       1996 
______________________________________________________________________      _________________ 
<S>                                                 <C>        <C>          <C>        <C>

Allocable to discontinued products                  $    -     $    -       $   5.7    $ (3.0)
Allocable to experience rated products                   -          -           3.1        .1
                                                                                             
Allocable to remaining products                        2.1          -           3.6      16.2

</TABLE>

Use of Derivatives and Other Investments

The Company's use of derivatives is generally limited to hedging 
activity and principally consists of using foreign exchange forward 
contracts, futures contracts, interest rate swap agreements and 
warrants to hedge interest rate, price and currency risks.  These 
instruments, viewed separately, subject the Company to varying 
degrees of market and credit risk.  However, when used for hedging, 
the expectation is that these instruments would reduce overall market 
risk.  Market risk is the possibility that future changes in market 
prices may decrease the market value of one or all of these financial 
instruments.  Credit risk arises from the possibility that 
counterparties may fail to perform under the terms of the contracts.  
Management does not believe that its current hedging activity will 
have a material effect on the Company's liquidity or results of 
operations.  (See Note 8 of Condensed Notes to Financial Statements.)

The Company also has investments in certain debt instruments with 
derivative characteristics, including those where market value is 
at least partially determined by, among other things, levels of or 
changes in domestic and/or foreign interest rates (short-term or 
long-term), exchange rates, prepayment rates, equity markets or 
credit ratings/spreads.  The amortized cost and fair value of 
these securities included in the debt securities portfolio as of 
September 30, 1997 was as follows:

<TABLE>
<CAPTION>
                                                     Amortized      Fair      
(Millions)                                           Cost           Value     
_____________________________________________________________________________ 
<S>                                                  <C>            <C>       

Residential collateralized mortgage obligations:     $ 2,564.8      $ 2,697.8 
  Principal-only strips (included above)                  66.6           76.7 
  Interest-only strips (included above)                    8.3           21.2 
Other structured securities with derivative
   characteristics (1)                                   108.1          110.4 
<FN>

(1) Represents nonleveraged instruments whose fair values and credit risk are
    based on underlying securities, including fixed-income securities and
    interest rate swap agreements.
</TABLE>


<PAGE> 50

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

Liquidity and Capital Resources
_______________________________

Financings and Financing Capacity

Cash and cash equivalents at September 30, 1997 and December 31, 
1996 were $1.3 billion and $1.5 billion, respectively.

Substantially all of the Company's short-term and long-term 
borrowings and financings are conducted through Aetna Services and 
are fully and unconditionally guaranteed by Aetna Inc.  (See Note 
11 of Condensed Notes to Financial Statements).

The Company uses short-term borrowings from time to time to 
address timing differences between receipts and disbursements.  
The maximum amount of domestic short-term borrowings outstanding 
during the first nine months of 1997 was $858 million.

In the second quarter of 1997, the Company issued an additional 
$314 million of commercial paper in connection with the Company's 
investment in a joint venture in Brazil.  The commercial paper was 
repaid prior to June 30, 1997.
 
Common Stock Transactions

In October 1996, the Board of Directors of the Company (the 
"Board") authorized the repurchase of up to 5 million shares of 
its common stock from time to time.  On September 26, 1997, the 
Board authorized the repurchase of up to an additional 7.5 million 
of its common stock from time to time.  As of September 30, 1997, 
4,500,000 shares of common stock had been repurchased pursuant to 
this authority at a cost of $385 million, of which 3,305,600 
shares at a cost of $302 million were repurchased during the nine 
months ended September 30, 1997.

Dividends

On September 26, 1997, the Board declared a quarterly dividend of 
$.20 per share of common stock and $1.18945 per share of 6.25% 
Class C Voting Mandatorily Convertible Preferred Stock to 
shareholders of record at the close of business on October 31, 
1997, payable November 15, 1997.

New Accounting Pronouncements
_____________________________

See Note 2 of Condensed Notes to Financial Statements for a 
discussion of recently issued accounting pronouncements.


<PAGE> 51

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)


Regulatory Environment
______________________

Legislation to reform the federal Medicare program was passed by 
Congress on July 31, 1997 and was signed into law.  Certain 
provisions of this legislation will phase-in, beginning in 1998, 
changes to the Medicare risk HMO premium determination methodology 
that will reduce increases in the premiums payable to the Company 
as compared with the methodology previously used.  The level and 
extent of such reductions will vary by geographic market and other 
factors, including the amount payable as a "user fee" under the 
legislation.  While the phase-in provisions will provide the 
Company with an opportunity to offset such reductions in premium 
increases by increasing the premiums payable by members, reducing 
the benefits included in the Company's products, and reducing 
payment rates to hospitals, competition and other factors may 
result in such actions not fully offsetting such reductions in 
premium increases.  See "Regulatory Environment" in the Company's 
1996 Annual Report for further discussion of certain legislation 
and regulation relating to the Company.
Year 2000
_________

The Company is preparing its computer systems, applications and 
facilities to accommodate date-sensitive information relating to 
the Year 2000.  The Company expects to incur internal staff costs, 
as well as consulting and other expenses related to infrastructure 
and facilities enhancements necessary to prepare its systems for 
the Year 2000.  While the Company has not determined at this time 
total costs associated with the Year 2000 preparation, these costs 
are not expected to result in amounts material to the financial 
condition of the Company, although they may adversely affect 
results of operations in future periods materially.

Forward-Looking Information
___________________________

See "Forward Looking Information", "Regulatory Environment" and 
the "Outlook" section of each business segment in the Company's 
1996 Annual Report for information regarding important factors 
that may materially affect the Company.
                                       

<PAGE> 52

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

The Company is involved in numerous lawsuits arising, for the most 
part, in the ordinary course of its business operations, including 
litigation in its health business concerning benefit plan coverage 
and other decisions made by the Company, and alleged medical 
malpractice by participating providers.  While the ultimate 
outcome of litigation against the Company cannot be determined at 
this time, after consideration of the defenses available to the 
Company and any related reserves established, it is not expected 
to result in liability for amounts material to the financial 
condition of the Company, although it may adversely affect results 
of operations in future periods.

Item 5.  Other Information.

(a)  Ratios of Earnings to Fixed Charges and Earnings to 
     Combined Fixed Charges and Preferred Stock Dividends

The following tables set forth the Company's and Aetna Services, 
Inc.'s ratios of earnings to fixed charges and ratios of earnings 
to combined fixed charges and preferred stock dividends for the 
periods indicated.

<TABLE>
<CAPTION>
                                          Nine Months Ended                Years ended December 31,      
                                                                     ____________________________________
Aetna Inc.                                September 30, 1997         1996    1995    1994    1993    1992
__________                                __________________         ____    ____    ____    ____    ____
<S>                                       <C>                        <C>     <C>     <C>     <C>     <C>

Ratio of Earnings to Fixed Charges         5.55                      2.45    4.97    4.74    (a)     1.90
Ratio of Earnings to Combined Fixed
 Charges and Preferred Stock Dividends     4.28                      2.10    4.97    4.74    (a)     1.90

<FN>
(a) The Company reported a pretax loss from continuing operations in 1993 which
    was inadequate to cover fixed charges by $1.0 billion.
</TABLE>

<TABLE>
<CAPTION>
                                          Nine Months Ended             Year Ended 
                                                                                   
Aetna Services, Inc.                      September 30, 1997         December 31, 1996
____________________                      __________________         _________________
<S>                                       <C>                        <C>

Ratio of Earnings to Fixed Charges         5.75                       2.44
Ratio of Earnings to Combined Fixed
 Charges and Preferred Stock Dividends     5.75                       2.44
</TABLE>

For purposes of computing both the ratio of earnings to fixed 
charges and the ratio of earnings to combined fixed charges and 
preferred stock dividends, "earnings" represent consolidated 
earnings from continuing operations before income taxes, 
cumulative effect adjustments and extraordinary items plus fixed 
charges and minority interest.  "Fixed charges" consist of 
interest (and the portion of rental expense deemed representative 
of the interest factor) and includes the dividends paid to 
preferred shareholders of a subsidiary.  (See Note 14 of Notes to 
Financial Statements in the Company's 1996 Annual Report.)  During 
1995, 1994, 1993 and 1992 there was no preferred stock 
outstanding, and as a result, the ratios of earnings to combined 
fixed charges and preferred stock dividends were the same as the 
ratios of earnings to fixed charges.

<PAGE> 53

PART II.  OTHER INFORMATION

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

(a) Exhibits


    (10)    Material Contracts.

    (10.1)  Amendment, dated as of September 4, 1997, to the 
            Amended and Restated Agreement, dated as of May 30, 
            1996, between the Company and Leonard Abramson.

    (10.2)  Amendment, dated as of September 8, 1997, to 
            Employment Agreement, as of December 19, 1995, between 
            Aetna Services, Inc. and Daniel P. Kearney.*
 
    (12)    Statement Re Computation of Ratios.

    (12.1)  Computation of ratio of earnings to fixed charges and 
            ratio of earnings to combined fixed charges and 
            preferred stock dividends for the nine months ended 
            September 30, 1997 and for the years ended December 
            31, 1996, 1995, 1994, 1993 and 1992 for the Company 
            and for the nine months ended September 30, 1997 and 
            for the year ended December 31, 1996 for Aetna 
            Services, Inc.

    (15)    Letter Re Unaudited Interim Financial Information.

    (15.1)  Letter from KPMG Peat Marwick LLP acknowledging 
            awareness of the use of a report on unaudited interim 
            financial information, dated November 3, 1997.

    (27)    Financial Data Schedule.

*  Management contract or compensatory plan or arrangement.

(b) Reports on Form 8-K

    None.



<PAGE> 54

                       SIGNATURES

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.







                                         Aetna Inc.          
                                   _____________________________
                                       (Registrant)


Date  November 4, 1997         By   /s/   Robert J. Price       
                                   _____________________________
                                       (Signature)

                                      Robert J. Price
                                      Vice President
                                      and Corporate Controller
                                      (Chief Accounting Officer)