<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  June 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 June 30, 1997 
  ________________                          _________________

Common Capital Stock
 $.01 par value                                 149,951,690

<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.                                 50

Item 4.  Submission of Matters to a Vote
           of Security Holders.                             50

Item 5.  Other Information.                                 51

Item 6.  Exhibits and Reports on Form 8-K.                  51


Signatures                                                  52

<PAGE> 3

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements.

                          AETNA INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

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

Revenue:
  Premiums......................................    $    3,178.1 $    1,727.6   $    6,265.5 $    3,606.0
  Net investment income.........................           847.1        893.8        1,687.2      1,780.1
  Fees and other income.........................           568.4        548.1        1,126.1      1,066.3
  Net realized capital gains....................            34.7          4.4           36.2         66.4
                                                    ____________ ____________   ____________ ____________
      Total revenue.............................         4,628.3      3,173.9        9,115.0      6,518.8
                                                    ____________ ____________   ____________ ____________

Benefits and expenses:
  Current and future benefits...................         3,208.6      2,076.2        6,365.7      4,347.6
  Operating expenses............................           869.1        769.4        1,703.2      1,525.2
  Interest expense..............................            60.8         28.7          116.8         60.3
  Amortization of goodwill and other 
   acquired intangible assets...................            95.3          2.9          188.0          5.7
  Amortization of deferred policy 
   acquisition costs............................            55.4         38.1          100.8         75.1
  Reductions of loss on discontinued products...               -       (170.0)        (172.5)      (170.0)
  Severance and facilities charges
   (reserve reductions).........................           (31.0)       392.7          (45.0)       392.7
                                                    ____________ ____________   ____________ ____________
     Total benefits and expenses................         4,258.2      3,138.0        8,257.0      6,236.6
                                                    ____________ ____________   ____________ ____________
  
Income from continuing operations 
 before income taxes............................           370.1         35.9          858.0        282.2
Income taxes (benefits) 
  Current.......................................           115.7         62.0          239.6        124.8
  Deferred......................................            24.3        (50.4)         109.0        (32.4)
                                                    ____________ ____________   ____________ ____________ 
      Total income taxes........................           140.0         11.6          348.6         92.4
                                                    ____________ ____________   ____________ ____________

Income from continuing operations...............           230.1         24.3          509.4        189.8
Discontinued Operations, net of tax:
 Income from operations.........................               -            -              -        182.2
 Gain on sale...................................               -        263.7              -        263.7
                                                    ____________ ____________   ____________ ____________

      Net income ...............................    $      230.1 $      288.0   $      509.4 $      635.7
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________
      Net income applicable to  
        common ownership........................    $      216.2 $      288.0   $      481.6 $      635.7
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________

Results per common share:
Income from continuing operations...............    $       1.43 $        .21   $       3.19 $       1.63 
Discontinued Operations, net of tax:
 Income from operations.........................               -            -              -         1.57
 Gain on sale...................................               -         2.26              -         2.27
                                                    ____________ ____________   ____________ ____________

  Net income ...................................    $       1.43 $       2.47   $       3.19 $       5.47
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________

  Dividends declared............................    $        .20 $          -   $        .40 $        .69
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________

  Weighted average common shares and 
   common share equivalents.....................     151,204,884  116,490,454    151,074,342  116,297,376
                                                    ____________ ____________   ____________ ____________
                                                    ____________ ____________   ____________ ____________

<FN>

See Condensed Notes to Financial Statements.

</TABLE>

<PAGE> 4

                          AETNA INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                       June 30,        December 31,
(Millions)                                               1997              1996    
                                                     ___________       ____________
<S>                                                  <C>               <C>

Assets:
Investments:
  Debt securities available for sale, 
     at fair value (amortized cost 
     $30,862.8 and $31,441.4)..................      $  31,634.1       $  32,336.3
  Equity securities, at fair value
   (cost $1,003.4 and $963.4)..................          1,393.3           1,332.8
Short-term investments.........................            956.7             723.2
Mortgage loans.................................          6,322.1           6,700.9
Real estate....................................            636.7             850.2
Policy loans...................................            734.1             707.3
Other..........................................            876.1             835.5
                                                     ___________       ___________
      Total investments........................         42,553.1          43,486.2
Cash and cash equivalents......................          1,616.6           1,462.6
Accrued investment income......................            552.3             598.6
Premiums due and other receivables.............          1,369.5           1,190.4
Deferred policy acquisition costs..............          2,372.9           2,226.9
Goodwill and other acquired intangible assets..          8,625.3           8,432.6
Other assets...................................            958.6           1,070.1
Separate Accounts assets.......................         37,651.6          34,445.5
                                                     ___________       ___________
      Total assets.............................      $  95,699.9       $  92,912.9
                                                     ___________       ___________
                                                     ___________       ___________

<FN>

See Condensed Notes to Financial Statements.

</TABLE>


<PAGE> 5

                          AETNA INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                  (Continued)

<TABLE>
<CAPTION>

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

Liabilities:
  Future policy benefits........................       $  18,040.7       $  17,783.4
  Unpaid claims.................................           3,100.2           3,029.2
  Unearned premiums.............................             188.0             333.6
  Policyholders' funds left with the Company....          19,032.6          19,901.7
                                                       ___________       ___________
      Total insurance liabilities...............          40,361.5          41,047.9
  Dividends payable to shareholders.............              36.9              36.9
  Short-term debt...............................             434.7             282.8
  Long-term debt................................           2,375.6           2,380.0
  Current income taxes..........................             114.8             164.3
  Deferred income taxes.........................             148.2              31.7
  Other liabilities.............................           2,826.3           3,202.3
  Minority and participating policyholders'
   interests....................................             228.7             221.7
  Separate Accounts liabilities.................          37,609.7          34,380.6
                                                       ___________       ___________
      Total liabilities.........................          84,136.4          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 ($.01 par value; 15,000,000
   shares authorized; 11,655,457 in 1997 and
   11,655,546 in 1996 issued and outstanding)...             865.4             865.4
  Common Stock ($.01 par value; 500,000,000 
   shares authorized; 149,951,690 in 1997 and
   150,084,799 in 1996 issued and outstanding)..           3,997.2           4,032.8
  Net unrealized capital gains..................             352.6             340.0
  Retained earnings.............................           6,073.3           5,651.5
                                                       ___________       ___________

      Total shareholders' equity................          11,288.5          10,889.7
                                                       ___________       ___________

      Total liabilities, redeemable preferred
       securities and shareholders' equity......       $  95,699.9       $  92,912.9
                                                       ___________       ___________
                                                       ___________       ___________

  Shareholders' equity per common share.........       $     69.51       $     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
Six Months Ended June 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..........................     509.4                                            509.4
Change in net unrealized capital
  gains.............................      12.6                              12.6
Common stock issued for benefit 
  plans and other (1,670,891 shares)     118.3                  118.3
Repurchase of common shares 
  (1,804,000 shares)................    (153.9)                (153.9)
Common stock dividends..............     (59.8)                                           (59.8)
Preferred stock dividends...........     (27.8)                                           (27.8)       
                                     __________________________________________________________________


Balances at June 30, 1997            $11,288.5 $    865.4   $ 3,997.2  $   352.6      $ 6,073.3 $     - 
_____________________________________________________________________________________
                              _______________________________________________________




Six Months Ended June 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..........................     635.7                                            635.7
Change in net unrealized capital 
  gains.............................    (537.9)                           (537.9)
Common stock issued for benefit 
  plans and other (977,021 shares)..      51.4                   51.4
Common stock dividends..............     (79.7)                                           (79.7)       
                                     __________________________________________________________________


Balances at June 30, 1996            $ 7,342.3 $        -   $ 1,499.6  $   103.2      $ 5,751.6 $ (12.1)
_______________________________________________________________________________________________________ 
                                     __________________________________________________________________ 

<FN>

See Condensed Notes to Financial Statements.

</TABLE>


<PAGE> 7
                          AETNA INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                            Six Months Ended
                                                                                June 30,        
                                                                        ________________________
(Millions)                                                              1997           1996
                                                                        ____           ____
<S>                                                                     <C>            <C>
Cash Flows from Operating Activities:
   Net income........................................................   $   509.4      $   635.7
   Adjustments to reconcile net income to net
    cash used for operating activities:
      Income from Discontinued Operations............................           -         (182.2)
      Decrease in accrued investment income..........................        46.1           61.3
      (Increase) decrease in premiums due and other receivables......      (135.4)          13.9 
      Increase in deferred policy acquisition costs..................      (149.7)        (123.4)
      Depreciation and amortization..................................       266.0           90.3 
      Increase (decrease) in income taxes............................        80.9         (270.6)
      Net (increase) decrease in other assets and other liabilities..      (786.4)         655.9
      Decrease in insurance liabilities..............................      (315.2)      (1,345.1)
      Net realized capital gains.....................................       (36.2)         (66.4)
      Gain on sale of Discontinued Operations........................           -         (263.7)
      Amortization of net investment discounts.......................       (78.5)         (60.4)
      Other, net.....................................................        10.7             .2
                                                                        _________      _________
        Net cash used for operating activities.......................      (588.3)        (854.5)
                                                                        _________      _________ 
Cash Flows from Investing Activities:
   Proceeds from sales of:
      Debt securities available for sale.............................     8,088.7        7,681.8
      Equity securities..............................................       344.1          282.9
      Mortgage loans.................................................       116.8           80.4
      Real estate....................................................       261.4           74.8
      Other investments..............................................       356.5          529.2
      Short-term investments.........................................     8,379.9       17,489.7
      Discontinued Operations........................................           -        4,134.1
   Investment maturities and repayments of:
      Debt securities available for sale.............................     2,036.5        1,730.0
      Mortgage loans.................................................       392.9          691.7
   Cost of investments in:
      Debt securities available for sale.............................    (9,453.4)      (8,026.7)
      Equity securities..............................................      (301.0)        (643.1)
      Mortgage loans.................................................      (177.4)         (98.3)
      Real estate....................................................       (34.5)         (23.9)
      Other investments..............................................      (427.6)        (490.9)
      Short-term investments.........................................    (8,580.2)     (18,601.1)
   Increase in property and equipment................................       (31.3)         (18.0)
   Decrease (increase) in Separate Accounts..........................        23.1           (1.0)
   Other, net........................................................        51.3          (85.6)
                                                                        _________      _________ 
        Net cash provided by investing activities....................     1,045.8        4,706.0
                                                                        _________      _________
Cash Flows from Financing Activities:
   Deposits and interest credited for investment contracts...........       952.4        1,001.2
   Withdrawals of investment contracts...............................    (1,286.6)      (1,846.2)
   Issuance of long-term debt........................................          .1            4.6
   Repayment of long-term debt.......................................        (3.8)          (6.9)
   Common stock issued under benefit plans and other.................       118.3           51.4
   Common stock acquired.............................................      (153.9)             -
   Net increase (decrease) in short-term debt........................       158.4         (356.1)
   Dividends paid to shareholders....................................       (87.6)        (158.8)
                                                                        _________      _________ 
        Net cash used for financing activities.......................      (302.7)      (1,310.8)
                                                                        _________      _________ 
Effect of exchange rate changes on cash and cash equivalents.........         (.8)            .1
                                                                        _________      _________
Net increase in cash and cash equivalents............................       154.0        2,540.8 
Cash and cash equivalents, beginning of period.......................     1,462.6        1,712.7
                                                                        _________      _________
Cash and cash equivalents, end of period.............................   $ 1,616.6      $ 4,253.5
                                                                        _________      _________
                                                                        _________      _________

Supplemental Cash Flow Information:
   Interest paid.....................................................   $   114.2      $    56.1
                                                                        _________      _________
                                                                        _________      _________
   Income taxes paid ................................................   $   272.8      $   202.5
                                                                        _________      _________
                                                                        _________      _________
<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 six months ended 
June 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    Six Months Ended
(in millions, except per common share data)       June 30, 1996(1)     June 30, 1996(1)
___________________________________________      __________________    ________________
<S>                                                   <C>                   <C>

Revenue                                               $ 4,222.5             $ 8,606.6
                                                      _________             _________
                                                      _________             _________

Net realized capital gains 
  included in revenue                                 $     4.4             $    69.2
                                                      _________             _________
                                                      _________             _________

Income before income taxes                            $    33.9             $   321.9

Income taxes                                               30.0                 144.7
                                                      _________             _________

Net income                                            $     3.9             $   177.2
                                                      _________             _________
                                                      _________             _________

Net income (loss) per common share                    $    (.07)            $     .98
                                                      _________             _________
                                                      _________             _________

<FN>

(1)  Includes the Company's reductions of loss on discontinued products of $170.0 million 
     pretax ($110.5 after tax) for the three and six months ended June 30, 1996 and $392.7 
     million pretax ($255.0 million after tax) of severance and facilities charges for the 
     three and six months ended June 30, 1996.

</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.  The commercial paper was repaid 
prior to June 30, 1997.

On May 1, 1997, the Company sold Aetna Professional Management 
Corporation, a physician management business.  In connection with 
the sale, the Company recorded after-tax capital losses of $11 
million 
($20 million pretax) and $44 million ($43 million pretax) for the 
three and six months ended June 30, 1997 related to the 
disposition.



<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 $334 million and $344 million for the 
three months ended June 30, 1997 and 1996, respectively, and $673 
million and $697 million for the six months ended June 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 $18 million and $46 million for the three 
months ended June 30, 1997 and 1996, respectively, and $49 million 
and $84 million for the six months ended June 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>
                                                June 30, 1997              December 31, 1996  
                                             ____________________       ______________________
                                             Total                      Total 
                                             Recorded     Specific      Recorded      Specific 
(Millions)                                   Investment   Reserves      Investment    Reserves
______________________________________________________________________________________________
<S>                                          <C>          <C>           <C>           <C>

Supporting discontinued products             $   371.6    $    71.3     $   387.3     $   86.9
Supporting experience rated products             213.2         39.8         258.3         40.0
Supporting remaining products                    136.5         15.7         160.1         17.2
                                             _________________________________________________
 Total Impaired Loans                        $   721.3(1) $   126.8     $   805.7(1)  $  144.1
______________________________________________________________________________________________
                                             _________________________________________________
<FN>

(1)  Includes impaired loans of $263.7 million and $227.0 million at June 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 six 
months ended June 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                -            -            .7           .7
Credited to other accounts(1)                        -            -           (.7)         (.7)
Principal write-offs                              (4.0)         1.3          (4.5)        (7.2)
______________________________________________________________________________________________ 
Balance at June 30, 1997(2)                  $   132.7    $    76.0     $    31.1     $  239.8
______________________________________________________________________________________________
                                             _________________________________________________
<FN>

(1)  Reflects adjustments to reserves related to assets supporting experience rated products and 
     discontinued products which do not affect the Company's results of operations.
(2)  Total reserves at June 30, 1997 and December 31, 1996 include $126.8 million and $144.1
     million of specific reserves, respectively, and $113.0 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               Six Months Ended
                                            June 30, 1997                   June 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      $  373.9  $  8.9  $  8.0       $  377.4  $ 17.6  $ 15.9
Supporting experience rated products     215.8     4.2     3.9          227.1     8.4     7.7
Supporting remaining products            128.5     2.4     2.3          133.9     5.0     4.7
                                      _______________________________________________________
  Total                               $  718.2  $ 15.5  $ 14.2       $  738.4  $ 31.0  $ 28.3
_____________________________________________________________________________________________
                                      _______________________________________________________
</TABLE>

<TABLE>
<CAPTION>
                                         Three Months Ended               Six Months Ended
                                            June 30, 1996                   June 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      $  692.9  $ 15.0  $ 16.0       $  694.1  $ 30.0  $ 31.6 
Supporting experience rated products     506.4    10.3     9.8          503.9    19.8    19.6
Supporting remaining products            228.2     4.2     5.0          223.4     9.7     9.7
                                      _______________________________________________________
  Total                               $1,427.5  $ 29.5  $ 30.8       $1,421.4  $ 59.5  $ 60.9
_____________________________________________________________________________________________
                                      _______________________________________________________
</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 $66 million for the six months ended 
June 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 47 
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
June 30, 1997                                Amount      (Liability)  Value   
______________________________________________________________________________
<S>                                          <C>         <C>          <C>

Foreign exchange forward contracts - sell:
  Related to net investments in foreign
    affiliates                               $ 138.6     $   (.1)     $     -
  Related to investments in nondollar
    denominated assets                          42.5           -            -
Foreign exchange forward contracts - buy:
  Related to net investments in foreign
    affiliates                                   2.1           -            -
  Related to investments in nondollar
    denominated assets                          23.5          .9           .9
Futures contracts to purchase
    debt securities                             38.5          .3           .3
Interest rate swaps                             43.0           -          5.7
Warrants to purchase securities                 19.0         4.1          4.1

</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 six months ended June 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)                                   (160.4)               (1,667)
Adjustments(2)                                      (45.0)               (1,200)
                                                  _______                ______ 

   Balance at June 30, 1997                       $ 519.8                 4,085
_______________________________________________________________________________
                                                  _____________________________
<FN>
(1)  Includes $75.4 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 1,667 positions eliminated during the six months ended June 
30, 1997 related to the following segments:  86% - Aetna U.S. 
Healthcare, 7% - Aetna Retirement Services and 7% - 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) of the reserve, constituting the remaining 
portion of the reserve related to GICs, primarily as a result of 
continued favorable developments in real estate markets. The 
resulting 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 June 30, 1997, the 
receivable from continuing products, net of related deferred taxes 
payable of $37 million on the accrued interest income, was $504 
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 June 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 June 30, 1997       Results       Losses        Net(1) 
__________________________________________________________________________
<S>                                     <C>          <C>           <C> 

Net investment income                   $ 174.6      $     -       $ 174.6
Net realized capital gains                 63.8        (63.8)            -
Interest earned on receivable                                             
  from continuing products                  8.3            -           8.3
Other income                                2.6            -           2.6 
                                        __________________________________ 
     Total revenue                        249.3        (63.8)        185.5
                                        __________________________________

Current and future benefits               165.6         17.0         182.6
Operating expenses                          2.9            -           2.9
                                        __________________________________
     Total benefits and expenses          168.5         17.0         185.5
                                        __________________________________

Results of discontinued products        $  80.8      $ (80.8)      $     -
__________________________________________________________________________
                                        __________________________________


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

Net investment income                   $ 200.8      $      -      $ 200.8
Net realized capital gains                  2.1          (2.1)           -
Interest earned on receivable                  
  from continuing products                 13.1             -         13.1
Other income                                6.9             -          6.9
                                        __________________________________
     Total revenue                        222.9          (2.1)       220.8
                                        __________________________________

Current and future benefits               198.9          12.9        211.8
Operating expenses                          9.0             -          9.0
                                        __________________________________
     Total benefits and expenses          207.9          12.9        220.8
                                        __________________________________

Results of discontinued products        $  15.0       $ (15.0)     $     -
__________________________________________________________________________
                                        __________________________________
<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
Six months ended June 30, 1997         Results       Losses        Net(1) 
__________________________________________________________________________
<S>                                     <C>          <C>           <C> 

Net investment income                   $ 353.2      $      -      $ 353.2
Net realized capital gains                 94.3         (94.3)           -
Interest earned on receivable
  from continuing products                 16.6             -         16.6
Other income                               10.0             -         10.0 
                                        __________________________________ 
     Total revenue                        474.1         (94.3)       379.8
                                        __________________________________

Current and future benefits               335.1          38.9        374.0
Operating expenses                          5.8             -          5.8
                                        __________________________________
     Total benefits and expenses          340.9          38.9        379.8
                                        __________________________________

Results of discontinued products        $ 133.2      $ (133.2)     $     -
__________________________________________________________________________
                                        __________________________________


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

Net investment income                   $ 423.8      $      -      $ 423.8
Net realized capital gains                 24.0         (24.0)           -
Interest earned on receivable                  
  from continuing products                 26.2             -         26.2
Change in Accounting Policy -
  FAS No. 121(2)                            8.3             -          8.3
Other income                               11.8             -         11.8
                                        __________________________________
     Total revenue                        494.1         (24.0)       470.1
                                        __________________________________

Current and future benefits               408.6          50.1        458.7
Operating expenses                         11.4             -         11.4
                                        __________________________________
     Total benefits and expenses          420.0          50.1        470.1
                                        __________________________________

Results of discontinued products        $  74.1       $ (74.1)     $     -
__________________________________________________________________________
                                        __________________________________
<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 June 30, 1997 were
as follows (in millions):

<TABLE>
<CAPTION>

<S>                                                    <C>

Debt securities available for sale                     $5,002.4
Mortgage loans                                          2,526.5
Real estate                                               212.8
Short-term and other investments                          182.3
                                                       ________
   Total investments                                    7,924.0
Current and deferred income taxes                         155.5
Receivable from continuing products                       541.3
                                                       ________
   Total assets                                        $8,620.8
_______________________________________________________________
                                                       ________
Future policy benefits                                 $4,806.4
Policyholders' funds left with the Company              2,784.7
Reserve for anticipated future losses                          
  on discontinued products                                947.5
Other                                                      82.2
                                                       ________

   Total liabilities                                   $8,620.8
_______________________________________________________________
                                                       ________
</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 six months of 1997 was as 
follows (pretax, in millions):

<TABLE>
<CAPTION>

<S>                                                    <C>

Reserve at December 31, 1996                           $  986.8
Results of discontinued products                          133.2
Reserve reduction                                        (172.5)
                                                       ________ 
Reserve at June 30, 1997                               $  947.5
_______________________________________________________________
                                                       ________
</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 
June 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>
                                            June 30,           December 31,
                                             1997                  1996    
                                         ____________          ____________
<S>                                      <C>                   <C>

Total investments (excluding
  Separate Accounts)                     $  41,653.2           $  42,555.0
                                         ___________           ___________
                                         ___________           ___________

Total assets                             $  86,196.6           $  83,171.6
                                         ___________           ___________
                                         ___________           ___________

Total insurance liabilities              $  39,701.7           $  40,357.4
                                         ___________           ___________
                                         ___________           ___________

Total liabilities                        $  82,954.0           $  80,352.8
                                         ___________           ___________
                                         ___________           ___________

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

Total shareholder's equity               $   2,967.6           $   2,543.8
                                         ___________           ___________
                                         ___________           ___________
</TABLE>

Statements of Income Information:

<TABLE>
<CAPTION>
                                        Three Months Ended    Six Months Ended
                                          June 30, 1997         June 30, 1997 
                                        __________________    ________________
<S>                                      <C>                   <C>             

Total revenue                            $   3,286.6           $   6,441.8

Total benefits and expenses                  2,952.1               5,658.1
                                         ___________           ___________
                                                                          

Income before income taxes               $     334.5           $     783.7
                                         ___________           ___________
                                         ___________           ___________

Net income                               $     225.6           $     499.4
                                         ___________           ___________
                                         ___________           ___________

</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 from June 30, 1997 through December 31, 1997 without 
prior approval by state regulatory authorities is limited to 
approximately $143 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 June 30, 1997, and the 
related condensed consolidated statements of income for the three-
month and six-month periods ended June 30, 1997 and 1996, and the 
related condensed consolidated statements of shareholders' equity 
and cash flows for the six-month periods ended June 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
August 4, 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 June 
30, 1997 and 1996, and its results of operations for the three and 
six-month periods ended June 30, 1997 and 1996.

Consolidated Results of Operations
__________________________________

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

Premiums.............................    $ 3,178.1    $ 1,727.6      84.0 %   $ 6,265.5    $ 3,606.0    73.8%
Net investment income................        847.1        893.8      (5.2)      1,687.2      1,780.1    (5.2)
Fees and other income................        568.4        548.1       3.7       1,126.1      1,066.3     5.6
Net realized capital gains...........         34.7          4.4         -          36.2         66.4   (45.5)
                                         _________    _________               _________    _________         
    Total revenue....................      4,628.3      3,173.9      45.8       9,115.0      6,518.8    39.8

Current and future benefits..........      3,208.6      2,076.2      54.5       6,365.7      4,347.6    46.4
Operating expenses...................        869.1        769.4      13.0       1,703.2      1,525.2    11.7
Interest expense.....................         60.8         28.7     111.8         116.8         60.3    93.7
Amortization of goodwill and 
 other acquired intangible assets....         95.3          2.9         -         188.0          5.7       -
Amortization of deferred policy 
 acquisition costs...................         55.4         38.1      45.4         100.8         75.1    34.2
Reductions of loss on discontinued 
 products............................            -       (170.0)   (100.0)       (172.5)      (170.0)    1.5
Severance and facilities charges
 (reserve reductions)................        (31.0)       392.7         -         (45.0)       392.7       -
                                         _________    _________               _________    _________        
    Total benefits and expenses......      4,258.2      3,138.0      35.7       8,257.0      6,236.6    32.4
                                         _________    _________               _________    _________        

Income from continuing operations 
 before income taxes.................        370.1         35.9         -         858.0        282.2       -
Income taxes.........................        140.0         11.6         -         348.6         92.4       -
                                         _________    _________               _________    _________        

Income from continuing operations....        230.1         24.3         -         509.4        189.8   168.4
Discontinued Operations, net of tax:
 Income from operations..............            -            -         -             -        182.2  (100.0)
 Gain on sale........................            -        263.7    (100.0)            -        263.7  (100.0)
                                         _________    _________               _________    _________         
    Net income.......................    $   230.1    $   288.0     (20.1)    $   509.4    $   635.7   (19.9)
                                         _________    _________               _________    _________         
                                         _________    _________               _________    _________         
    Net income applicable 
      to common ownership............    $   216.2    $   288.0     (24.9)    $   481.6    $   635.7   (24.2)
                                         _________    _________               _________    _________         
                                         _________    _________               _________    _________         

Net realized capital gains from
 continuing operations, net of 
 tax (included above)................    $    24.3    $     2.6         -     $     8.4    $    44.0   (80.9)
                                         _________    _________               _________    _________         
                                         _________    _________               _________    _________         

Results per common share:

Income from continuing operations....    $    1.43    $     .21         -     $    3.19    $    1.63    95.7
Discontinued Operations, net of tax:
 Income from operations..............            -            -         -             -         1.57  (100.0)
 Gain on sale........................            -         2.26    (100.0)            -         2.27  (100.0)
                                         _________    _________               _________    _________         
    Net income.......................    $    1.43    $    2.47     (42.1)    $    3.19    $    5.47   (41.7)
                                         _________    _________               _________    _________         
                                         _________    _________               _________    _________         
</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 
$230 million and $509 million for the three and six months ended 
June 30, 1997, respectively, compared with $24 million and $190 
million for the same periods a year ago.  These results are 
affected by factors (discussed in more detail on page 27) 
including:

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

benefits for the three and six months ended June 30, 
1997 related to reductions of Aetna U.S. Healthcare's 
severance and facilities reserve; 

severance and facilities charges in the second quarter 
of 1996 primarily related to actions associated with the 
sale of the Company's property-casualty operations in 
that quarter; and 

net realized capital gains in all periods.

Excluding these factors, income from continuing operations would 
have been $186 million and $363 million for the three and six 
months ended June 30, 1997, respectively, and $166 million and 
$290 million for the same periods a year ago.

These results reflect increased earnings in each business segment 
and business growth in each core business partially 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 improved during the three and six 
months ended June 30, 1997 due to increased earnings from group 
insurance and other health products, partially offset by decreased 
earnings from health risk products when compared to pro forma 
earnings for the same periods a year ago.  Improved earnings in 
Aetna Retirement Services ("ARS") during the three and six months 
ended June 30, 1997 primarily reflect improved financial services' 
results due to increased fee income earned on a growing base of 
assets under management, partially offset by decreased individual 
life insurance results.  International's earnings also improved 
during the three and six months ended June 30, 1997 reflecting 
business and earnings growth in certain Asia Pacific and Latin 
American operations partially offset for the six months ended June 
30, 1997 by increased losses from start-up operations, primarily 
those in the Philippines.  Large Case Pensions' results during the 
three and six months ended June 30, 1997 improved, although assets 
under management declined, reflecting favorable prior year reserve 
development and lower operating expenses.  Large Case Pensions' 
earnings also reflect a decrease and an increase for the three and 
six months ended June 30, 1997, respectively, in income on the 
investments supporting the 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 and also 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.

Factors Affecting Comparison of 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 six 
months ended June 30, 1997 includes U.S. Healthcare 
results.

Income from continuing operations for the three and six 
months ended June 30, 1997 reflects an increase in 
amortization of goodwill and other acquired intangible 
assets of $77 million and $150 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 six 
months ended June 30, 1997 includes an increase in interest 
expense of $21 million and $37 million, respectively, 
primarily due to additional debt incurred in connection 
with the financing of the U.S. Healthcare merger.


<PAGE> 28

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

Overview (Continued)
____________________

Results of continuing operations for the three and six 
months ended June 30, 1996 include $30 million of interest 
income earned on the net proceeds received from the sale of 
the Company's property-casualty operations.

Results of continuing operations for the three and six 
months ended June 30, 1997 include benefits of $20 million 
and $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.)

Other Significant Factors

Results of continuing operations for the three and six 
months ended June 30, 1996, include severance and 
facilities charges of $255 million primarily related to 
actions associated with the sale of the Company's property-
casualty operations in that quarter.  (See "Severance and 
Facilities Charges".)

Results of continuing operations for the six months ended 
June 30, 1997 and for the three and six months ended June 
30, 1996 include $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".)

Results of continuing operations for the three and six 
months ended June 30, 1997 include $24 million and $8 
million, respectively, of net realized capital gains, 
compared with $3 million and $44 million, respectively, for 
the same periods a year ago.  Net realized capital gains 
for the three and six months ended June 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 three and six months 
ended June 30, 1997 also include losses of $11 million and 
$44 million, respectively, 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 three and six months ended June 30, 1996 include a 
$25 million gain related to the sale of Aetna Realty 
Investors ("ARI") which was substantially offset by net 
realized capital losses related to bond sales.  Net 
realized capital gains for the six months ended June 30, 
1996 also include a $15 million gain from the sale of an 
HMO subsidiary.

<PAGE> 29

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

Overview (Continued)
____________________

Net Income

The Company reported net income of $230 million and $509 million 
for the three and six months ended June 30, 1997, respectively, 
and $288 million and $636 million, respectively, for the same 
periods a year ago.  Net income for the three and six months ended 
June 30, 1996 includes a gain from the sale of the Company's 
property-casualty operations (reflected as Discontinued 
Operations) of $264 million, and for the six months ended June 30, 
1996, income from such operations of $182 million.

Merger 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 six months ended June 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> 30

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 June 30,          Six Months Ended June 30,   
                                       ________________________________    _______________________________
                                       1997         1996       % Change    1997        1996       % Change
                                       ____         ____       ________    ____        ____       ________
<S>                                    <C>          <C>        <C>         <C>         <C>        <C>

Premiums.............................  $ 2,737.3    $ 1,355.7   101.9%     $ 5,423.4   $ 2,907.8     86.5%
Net investment income................      109.2         97.2    12.3          212.8       191.0     11.4
Fees and other income................      388.3        381.6     1.8          766.4       737.2      4.0
Net realized capital gains (losses)..      (22.0)        (5.9)      -          (34.9)       25.3        -
                                       _________    _________              _________   _________         
   Total revenue.....................    3,212.8      1,828.6    75.7        6,367.7     3,861.3     64.9

Current and future benefits..........    2,295.9      1,177.9    94.9        4,545.8     2,522.8     80.2
Operating expenses...................      609.0        527.5    15.5        1,200.4     1,055.3     13.7
Amortization of goodwill and other 
 acquired intangible assets..........       90.5          2.1       -          180.9         4.2        -
Amortization of deferred policy 
 acquisition costs...................        8.6          2.3       -           13.1         5.1    156.9
Severance and facilities charges
 (reserve reductions)................      (31.0)        30.0       -          (45.0)       30.0        -
                                       _________    _________              _________   _________         
   Total benefits and expenses.......    2,973.0      1,739.8    70.9        5,895.2     3,617.4     63.0
                                       _________    _________              _________   _________         

Income before income taxes...........      239.8         88.8   170.0          472.5       243.9     93.7
Income taxes.........................      100.6         31.2       -          219.1        84.9    158.1
                                       _________    _________              _________   _________         

Net income...........................  $   139.2    $    57.6   141.7      $   253.4   $   159.0     59.4
                                       _________    _________              _________   _________         
                                       _________    _________              _________   _________         
Net realized capital gains (losses), 
 net of tax (included above).........  $   (12.8)   $    (3.9)      -      $   (39.2)  $    17.6        -
                                       _________    _________              _________   _________         
                                       _________    _________              _________   _________         
</TABLE>

Aetna U.S. Healthcare's net income for the three and six months 
ended June 30, 1997 increased by $82 million and $94 million, 
respectively, compared with the same periods a year ago.  These 
results reflect amortization of goodwill and other acquired 
intangible assets ($75 million and $149 million after tax, for the 
three and six months ended June 30, 1997, respectively, and $2 
million and $4 million, respectively, for the same periods a year 
ago) and net realized capital gains or losses.  Net income for the 
three and six months ended June 30, 1997 reflects after-tax 
benefits of $20 million and $29 million, respectively, 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 three and six months ended June 30, 
1996 reflects an after-tax severance and facilities charge of $20 
million.  Excluding the above items, results for the three and six 
months ended June 30, 1997 increased $123 million and $247 
million, respectively, from the prior year, primarily reflecting 
the inclusion of U.S. Healthcare.  (See Note 4 of Condensed Notes 
to Financial Statements.)

Net realized capital losses for the three and six months ended 
June 30, 1997 include after-tax losses of $11 million and $44 
million, respectively, related to the disposition of APMC.  Net 
realized capital gains for the six months ended June 30, 1996 
include a $15 million after-tax gain from the sale of an HMO 
subsidiary.  The earnings of APMC and the HMO subsidiary were not 
material to the results of Aetna U.S. Healthcare.

Aetna U.S. Healthcare's effective tax rates of 42% and 46% for the 
three and six months ended June 30, 1997, respectively, when 
compared to 35% 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 six months ended June 
30, 1997, the tax treatment of the disposition of APMC.

<PAGE> 31

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

Aetna U.S. Healthcare (Continued)
_________________________________

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            Six Months     Six Months
                                     Ended          Ended                   Ended          Ended
                                 June 30, 1997  June 30, 1996 % Change  June 30, 1997  June 30, 1996 % Change
                                 _____________________________________  _____________________________________
<S>                              <C>            <C>           <C>       <C>            <C>           <C>

Premiums........................ $ 2,737.3      $ 2,434.6       12.4%   $ 5,423.4      $ 5,025.1        7.9%
Net investment income...........     109.2          109.2          -        212.8          214.1        (.6)
Fees and other income...........     388.3          407.1       (4.6)       766.4          785.7       (2.5)
Net realized capital gains 
 (losses).......................     (22.0)          (5.9)         -        (34.9)          28.1          -
                                 _________      _________               _________      _________           
   Total revenue................   3,212.8        2,945.0        9.1      6,367.7        6,053.0        5.2

Current and future benefits.....   2,295.9        2,007.4       14.4      4,545.8        4,128.5       10.1
Operating expenses..............     609.0          670.2       (9.1)     1,200.4        1,343.3      (10.6)
Amortization of goodwill and 
 other acquired intangible 
 assets.........................      90.5           91.1        (.7)       180.9          182.2        (.7)
Amortization of deferred 
 policy acquisition costs.......       8.6            2.3          -         13.1            5.1      156.9
Severance and facilities charges
 (reserve reductions)...........     (31.0)          30.0          -        (45.0)          30.0          -
                                  ________      _________               _________      _________           
   Total benefits and 
    expenses....................   2,973.0        2,801.0        6.1      5,895.2        5,689.1        3.6
                                  ________      _________               _________      _________           

Income before income taxes......     239.8          144.0       66.5        472.5          363.9       29.8
Income taxes....................     100.6           66.4       51.5        219.1          163.6       33.9
                                 _________      _________               _________      _________           

Net income...................... $   139.2      $    77.6       79.4    $   253.4      $   200.3       26.5
                                 _________      _________               _________      _________           
                                 _________      _________               _________      _________           
Net realized capital gains 
 (losses), net of tax 
 (included above)............... $   (12.8)     $    (3.9)         -    $   (39.2)     $    19.3          -
                                 _________      _________               _________      _________           
                                 _________      _________               _________      _________           
<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> 32

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)                                              Pro Forma                             Pro Forma
                                    Three Months       Three Months         Six Months        Six Months
                                        Ended             Ended               Ended              Ended
                                    June 30, 1997      June 30, 1996      June 30, 1997      June 30, 1996
                                    _____________      _____________      _____________      _____________
<S>                                 <C>                <C>                <C>                <C>

Health Risk                         $ 110.7            $ 127.1            $ 236.0            $ 255.9
Group Insurance and Other Health       95.7               49.1              176.3               95.0
                                    _______            _______            _______            _______
   Total Aetna U.S. Healthcare      $ 206.4            $ 176.2            $ 412.3            $ 350.9
                                    _______            _______            _______            _______
                                    _______            _______            _______            _______

Health Risk Medical Loss Ratio         83.6%              80.8%              83.1%              80.4%
                                    _______            _______            _______            _______ 
                                    _______            _______            _______            _______ 
Health Risk SG&A Ratio                 12.0%              14.8%              11.8%              14.5%
                                    _______            _______            _______            _______ 
                                    _______            _______            _______            _______ 

</TABLE>

Aetna U.S. Healthcare's earnings for the three and six months 
ended June 30, 1997 increased by $30 million, or 17%, and $61 
million, or 18%, respectively, compared with the pro forma 
earnings for the same periods a year ago.  The segment's results 
reflect decreased Health Risk earnings and improved Group 
Insurance and Other Health earnings.

Earnings for the three and six months ended June 30, 1997 in the 
Health Risk business were impacted by several components.  
Commercial and Medicare HMO medical costs per member per month 
increased by 7% and 10%, respectively, for the three months ended 
June 30, 1997 and 8% and 11%, respectively, for the six months 
ended June 30, 1997 primarily resulting from higher inpatient 
facility, physician and pharmacy costs which were principally 
driven by higher unfavorable prior year reserve development in 
1997.  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 1% 
and 7%, respectively, for the three and six months ended June 30, 
1997.  The increases in Commercial HMO premiums per member per 
month for the three and six months ended June 30, 1997 resulted 
from premium rate increases instituted in 1997, which were 
partially offset by customers selecting lower premium plans and a 
shift in geographic mix.  Excluding the impact of prior year 
reserve development, Commercial and Medicare HMO medical costs per 
member per month increased 1% and 5%, respectively, for the three 
months ended June 30, 1997 and 3% and 6%, respectively, for the 
six months ended June 30, 1997.  Premium rates per member per 
month increased in excess of medical costs per member per month 
when compared to the same periods a year ago for the Medicare 
business, excluding the impact of prior year reserve development.  
Health Risk results also benefited from lower preferred provider 
organization (PPO) and Indemnity medical costs resulting from 
favorable prior year reserve runoff, and improvement in operating 
expenses as a result of continuing cost savings initiatives.

<PAGE> 33

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

Aetna U.S. Healthcare (Continued)
_________________________________

The increase in earnings for the three and six months ended June 
30, 1997 for the Group Insurance and Other Health business is 
primarily attributable to higher earnings related to Other Health 
products.  Favorable results related to Other Health products for 
the three and six months ended June 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.  Results also reflect higher 
earnings from Group Insurance products due to favorable 
adjustments to claim benefit reserve estimates for life, 
disability and long-term care products, as well as increased 
product sales.

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

<TABLE>
<CAPTION>
                                                                  Pro Forma     
                                   _June 30, 1997 (1)(2)     June 30, 1996 (1)(2)
                                   _____________________   ______________________
(Thousands)                        Risk   Nonrisk  Total    Risk   Nonrisk  Total
_________________________________________________________  ______________________ 

<S>                                <C>     <C>     <C>     <C>     <C>     <C>   
HMO
  Commercial                       3,536     578    4,114  3,209     520    3,729
  Medicare                           349      20      369    264      20      284
  Medicaid                           107       -      107    135       -      135
                                   _____   _____   ______  _____   _____   ______
    Total HMO                      3,992     598    4,590  3,608     540    4,148
POS                                  328   2,443    2,771    291   2,245    2,536
PPO                                  742   2,975    3,717    747   3,038    3,785
Indemnity                            415   2,521    2,936    537   2,909    3,446
                                   _____   _____   ______  _____   _____   ______
 Total Health Membership           5,477   8,537   14,014  5,183   8,732   13,915
                                   _____   _____   ______  _____   _____   ______
                                   _____   _____   ______  _____   _____   ______

Group Insurance: (3)
  Group Life                                        9,971                   9,460
                                                   ______                  ______
                                                   ______                  ______
  Disability                                        2,675                   2,343
                                                   ______                  ______
                                                   ______                  ______
  Long-Term Care                                       96                      96
                                                   ______                  ______
                                                   ______                  ______
<FN>

(1) Health membership as of June 30, 1997 reflects system and plan conversions; these 
    conversions will continue for the remainder of 1997.  The conversions predominately 
    affect Indemnity and PPO membership and have an immaterial impact on all other Health 
    products.  June 30, 1996 reflects adjustments computed for December 31, 1996 membership
    (a decrease of approximately 173 thousand members), based on known corrected data 
    from these conversions, as applied to June 30, 1996 membership previously reported.
(2) Group Insurance membership as of June 30, 1997 reflects the conversion to a new 
    membership reporting system.  June 30, 1996 reflects adjustments computed for 
    December 31, 1996 membership (an increase of approximately 1 million members), as 
    applied to June 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 June 30, 1997 increased by 99 
thousand members, or .7%, when compared to June 30, 1996.  
Membership increases in Commercial HMO, Medicare HMO and POS were 
partially offset by a decline in Indemnity enrollment.  The 
decline in Indemnity enrollment reflects the continued migration 
of Indemnity members to other managed care products.  Total HMO 
membership as of June 30, 1997 increased by 442 thousand members 
or 11% when compared to June 30, 1996.

<PAGE> 34

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

Aetna U.S. Healthcare (Continued)
_________________________________

Revenue for Aetna U.S. Healthcare increased by $284 million, or 
10%, and $533 million, or 9%, for the three and six months ended 
June 30, 1997, respectively, compared to the same periods a year 
ago, excluding revenues of $156 million for the six months ended 
June 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 $61 
million, or 9%, and $143 million, or 11%, for the three and six 
months ended June 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> 35

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 June 30,           Six Months Ended June 30,    
                                    __________________________________    ________________________________
                                    1997         1996         % Change    1997        1996        % Change
                                    ____         ____         ________    ____        ____        ________
<S>                                 <C>          <C>          <C>         <C>         <C>         <C>
Premiums (1)......................  $    38.0    $    41.8       (9.1)%   $    78.4   $    87.7     (10.6)%
Net investment income.............      279.4        264.6        5.6         552.0       531.9       3.8
Fees and other income (2).........      136.5        110.8       23.2         270.9       214.1      26.5
Net realized capital gains........        3.8          1.6      137.5           9.2        17.3     (46.8)
                                    _________    _________                _________   _________           
   Total revenue..................      457.7        418.8        9.3         910.5       851.0       7.0

Current and future benefits.......      256.0        254.1         .7         522.2       506.1       3.2
Operating expenses (2)............       91.7         84.8        8.1         173.1       167.6       3.3
Amortization of deferred policy 
 acquisition costs................       25.9         14.2       82.4          47.3        31.5      50.2
                                    _________    _________                _________   _________          
   Total benefits and expenses....      373.6        353.1        5.8         742.6       705.2       5.3
                                    _________    _________                _________   _________          
Income before income taxes........       84.1         65.7       28.0         167.9       145.8      15.2
Income taxes......................       25.1         17.9       40.2          52.5        41.5      26.5
                                    _________    _________                _________   _________          

Net income........................  $    59.0    $    47.8       23.4     $   115.4   $   104.3      10.6
                                    _________    _________                _________   _________          
                                    _________    _________                _________   _________          
Net realized capital gains, net
 of tax (included above)..........  $     2.5    $     1.1      127.3     $     6.0   $    11.3     (46.9)
                                    _________    _________                _________   _________           
                                    _________    _________                _________   _________           

Deposits not included in premiums 
 above:
  Annuities - fixed options.......  $   298.4    $   416.3      (28.3)    $   578.6   $   723.6     (20.0)
  Annuities - variable options....      796.2        681.0       16.9       1,614.3     1,340.3      20.4
  Individual Life Insurance.......      117.3        105.9       10.8         237.8       208.7      13.9
                                    _________    _________                _________   _________          
    Total.........................  $ 1,211.9    $ 1,203.2         .7     $ 2,430.7   $ 2,272.6       7.0
                                    _________    _________                _________   _________          
                                    _________    _________                _________   _________          

Assets under management: (3)(4)
  Annuities - fixed options.......                                        $11,898.1   $11,418.6       4.2
  Annuities - variable options....                                         17,527.1    12,415.2      41.2
                                                                          _________   _________          
    Subtotal Annuities............                                         29,425.2    23,833.8      23.5
  Investment advisory (2).........                                          4,525.0     1,096.8         -
                                                                          _________   _________          
    Financial services............                                         33,950.2    24,930.6      36.2
  Individual Life Insurance.......                                          2,993.3     2,700.9      10.8
                                                                          _________   _________          
    Total.........................                                        $36,943.5   $27,631.5      33.7
                                                                          _________   _________          
                                                                          _________   _________          

Individual life insurance 
 coverage issued..................                                        $ 2,538.0   $ 2,584.8      (1.8)
                                                                          _________   _________           
                                                                          _________   _________           
Individual life insurance 
 coverage in force................                                        $49,471.4   $47,772.5       3.6
                                                                          _________   _________          
                                                                          _________   _________          

<FN>
(1) Includes $13.7 million and $30.1 million for the three and six months ended 
    June 30, 1997, respectively, and $12.3 million and $32.2 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 three and six months ended June 30, 1997 include $9.6 million and $17.8 million,
    respectively, of fees and other income and $6.8 million and $12.7 million, respectively, 
    of operating expenses and, at June 30, 1997, $2,907.6 million 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 approximately $318 million and $155 
    million at June 30, 1997 and 1996, respectively.
(4) Includes $6,142.9 million and $3,772.3 million at June 30, 1997 and 1996, 
    respectively, of assets invested through ARS products in unaffiliated mutual funds.
</TABLE>

ARS' net income for the three and six months ended June 30, 1997 
increased $11 million when compared with the same periods a year 
ago.  Excluding net realized capital gains, results for the three 
and six months ended June 30, 1997 increased $10 million, or 21%, 
and $16 million, or 18%, respectively, from the prior year periods 
reflecting improved earnings from financial services products 
partially offset by lower earnings related to individual life 
insurance products.

<PAGE> 36

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

Aetna Retirement Services (Continued)
____________________________________ 

The table below sets forth earnings by product type, excluding net 
realized capital gains (in millions):

<TABLE>
<CAPTION>
                            Three Months Ended         Six Months Ended 
(Millions)                       June 30,                  June 30,     
                            ___________________       __________________
                            1997        1996          1997       1996   
                            ____        _______       ____       _______
<S>                         <C>         <C>           <C>        <C>
Financial services          $  39.8     $  25.6       $  76.5    $  52.6
Individual life insurance      16.7        21.1          32.9       40.4
                            _______     _______       _______    _______
  Total                     $  56.5     $  46.7       $ 109.4    $  93.0
                            _______     _______       _______    _______
                            _______     _______       _______    _______

</TABLE>

The $14 million and $24 million increases in earnings for the 
three and six months ended June 30, 1997, respectively, for 
financial services products reflects increased fee income 
primarily from increased assets under management.  Assets under 
management (excluding approximately $2.9 billion of assets under 
management that were previously reported in the Large Case 
Pensions segment) increased by 23% when compared to the same 
period a year ago primarily due to continued business growth 
through deposits and appreciation in the stock market.

Earnings for the three and six months ended June 30, 1997 from 
individual life insurance products decreased $4 million and $8 
million, respectively, primarily due to unfavorable mortality 
experience.

Earnings for financial services products reflect lower operating 
expenses relative to assets under management, and individual life 
insurance earnings also reflect lower operating expenses, in both 
cases resulting from cost savings associated with previous 
restructurings.

Of the $11.9 billion and $11.4 billion of fixed annuity assets 
under management at June 30, 1997 and 1996, respectively, 24% were 
fully guaranteed and 76% 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 8.1% for the six months ended June 30, 1997 
and 1996, respectively.  The average annualized credited rate on 
fully guaranteed investment contracts was 6.7% and 6.7% and the 
average annualized credited rate on experience rated investment 
contracts was 5.9% and 6.1% for the six months ended June 30, 1997 
and 1996, respectively.  The resulting annualized interest margins 
on fully guaranteed investment contracts were 1.1 % and 1.2% and 
on experience rated investment contracts were 2.1% and 2.0% for 
the six months ended June 30, 1997 and 1996, respectively.

<PAGE> 37

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

Aetna Retirement Services (Continued)
____________________________________ 

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 Financial 
Network Investment Corporation ("FNIC").  FNIC is a broker/dealer 
which is 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> 38

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

International
_____________

<TABLE>
<CAPTION>
Operating Summary
(Millions)                                 Three Months Ended June 30,          Six Months Ended June 30,   
                                        _________________________________    _______________________________
                                        1997         1996        % Change    1997         1996      % Change
                                        ____         ____        ________    ____         ____      ________
<S>                                     <C>          <C>         <C>         <C>          <C>       <C>

Premiums.............................   $  359.0     $  278.0      29.1%     $  676.4     $  517.6     30.7%
Net investment income................       93.8         82.8      13.3         186.1        165.8     12.2
Fees and other income................       32.6         32.5        .3          66.7         61.9      7.8
Net realized capital gains...........        6.9           .2         -          10.8          1.3        -
                                        ________     ________                ________     ________         
   Total revenue.....................      492.3        393.5      25.1         940.0        746.6     25.9

Current and future benefits..........      300.2        237.0      26.7         576.5        450.2     28.1
Operating expenses...................      114.6         88.1      30.1         215.0        171.9     25.1
Interest expense.....................        1.5          1.7     (11.8)          3.2          3.5     (8.6)
Amortization of goodwill and 
 other acquired intangible assets....        4.8           .7         -           7.1          1.4        -
Amortization of deferred policy 
 acquisition costs...................       20.9         21.6      (3.2)         40.4         38.5      4.9
                                        ________     ________                ________     ________         
   Total benefits and expenses.......      442.0        349.1      26.6         842.2        665.5     26.6
                                        ________     ________                ________     ________         

Income before income taxes...........       50.3         44.4      13.3          97.8         81.1     20.6
Income taxes ........................       13.9         17.1     (18.7)         30.4         29.1      4.5
                                        ________     ________                ________     ________         

Net income...........................   $   36.4     $   27.3      33.3      $   67.4     $   52.0     29.6
                                        ________     ________                ________     ________         
                                        ________     ________                ________     ________         
Net realized capital gains, 
 net of tax (included above).........   $    4.2     $     .2         -      $    7.7     $     .8        -
                                        ________     ________                ________     ________         
                                        ________     ________                ________     ________         

</TABLE>

International's net income for the three and six months ended June 
30, 1997 increased by $9 million and $15 million, respectively, 
compared with the same periods a year ago.  Excluding net realized 
capital gains, results for the three and six months ended June 30, 
1997 increased $5 million, or 19%, and $9 million, or 17%, 
respectively, from the prior year, primarily reflecting continued 
business growth in Taiwan and results from the Company's newly 
acquired operations in Brazil.  The improvement for the six months 
ended June 30, 1997 was partially offset by increased losses 
related to start-up operations, primarily those in the 
Philippines.

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 in the Corporate segment.

<PAGE> 39

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 June 30,           Six Months Ended June 30,   
                                        _________________________________     _______________________________
                                        1997         1996        % Change     1997        1996       % Change
                                        ____         ____        ________     ____        ____       ________
<S>                                     <C>          <C>         <C>          <C>         <C>        <C>

Premiums.............................   $     43.8   $     52.1     (15.9)%   $    87.3   $     92.9    (6.0)%
Net investment income................        361.2        395.5      (8.7)        726.8        838.4   (13.3)
Fees and other income (3)............          8.4         23.2     (63.8)         17.3         52.5   (67.0)
Net realized capital gains (losses)..         (6.1)         2.5         -          (1.2)        12.7       -
                                        __________   __________               _________   __________        
   Total revenue.....................        407.3        473.3     (13.9)        830.2        996.5   (16.7)

Current and future benefits..........        356.5        407.2     (12.5)        721.2        868.5   (17.0)
Operating expenses (3)...............          8.2         22.9     (64.2)         15.8         43.2   (63.4)
Reductions of loss on discontinued 
 products............................            -       (170.0)   (100.0)       (172.5)      (170.0)    1.5
                                        __________   __________               _________   __________        
   Total benefits and expenses.......        364.7        260.1      40.2         564.5        741.7   (23.9)
                                        __________   __________               _________   __________         

Income before income taxes...........         42.6        213.2     (80.0)        265.7        254.8     4.3
Income taxes.........................         17.6         75.3     (76.6)         99.3         90.1    10.2
                                        __________   __________               _________   __________        

Net income...........................   $     25.0   $    137.9     (81.9)    $   166.4   $    164.7     1.0
                                        __________   __________               _________   __________        
                                        __________   __________               _________   __________        

Net realized capital gains (losses),.
 net of tax (included above).........   $     (3.1)  $      1.7         -     $      .1   $      8.3   (98.8)
                                        __________   __________               _________   __________         
                                        __________   __________               _________   __________         

Deposits not included in premiums 
 above...............................   $    417.2   $    528.0     (21.0)    $   922.2   $    922.4       -
                                        __________   __________               _________   __________        
                                        __________   __________               _________   __________        

Assets under management (1)(2)(3)....                                         $33,849.5   $ 36,884.9    (8.2)
                                                                              _________   __________         
                                                                              _________   __________         

<FN>
(1) Excludes net unrealized capital gains of approximately $255 million and $150 
    million at June 30, 1997 and 1996, respectively.
(2) Includes assets under management of $7,751.3 million and $9,097.3 million at
    June 30, 1997 and 1996, respectively, related to discontinued products.
(3) The three and six months ended June 30, 1996 include $7.5 million and $15.7 million, 
    respectively, of fees and other income and $5.4 million and $12.7 million, respectively,
    of operating expenses and, at June 30, 1996, assets under management valued at $2,672.2 
    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.
</TABLE>

Large Case Pensions' net income for the three and six months ended 
June 30, 1997 decreased by $113 million and increased by $2 
million, respectively, compared with the same periods a year ago.  
Excluding the reduction of the loss on discontinued products 
(discussed below) and net realized capital gains or losses, 
results for the three and six months ended June 30, 1997 increased 
$2 million, or 9%, and $12 million, or 26%, respectively, from the 
prior year, reflecting favorable prior year reserve development 
and lower operating expenses resulting from the runoff of the 
business.  These results also reflect a decrease and an increase 
for the three and six months ended June 30, 1997, respectively, in 
income earned on investments supporting Large Case Pensions' 
capital, including earnings from leveraged buyout and venture 
capital limited partnerships.

Assets under management at June 30, 1997 were 8% 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> 40

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 three months ended June 30, 
1996 include a gain of $25 million related to the sale of ARI 
which was substantially offset by net realized capital losses 
related to bond sales.  The earnings of ARI for the three and six 
months ended June 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 June 30,      Six Months Ended June 30,
                                       ___________________________      _________________________
                                         1997             1996            1997           1996
                                         _____            ____            ____           ____
<S>                                      <C>              <C>             <C>            <C>
Scheduled contract maturities
 and benefit payments (1)                $  230.6         $  289.8        $  457.4       $  607.9
                                         ________         ________        ________       ________
                                         ________         ________        ________       ________

Contractholder withdrawals other
 than scheduled contract maturities
 and benefit payments                    $   50.3         $   47.1        $  136.1       $  362.3 (2)
                                         ________         ________        ________       ________    
                                         ________         ________        ________       ________    

Participant withdrawals                  $   30.9         $   44.7        $   64.8       $  101.1
                                         ________         ________        ________       ________
                                         ________         ________        ________       ________
<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) of the reserve, 
constituting the remaining portion of the reserve related to GICs, 
primarily as a result of continued favorable developments in real 
estate markets.  The resulting 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> 41

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 June 30, 1997, the 
receivable from continuing products, net of related deferred taxes 
payable of $37 million on the accrued interest income, was $504 
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 June 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 June 30,    Six Months Ended June 30,
                                      ___________________________    _________________________
                                          1997        1996              1997        1996
                                          ____        ____              ____        ____
<S>                                       <C>         <C>               <C>         <C>

Interest margin (a)                       $   5.9     $   1.2           $  11.8     $   9.9
Net realized capital gains                   41.5*        1.4              61.3*       15.6
Interest earned on receivable from 
 continuing products                          5.4         8.6              10.8        17.0
Other, net                                   (1.6)       (1.8)               .3         5.0
                                          _______     _______           _______     _______
 Results of discontinued products, 
 after tax                                $  51.2     $   9.4           $  84.2     $  47.5
                                          _______     _______           _______     _______
                                          _______     _______           _______     _______

Results of discontinued products, 
 pretax                                   $  80.8     $  15.0           $ 133.2     $  74.1
                                          _______     _______           _______     _______
                                          _______     _______           _______     _______

<FN>
(a) Represents the amount by which interest credited to holders of fully guaranteed 
    large case pension contracts is less than interest earned on invested assets 
    supporting such contracts.
*   Includes net realized capital gains of $37.3 million for the three and six months
    ended June 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 six months of 1997 was as 
follows (pretax, in millions):

<TABLE>
<CAPTION>
<S>                                        <C>
Reserve at December 31, 1996               $  986.8
Results of discontinued products              133.2
Reserve reduction                            (172.5)
                                           ________ 
Reserve at June 30, 1997                   $  947.5
                                           ________
                                           ________
</TABLE>

<PAGE> 42

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 June 30,    Six Months Ended June 30, 
                                   ___________________________    __________________________
                                       1997        1996              1997        1996
                                       ____        ____              ____        ____
<S>                                    <C>         <C>               <C>         <C>

Scheduled contract maturities, 
 settlements and benefit 
 payments (1)                          $  423.8    $  733.7          $  866.9    $1,366.9
                                       ________    ________          ________    ________
                                       ________    ________          ________    ________

Participant directed withdrawals       $    9.7    $   14.9          $   19.7    $   30.4
                                       ________    ________          ________    ________
                                       ________    ________          ________    ________

<FN>

(1) Includes early retirement of guaranteed investment contracts liabilities of $175.0 
    million and $181.8 million for the three and six months ended June 30, 1996, respectively. 
    There were no such retirements for the three and six months ended June 30, 1997.

</TABLE>

Cash required to fund these distributions was provided by earnings 
and scheduled payments on and sales of invested assets.

See "General Account Investments" on page 45.


<PAGE> 43

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 June 30,       Six Months Ended June 30,
                                       ___________________________      __________________________
                                       1997      1996     % Change      1997      1996    % Change
                                       ____      ____     ________      ____      ____    ________
<S>                                    <C>       <C>         <C>        <C>       <C>       <C>

Interest expense....................   $  38.5   $  17.5     120.0%     $  73.7   $  36.9    99.7%
Other (income) expense, net (1).....      (9.0)    228.8         -         19.5     253.3   (92.3)
<FN>

(1) Includes after-tax net realized capital gains of $33.5 million and $33.8 million for 
    the three and six months ended June 30, 1997, respectively, and $3.5 million and $6.0 
    million for the same periods a year ago.  After-tax net realized capital gains for the 
    three and six months ended June 30, 1997, include a $33.6 million gain related to the 
    sale of a portion of the Company's investment in Travelers Property Casualty Corp.

</TABLE>

The increase in interest expense of $21 million and $37 million 
for the three and six months ended June 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 (income) expense 
decreased $208 million and $206 million for the three and six 
months ended June 30, 1997, respectively, compared with the same 
period a year ago.  Other (income) expense for the three and six 
months ended June 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 $30 million (after tax) for the three and 
six months ended June 30, 1996 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 six months ended June 30, 1997 was approximately level 
compared with the same periods a year ago.

<PAGE> 44

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 six months ended June 30, 1997, the 
Company charged costs of $160 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 six months ended June 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, 5,288 had been eliminated through 
severance actions and the effects of higher attrition by June 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> 45

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

General Account Investments
___________________________

Debt Securities

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

<TABLE>
<CAPTION>
                                                  June 30,          December 31,
(Millions)                                          1997               1996      
________________________________________________________________________________ 
<S>                                           <C>                   <C>

Supporting discontinued products              $   5,002.4           $    5,189.3
Supporting experience rated products             14,471.8               14,888.9
Supporting remaining products                    12,159.9               12,258.1
                                              __________________________________
   Total debt securities (1)                  $  31,634.1           $   32,336.3
                                              __________________________________
                                              __________________________________
<FN>

(1)  Total debt securities at June 30, 1997 and December 31, 1996 include "Below
     Investment Grade" securities of $1.7 billion of which 69% 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 
$771 million at June 30, 1997, compared with $895 million at 
December 31, 1996.  Of the net unrealized capital gains at June 
30, 1997, $169 million and $332 million relate to assets 
supporting discontinued products and experience rated pension 
contractholders, respectively.

Mortgage Loans

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

<TABLE>
<CAPTION>
                                          June 30,    December 31,
(Millions)                                  1997         1996    
_________________________________________________________________
<S>                                       <C>           <C>

Supporting discontinued products          $ 2,526.5     $ 2,730.7
Supporting experience rated products        2,149.5       2,370.5
Supporting remaining products               1,646.1       1,599.7
                                          _______________________
   Total mortgage loan investments (1)    $ 6,322.1     $ 6,700.9
                                          _______________________
                                          _______________________
<FN>

(1) Mortgage loans at June 30, 1997 and December 31, 1996 include $722.2 million and 
    $801.1 million of restructured, potential problem and problem loans, respectively, 
    of which 81% 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 $126.8 
    million and $144.1 million at June 30, 1997 and December 31, 1996, respectively.  
    (See Note 6 of Condensed Notes to Financial Statements).
</TABLE>


<PAGE> 46

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

General Account Investments (Continued)
_______________________________________

During the first six 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 $379 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 six months of 1997.  Additional loans with a 
principal balance of $58 million were in the process of 
foreclosure at June 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 June 30 and the portion actually recorded as income 
were as follows:
<TABLE>
<CAPTION>
                                              Three Months Ended        Six Months Ended 
                                                  June 30,                  June 30,
                                              __________________       __________________
(Millions)                                    1997       1996          1997       1996
________________________________________________________________       __________________
<S>                                           <C>        <C>           <C>        <C>
Income which would have been recorded under 
 original terms of loans                      $  13.2    $  30.8       $  28.6    $  48.8
Income recorded                                   9.2       23.9          21.1       35.3
                                              _______    _______       _______    _______
Lost investment income (1)                    $   4.0    $   6.9       $   7.5    $  13.5
                                              _______    _______       _______    _______
                                              _______    _______       _______    _______
<FN>
(1) Lost investment income included 75% related to income allocated to investments 
    supporting discontinued and experience rated products for the three and six months 
    ended June 30, 1997, and 72% and 79%, 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>
                                          June 30,       December 31,
(Millions)                                  1997             1996     
_____________________________________________________________________ 
<S>                                       <C>            <C>

Investment real estate                    $   205.2      $   192.0
Properties held for sale (1)(2)(3)            431.5          658.2
                                          ________________________
   Total                                  $   636.7      $   850.2
                                          ________________________
                                          ________________________
<FN>

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

(2) Properties held for sale at June 30, 1997 and December 31, 1996 include 85% 
    and 84%, respectively, supporting discontinued and experience rated products.

(3) Foreclosed real estate classified as properties held for sale was carried at 54%
    and 57% of the Company's cash investment (unpaid mortgage balance plus capital 
    additions) at June 30, 1997 and December 31, 1996, respectively.
</TABLE>


<PAGE> 47

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      Six Months Ended  
                                                         June 30,               June 30,  
                                                    __________________      _________________ 
(Millions)                                          1997       1996         1997       1996 
______________________________________________________________________      _________________ 
<S>                                                 <C>        <C>          <C>        <C>

Allocable to discontinued products                  $  1.6     $   .1       $   5.7    $ (3.0)
Allocable to experience rated products                 2.0          -           3.1        .1
                                                                                             
Allocable to remaining products                        0.4       16.2           1.5      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 
June 30, 1997 was as follows:

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

Residential collateralized mortgage obligations:     $ 2,683.2      $ 2,773.2 
  Principal-only strips (included above)                  65.2           74.5 
  Interest-only strips (included above)                    8.1           22.4 
Other structured securities with derivative
   characteristics (1)                                    82.0           84.3 
<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> 48

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 June 30, 1997 and December 31, 1996 were 
$1.6 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 
six 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.  As of June 30, 1997, 2,998,400 shares of 
common stock had been repurchased pursuant to this authority at a 
cost of $237 million, of which 1,804,000 shares at a cost of $154 
million were repurchased during the six months ended June 30, 1997.

Ratings

The ratings of certain of Aetna Inc.'s subsidiaries follow:

<TABLE>
<CAPTION>
                                                    Rating Agencies                      
                             ____________________________________________________________
                                                             Moody's Investors   Standard
                             A.M. Best      Duff & Phelps        Service         & Poor's
                             ____________________________________________________________
<S>                               <C>       <C>                  <C>             <C>
Aetna Services, Inc.
  (senior debt) **
    February 4, 1997              *         A                    A2              A-  
    August 5, 1997                *         A                    A2              A 

Aetna Services, Inc.
  (commercial paper) **
    February 4, 1997              *         D-1                  P-1             A-2  
    August 5, 1997                *         D-1                  P-1             A-1  

Aetna Life Insurance Company
  (claims paying)
    February 4, 1997              A         AA-                  Aa3             A    
    August 5, 1997                A         AA-                  A1              A+   

Aetna Life Insurance and Annuity Company
  (claims paying)
    February 4, 1997              A+        AA+                  Aa2             AA-  
    August 5, 1997                A+        AA+                  Aa3             AA-  
<FN>
*    Not rated by the agency.
**   Fully and unconditionally guaranteed by Aetna Inc.
</TABLE>

In addition, certain of the Company's HMO subsidiaries are rated 
on their claims paying ability by A.M. Best.  All such ratings are 
in the "Excellent" or "Superior" categories.

<PAGE> 49

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

Dividends

On June 27, 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 July 25, 1997, payable August 15, 1997.

New Accounting Pronouncements
_____________________________

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

Regulatory Environment
______________________

Legislation to reform the federal Medicare program was passed by 
Congress on July 31, 1997 and is expected to be 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 likely reduce increases in the premiums 
payable to the Company as compared with the methodology previously 
used.  The level and extent of any such reductions will vary by 
geographic market and other factors.  While the phase-in 
provisions will provide the Company with an opportunity to offset 
any such reductions in premium increases by adjusting the premiums 
payable by members, the benefits included in the Company's 
products, and payment rates to hospitals, competition and other 
factors may result in such adjustments not fully offsetting any 
such reductions.  See "Regulatory Environment" in the Company's 
1996 Annual Report for further discussions of certain regulations 
relating to the Company.

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> 50

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

(a)  The Annual Meeting of Shareholders of the Company was held
     on Friday, April 25, 1997.

(b)  Directors elected at the meeting:

[CAPTION]
<TABLE>

                              Votes           Votes           Broker
                              For             Withheld        Non-Votes
                              _____           ________        _________
<S>                           <C>             <C>             <C>

Leonard Abramson              143,036,602       2,083,850             0
Betsy Z. Cohen                143,089,040       2,031,412             0
Ronald E. Compton             142,898,963       2,221,489             0
William H. Donaldson          143,095,415       2,025,037             0
Barbara Hackman Franklin      143,090,045       2,030,407             0
Jerome S. Goodman             143,103,054       2,017,398             0
Earl G. Graves                143,098,840       2,021,612             0
Gerald Greenwald              143,148,302       1,972,150             0
Ellen M. Hancock              143,091,793       2,028,659             0
Richard L. Huber              143,123,334       1,997,118             0
Michael H. Jordan             143,133,690       1,986,762             0
Jack D. Kuehler               143,120,902       1,999,550             0
Frank R. O'Keefe, Jr.         143,075,965       2,044,487             0
Judith Rodin                  143,114,021       2,006,431             0
Joseph T. Sebastianelli*      143,080,345       2,040,107             0
<FN>

*  Mr. Sebastianelli resigned from the Board of Directors in May 1997.

</TABLE>

(c)  Other matters voted upon:

[CAPTION]
<TABLE>

                              Votes           Votes                          Broker
                              For             Against         Abstain        Non-Votes
                              _____           _______         _______        _________
<S>                           <C>             <C>             <C>            <C>

(1) Appointment of 
     Independent Auditors     144,379,322         425,826       315,304               0

(2) Proposal to Rotate
     Location of Annual
     Meeting                    5,252,312     124,468,494     1,804,349      13,595,297

</TABLE>

<PAGE> 51

PART II.  OTHER INFORMATION (Continued)

Item 5.  Other Information.

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

The following table sets forth the Company's ratio of earnings to 
fixed charges and ratio of earnings to combined fixed charges and 
preferred stock dividends for the periods indicated.

<TABLE>
<CAPTION>
                                          Six Months Ended             Years ended December 31,      
                                                                 ____________________________________
                                           June 30, 1997         1996    1995    1994    1993    1992
                                          ________________       ____    ____    ____    ____    ____
<S>                                       <C>                    <C>     <C>     <C>     <C>     <C>

Ratio of Earnings to Fixed Charges         7.12                    2.45    4.97    4.74    (a)     1.90
Ratio of Earnings to Combined Fixed
 Charges and Preferred Stock Dividends     5.34                    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>

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.

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

(a) Exhibits

    (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 six months ended 
            June 30, 1997 and for the years ended December 31,
            1996, 1995, 1994, 1993 and 1992 for the Company and
            for the six months ended June 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 August 4, 1997.

    (27)    Financial Data Schedule.

(b) Reports on Form 8-K

    None.

<PAGE> 52

                       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  August 5, 1997         By   /s/   Robert J. Price       
                                 _____________________________
                                       (Signature)

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