SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549


                              FORM 10-K


         Annual Report Pursuant to Section 13 or 15(d) of the
                   Securities Exchange Act of 1934

For the Fiscal Year Ended                             Commission File
December 31, 1996                                     No. 1-8013


                 AMERICAN FINANCIAL ENTERPRISES, INC.

Incorporated under                                    IRS Employer I.D.
the Laws of Connecticut                               No. 31-0996797


           One East Fourth Street, Cincinnati, Ohio  45202
                            (513) 579-2172


Securities Registered Pursuant to Section 12(b) of the Act:
                                                      Name of Each Exchange
  Title of Each Class                                 on which Registered
  Common Stock, Par Value $1 Per Share                Pacific and Chicago

Securities Registered Pursuant to Section 12(g) of the Act:  None

    Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has been
subject to such filing requirements for the past 90 days.  Yes  X   No

    Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and need not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [X]

    As of March 15, 1997, there were 13,291,117 shares of the
Registrant's Common Stock outstanding.  The aggregate market value of
the Common Stock held by non-affiliates at that date, was
approximately $85 million (based upon non-affiliated holdings of
2,309,688 shares and a market price of $37.00 per share).

                          _________________

              Documents Incorporated by Reference:  None
<PAGE>

               AMERICAN FINANCIAL ENTERPRISES, INC.

                      INDEX TO ANNUAL REPORT

                           ON FORM 10-K


                                                                 Page
Part I
  Item  1 - Business                                                1
  Item  2 - Properties                                              *
  Item  3 - Legal Proceedings                                       *
  Item  4 - Submission of Matters to a Vote of Security Holders     *


Part II
  Item  5 - Market for Registrant's Common Equity and Related
              Stockholder Matters                                   2
  Item  6 - Selected Financial Data                                 2
  Item  7 - Management's Discussion and Analysis of Financial
              Condition and Results of Operations                   3
  Item  8 - Financial Statements and Supplementary Data             5
  Item  9 - Changes in and Disagreements with Accountants
              on Accounting and Financial Disclosure                6


Part III
  Item 10 - Directors and Executive Officers of the Registrant      6
  Item 11 - Executive Compensation                                  6
  Item 12 - Security Ownership of Certain Beneficial Owners
              and Management                                        6
  Item 13 - Certain Relationships and Related Transactions          6


Part IV
  Item 14 - Exhibits, Financial Statement Schedules, and
              Reports on Form 8-K                                 S-1



* The response to this Item is "none".
<PAGE>

                              PART I

                              ITEM 1

                             Business
Introduction

   American Financial Enterprises, Inc. ("AFEI") was incorporated
as a Connecticut corporation in August 1980.  Its address is One
East Fourth Street, Cincinnati, Ohio 45202; its phone number is
(513) 579-2172.  AFEI's assets consist primarily of investments
in equity securities of affiliate corporations.  AFEI employs
fewer than ten people, all of whom currently spend a significant
portion of their time as employees of its parent, American
Financial Corporation ("AFC"), and its subsidiaries.

   In April 1995, AFC merged with a subsidiary of American
Financial Group, Inc. ("AFG"), a new company formed to own 100%
of the common stock of AFC and American Premier Underwriters,
Inc. ("American Premier").  Shareholders of American Premier,
including AFEI, received shares of AFG on a one-for-one basis.
At March 1, 1997, AFG (through AFC and its subsidiaries) owned
approximately 83% of AFEI's outstanding shares of Common Stock.

   In February 1997, AFEI and AFG announced that they are jointly
examining the feasibility of a transaction whereby all
2.3 million shares of AFEI Common Stock not owned by AFG would be
exchanged on a one-for-one basis for AFG common stock and AFEI
would become wholly-owned.  AFEI and AFG intend that the
transaction be structured so that it is tax-free to AFEI
shareholders.  The transaction would be subject to the approval
of AFEI's shareholders other than AFG and other customary
approvals.

Investment in Affiliates

   At December 31, 1996, AFEI had investments in two companies,
both of which are treated as affiliates under the equity method
of accounting.  Under this method, AFEI includes in its income
the portion of the net earnings of these companies attributable
to the common shares owned by AFEI, even though they might not be
received as dividends.  See Note B to AFEI's Financial
Statements.  The following table shows certain information
concerning AFEI's investments in affiliates (in millions):
<TABLE>
<CAPTION>
                                                     Additional             AFEI's Investment (a)
                                                      Ownership       Carrying
                                 AFEI Ownership   by Affiliates       Value at       Market Value at
  Affiliate                      Shares     %    Shares      %        12/31/96    12/31/96   3/15/97
  <S>                             <C>      <C>    <C>      <C>           <C>         <C>       <C>
  American Financial Group         10.0     12%     8.7      11%          $397        $376      $371
  American Annuity Group            4.2     10%    30.9      71%            43          60        71
                                                                          $440        $436      $442
<FN>
  (a)  Carrying value represents acquisition cost plus AFEI's
       equity in undistributed earnings and losses.
</FN>
</TABLE>
<PAGE>
   AFG's subsidiaries operate primarily in specialty and multi-line
property and casualty insurance and, through American Annuity, the
sale of tax-deferred annuities and certain life and health
insurance.

   In September 1996, AFEI sold its investment in Citicasters to
Jacor Communications for approximately $76 million in cash plus
warrants to purchase Jacor common stock.  AFEI had purchased its
shares of Citicasters for $23.9 million in cash in June 1994.

                                 1
<PAGE>
                              PART II

                               ITEM 5

               Market for Registrant's Common Equity
                  and Related Stockholder Matters

   AFEI's Common Stock is listed on the Pacific and Chicago Stock
Exchanges under the symbols AFEP and AFEM, respectively.  The
table below sets forth the high and low sales prices for the
Common Stock as reported on the Pacific Stock Exchange and the
dividends paid.

                        1996                            1995
  Quarter       Low     High   Dividends        Low     High   Dividends
  First      $22.00   $26.50        $.10     $20.50   $24.00        $.10
  Second      23.00    25.50         .10      20.25    23.00         .10
  Third       22.00    26.75         .10      22.00    24.00         .10
  Fourth      25.00    28.50         .10      21.75    24.50         .25

   The number of beneficial owners of AFEI's Common Stock at
March 1, 1997, was in excess of 500; registered holders numbered
approximately 250.
<PAGE>
                               ITEM 6

                      Selected Financial Data

   The following financial data (in thousands, except per share
data) has been summarized from, and should be read in conjunction
with, AFEI's financial statements.
<TABLE>
<CAPTION>
                                         1996       1995         1994       1993       1992
<S>                                 <C>        <C>          <C>        <C>        <C>
Earnings Statement Data:
  Total Revenues                      $86,864    $32,053       $5,196    $78,773    $12,285
  Earnings (Loss) From:
   Operations                          56,592     20,912        4,210     42,674       (979)
   Extraordinary Items (a)             (2,714)      -            -          -          -
   Cumulative Effect of
     Accounting Changes (b)              -          -            -          -        49,067
  Net Earnings                         53,878     20,912        4,210     42,674     48,088

  Earnings (Loss) Per Common Share:
   Operations                           $4.26      $1.57         $.32      $3.21      ($.07)
   Extraordinary Items                   (.21)      -            -          -          -
   Cumulative Effect of
     Accounting Changes                  -          -            -          -          3.69
   Net Earnings                          4.05       1.57          .32       3.21       3.62

  Cash Dividends Per Common Share         .40        .55          .45        .05        .02

Balance Sheet Data:
Total Assets                         $506,264   $465,247     $390,396   $411,317   $487,137
Long-term Debt                           -        19,667(c)    16,000     15,000    161,500
Shareholders' Equity                  424,099    384,037      338,235    352,206    303,797
Book Value Per Common Share             31.91      28.89        25.45      26.50      22.86
<FN>
(a)Represents AFEI's share of affiliates' losses on prepayment of
   debt.

(b)Effective January 1, 1992, two affiliates recorded adjustments
   for cumulative effects of accounting changes from the
   implementation of Financial Accounting Standards Board
   Statements.

(c)  Represents borrowings under AFEI's credit line with AFC.
</FN>
</TABLE>
                                  2
<PAGE>
                                ITEM 7

                 Management's Discussion and Analysis
           of Financial Condition and Results of Operations

GENERAL

   Following is a discussion and analysis of the financial
statements and other statistical data that management believes
will enhance the understanding of AFEI's financial condition and
results of operations.  This discussion should be read in
conjunction with the financial statements beginning on page F-1.

   AFEI's assets consist primarily of investments in the common
stock of American Financial Group ("AFG") and American Annuity
Group.

   In February 1997, AFEI and AFG announced that they are
examining the feasibility of a transaction under which AFEI would
become wholly-owned.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Funds  At the current indicated rate, $10 million in
annual dividends from AFG is expected to be more than sufficient
to cover AFEI's fixed charges and other operating expenses.  If,
in the future, affiliate dividends are insufficient to meet its
fixed charges, AFEI would be required to meet them through bank
borrowings, sales of investments, borrowings from affiliates, or
similar transactions.

   AFEI has two revolving credit agreements under which it may
borrow an aggregate maximum of $25 million at any one time.  At
December 31, 1996, AFEI had no outstanding borrowings.

   In September 1996, AFEI sold its investment in Citicasters for
approximately $76 million in cash and repaid the $19.9 million
owed under its credit line with American Premier Underwriters.
Pursuant to a rights offering, AFEI purchased 390,000 shares of
American Annuity for $3.7 million in August 1995 using funds
borrowed under its bank line.

   Since March 1995, AFEI has paid quarterly dividends of
$1.3 million ($.10 per share).  Additionally, AFEI paid special
dividends in December 1995 ($2.0 million or $.15 per share) and
1994 ($6.0 million or $.45 per share) based on available cash and
capital.

Capital Requirements  AFEI is not engaged in capital-intensive
businesses and therefore does not have significant capital
resource requirements.  Since AFEI has a limited number of
employees, all of whom spend a significant portion of their time
as employees of AFC, there have been no direct expenditures for
fixed assets or rentals.

                                  3
<PAGE>
RESULTS OF OPERATIONS - THREE YEARS ENDED DECEMBER 31, 1996

Affiliates  Equity in net earnings and losses of affiliates (companies
in which AFEI owns a significant portion of the voting stock)
represents AFEI's proportionate share of the affiliates' earnings and
losses.  Since AFEI's basis in certain assets and liabilities of
affiliates differs from amounts reported by these companies,
adjustments are made to AFEI's share of their reported earnings.  The
following table presents the significant amounts used in calculating
AFEI's equity in net earnings of affiliates (in millions):
<TABLE>
<CAPTION>
                                              AFG           American Premier
                                        1996     1995(a)     1995(a)    1994
<S>                                  <C>      <C>          <C>         <C>
Affiliate earnings before
  extraordinary items                 $262.0   $160.6       $16.3       $0.3

AFEI's share of affiliate earnings    $ 31.4   $ 22.0       $ 3.7       $0.1
Basis adjustments, including
  amortization of goodwill              (8.6)    (0.9)         -         0.1

Equity in net earnings of
  affiliates as shown in
  Statement of Earnings               $ 22.8   $ 21.1       $ 3.7       $0.2

<CAPTION>
                                           American Annuity           Citicasters
                                        1996     1995    1994    1996(b)   1995    1994(c)
<S>                                    <C>     <C>     <C>      <C>      <C>     <C>
Affiliate earnings before
  extraordinary items                  $61.1    $55.5   $37.8    $4.7     $14.3   $59.7

AFEI's share of affiliate earnings     $ 6.1    $ 5.4   $ 3.6    $0.6      $1.9   $ 7.2
Basis adjustments, including
  amortization of goodwill              (1.2)     -       -      (0.1)     (0.3)   (6.2)

Equity in net earnings of
  affiliates as shown in
  Statement of Earnings                $ 4.9    $ 5.4   $ 3.6    $0.5     $ 1.6   $ 1.0
<FN>
(a)  AFEI received shares of AFG in exchange for its investment in
     American Premier in April 1995.  For 1995, affiliate earnings for
     AFG represent AFG's results since March 31.  Affiliate earnings for
     American Premier are American Premier's first quarter results.
(b)  AFEI sold its Citicasters shares in September 1996.  For 1996,
     affiliate earnings represent Citicasters' results through June 30.
(c)  Represents Citicasters' results since June 30, 1994, the date of
     AFEI's acquisition of its Citicasters shares.
</FN>
</TABLE>
<PAGE>
   American Financial Group  AFG reported net income of
$233.3 million in 1996 and $161.4 million in the nine months ended
December 31, 1995.  AFG's results for 1996 included $182 million
in after-tax realized gains on investments and an after-tax charge
of $80 million resulting from a decision to strengthen certain
insurance reserves.  Additionally, AFG's equity in net earnings of
investees decreased $32 million compared to 1995 due primarily to
certain fourth quarter writedowns and other unusual costs recorded
by its investee.  As discussed in Note A to the financial statements,
AFEI received shares of AFG, a new company formed to own both AFC
and American Premier, in exchange for its American Premier stock on
a one-for-one basis in April 1995.  No gain or loss was recorded on
the exchange of shares.

   American Premier  American Premier reported net income of
$16.3 million in the first quarter of 1995 compared to $300,000 for
all of 1994.  American Premier's results for 1994 included a loss of
$75.8 million on the sale of General Cable securities.

   American Annuity  American Annuity reported net income of
$55.1 million in 1996, $55.3 million in 1995 and $36.1 million in
1994.  American Annuity's results for 1996 included after-tax realized
gains of $800,000 compared to realized gains of $10.2 million in 1995
and losses of $100,000 in 1994.

   Citicasters  Citicasters reported net income of $4.7 million in the
first six months of 1996, $14.3 million in 1995 and $59.7 million in
the six months ended December 31, 1994.  Citicasters' results for 1994
included a $50.1 million after-tax gain from the sale of four
television stations which was not included in determining AFEI's
equity in Citicasters' earnings.

   Gains on Sales of Affiliates  AFEI recognized pretax gains of
$57.6 million in 1996 and $95,000 in 1995 on the disposal of
Citicasters shares and $339,000 in 1994 on the sale of General Cable
shares.

                                  4
<PAGE>
Interest Expense  Interest expense decreased to $907,000 in 1996 from
$1.2 million in 1995 due to debt repayments and lower interest rates
on borrowings.  The $496,000 increase in interest expense in 1995
compared to 1994 was due to increased average borrowings and higher
interest rates on borrowings.

Administrative and General Expenses  Administrative and general
expenses included charges of $320,000 in each of the years 1996, 1995
and 1994 for accounting, legal, data processing, tax and investment
services provided by AFC.  As a subsidiary of AFC, AFEI does not
incur all of the costs of operating as an independent entity.  While
it is not practical to estimate all of the costs of operating as a
separate entity, management believes the above expense allocation is
reasonable.  Also included in administrative and general expenses for
1996 is $1.2 million which represents the fair value of securities
donated as charitable contributions.

Income Taxes  The provision (credit) for income taxes includes the
effects of deductions relating to affiliate dividends.



                                ITEM 8

             Financial Statements and Supplementary Data
                                                            Page

Report of Independent Auditors                               F-1

Balance Sheet:
  December 31, 1996 and 1995                                 F-2

Statement of Earnings:
  Years ended December 31, 1996, 1995 and 1994               F-3

Statement of Changes in Shareholders' Equity:
  Years ended December 31, 1996, 1995 and 1994               F-4

Statement of Cash Flows:
  Years ended December 31, 1996, 1995 and 1994               F-5

Notes to Financial Statements                                F-6


"Selected Quarterly Financial Data" has been included in Note G to
AFEI's Financial Statements.

                                  5
<PAGE>
                                ITEM 9

     Changes in and Disagreements with Accountants on Accounting
                       and Financial Disclosure

   AFEI filed a report on Form 8-K on August 29, 1995, reporting a
change in independent auditors of American Premier Underwriters,
Inc., an AFEI investee. The report is incorporated herein by
reference.



                               PART III

   The information required by the following Items will be
provided within 120 days after the end of Registrant's fiscal
year.


  ITEM 10      Directors and Executive Officers of the Registrant


  ITEM 11      Executive Compensation


  ITEM 12      Security Ownership of Certain Beneficial Owners and Management


  ITEM 13      Certain Relationships and Related Transactions

                                  6
<PAGE>
                     REPORT OF INDEPENDENT AUDITORS


Board of Directors
American Financial Enterprises, Inc.

We have audited the accompanying balance sheets of American
Financial Enterprises, Inc. as of December 31, 1996 and 1995, and
the related statements of earnings, changes in shareholders'
equity, and cash flows for each of the three years in the period
ended December 31, 1996.  These financial statements are the
responsibility of the Company's management.  Our responsibility is
to express an opinion on these financial statements based on our
audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
American Financial Enterprises, Inc. at December 31, 1996 and 1995,
and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.



                                        ERNST & YOUNG LLP


Cincinnati, Ohio
March 25, 1997

                             F-1
<PAGE>
                 AMERICAN FINANCIAL ENTERPRISES, INC.

                            BALANCE SHEET

                        (Dollars in Thousands)



                                                   December 31,
                                                 1996        1995
               Assets

Cash and short-term investments              $ 59,939    $    506
Investment in affiliates:
  American Financial Group, Inc.              397,421     396,427
  American Annuity Group, Inc.                 43,237      41,978
  Citicasters Inc.                               -         26,336
Other equities - at market (cost - $7,368)      5,168        -
Other assets                                      499        -

                                             $506,264    $465,247



    Liabilities and Shareholders' Equity

Accounts payable, accrued expenses and
  other liabilities                          $  1,230    $    975
Payable to American Financial Corporation      80,935      80,235
                                               82,165      81,210

Shareholders' Equity:
  Preferred Stock, none issued                   -           -
  Common Stock, $1 par value
    - 20,000,000 shares authorized
    - 13,291,117 shares outstanding            13,291      13,291
  Capital surplus                             114,106     114,106
  Retained earnings                           278,802     230,240
  Equity in affiliates' net unrealized
    gains on marketable securities,
    net of deferred income taxes               17,900      26,400
      Total Shareholders' Equity              424,099     384,037

                                             $506,264    $465,247



See notes to financial statements.

                                 F-2
<PAGE>
                 AMERICAN FINANCIAL ENTERPRISES, INC.

                        STATEMENT OF EARNINGS

                (In Thousands, Except Per Share Data)
                                                 Year ended December 31,
                                                1996       1995      1994
Income:
  Equity in net earnings of affiliates:
    American Financial Group, Inc.           $22,831    $21,128    $ -
    American Premier Underwriters, Inc.         -         3,688       158
    American Annuity Group, Inc.               4,891      5,449     3,578
    Citicasters Inc.                             490      1,607     1,030
  Gains on sales of affiliates                57,648         95       339
  Interest income                              1,004         86        91
                                              86,864     32,053     5,196

Costs and Expenses:
  Interest charges on borrowed money             907      1,161       665
  Administrative and general expenses          2,825      1,857     2,080
                                               3,732      3,018     2,745

Earnings before federal income taxes and
  extraordinary items                         83,132     29,035     2,451

Provision (credit) for federal income taxes   26,540      8,123    (1,759)

Earnings before extraordinary items           56,592     20,912     4,210

Extraordinary items - share of affiliates'
  losses on prepayment of debt, net
  of tax benefit of $1,462                    (2,714)      -         -

Net Earnings                                 $53,878    $20,912    $4,210


Average number of Common Shares               13,291     13,291    13,291

Earnings (loss) per Common Share:
  Before extraordinary items                   $4.26      $1.57      $.32
  Extraordinary items                           (.21)      -         -
  Net earnings                                 $4.05      $1.57      $.32

Cash dividends per Common Share                 $.40       $.55      $.45



See notes to financial statements.

                                 F-3
<PAGE>
                 AMERICAN FINANCIAL ENTERPRISES, INC.

             STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

                            (In Thousands)
<TABLE>
<CAPTION>
                                                                Year ended December 31,
                                                              1996        1995        1994
<S>                                                      <C>         <C>         <C>
Common Stock:
  Balance at Beginning and End of Period                  $ 13,291    $ 13,291    $ 13,291



Capital Surplus:
  Balance at Beginning and End of Period                  $114,106    $114,106    $114,106



Retained Earnings:
  Balance at Beginning of Period                          $230,240    $216,638    $218,409
  Net earnings                                              53,878      20,912       4,210
  Cash dividends paid                                       (5,316)     (7,310)     (5,981)
       Balance at End of Period                           $278,802    $230,240    $216,638



Equity in Affiliates' Net Unrealized Gains (Losses) on
   Marketable Securities, Net of Deferred Income Taxes:
    Balance at Beginning of Period                        $ 26,400   ($  5,800)   $  6,400
    Change during period                                    (8,500)     32,200     (12,200)
       Balance at End of Period                           $ 17,900    $ 26,400   ($  5,800)
</TABLE>


See notes to financial statements.

                                 F-4
<PAGE>
                 AMERICAN FINANCIAL ENTERPRISES, INC.

                       STATEMENT OF CASH FLOWS

                            (In Thousands)
<TABLE>
<CAPTION>
                                                                   Year ended December 31,
                                                                 1996        1995        1994
<S>                                                          <C>         <C>         <C>
Operating Activities:
  Net earnings                                                $53,878     $20,912     $ 4,210
  Adjustments:
    Extraordinary items - share of affiliates'
      losses on prepayment of debt                              2,714        -           -
    Equity in net earnings of affiliates                      (28,212)    (31,872)     (4,766)
    Gains on sales of affiliates                              (57,648)        (95)       (339)
    Cash dividends from affiliates                             10,293      10,337       8,991
    Increase (decrease) in payable to affiliates               26,529       8,134      (1,759)
    Other                                                       1,263         123         751
                                                                8,817       7,539       7,088

Investing Activities:
  Sales of affiliates                                          75,599        -         21,628
  Purchases of affiliates                                        -         (3,665)    (23,852)
                                                               75,599      (3,665)     (2,224)

Financing Activities:
  Additional long-term borrowings                                -          4,300      18,500
  Borrowings from affiliates                                     -         19,667        -
  Repayments of borrowings from affiliates                    (19,667)       -           -
  Reduction of long-term debt                                    -        (20,300)    (17,500)
  Cash dividends paid                                          (5,316)     (7,310)     (5,981)
                                                              (24,983)     (3,643)     (4,981)

Net Increase (Decrease) In Cash and Short-term Investments     59,433         231        (117)

Cash and short-term investments at beginning
  of period                                                       506         275         392

Cash and short-term investments at end of period              $59,939     $   506    $    275
</TABLE>


See notes to financial statements.

                                 F-5
<PAGE>
                 AMERICAN FINANCIAL ENTERPRISES, INC.

                    NOTES TO FINANCIAL STATEMENTS


A. Basis of Presentation  American Financial Enterprises, Inc.
   ("AFEI") became a subsidiary of American Financial
   Corporation ("AFC") in 1980 as a result of the reorganization
   of The New York, New Haven and Hartford Railroad Company.  In
   April 1995, AFC merged with a subsidiary of American
   Financial Group, Inc. ("AFG") a new company formed to own
   100% of the common stock of AFC and American Premier
   Underwriters, Inc. ("American Premier").  Shareholders of
   American Premier, including AFEI, received shares of AFG on a
   one-for-one basis.  At December 31, 1996, AFG (through AFC
   and its subsidiaries) owned 10,981,429 shares (83%) of AFEI's
   outstanding Common Stock.  Certain reclassification have been
   made to prior years to conform to the current year's
   presentation.

   The preparation of the financial statements in conformity
   with generally accepted accounting principles requires
   management to make estimates and assumptions that affect the
   amounts reported in the financial statements and accompanying
   notes.  Changes in circumstances could cause actual results
   to differ materially from those estimates.

   Income Taxes  AFEI files consolidated federal income tax
   returns with AFC. Deferred income taxes are calculated using
   the liability method.  Under this method, deferred income tax
   assets and liabilities are determined based on differences
   between financial reporting and tax bases and are measured
   using enacted tax rates.  Current and deferred tax assets and
   liabilities are aggregated with other amounts receivable from
   or payable to AFC.

   Statement of Cash Flows  For cash flow purposes, "investing
   activities" are defined as acquiring and disposing of debt or
   equity instruments.  "Financing activities" include obtaining
   resources from owners and providing them with a return on
   their investments, borrowing money and repaying amounts
   borrowed.  All other activities are considered "operating".
   Short-term investments having original maturities of three
   months or less when purchased are considered to be cash
   equivalents for purposes of the financial statements.

B. Investment in Affiliates  AFEI's and AFC's combined ownership
   of the common stock of AFG and American Annuity Group, Inc.
   exceeds 20%.  Accordingly, these investments are treated as
   affiliates under the equity method of accounting.  Under this
   method, AFEI includes in its income the portion of the net
   earnings of these companies attributable to the common shares
   owned by AFEI, even though they might not be received as
   dividends.  Included in AFEI's balance sheet is its portion
   of affiliates' unrealized gains and losses on marketable
   securities.
<PAGE>
   Since AFEI's basis in certain assets and liabilities of
   affiliates differs from amounts reported by these companies,
   adjustments are made to their reported earnings in
   calculating AFEI's share of affiliate earnings.  Included in
   AFEI's retained earnings at December 31, 1996, was
   $136 million applicable to its equity in undistributed net
   earnings of affiliates.

   Investment in American Financial Group  AFEI owned
   10.0 million shares (12%) of AFG's common stock at
   December 31, 1996.  Since AFEI and AFC are AFG subsidiaries,
   AFG does not report shares owned by them as outstanding for
   financial reporting purposes.  AFEI (and AFC) receive
   dividends paid

                                 F-6
<PAGE>
                 AMERICAN FINANCIAL ENTERPRISES, INC.

              NOTES TO FINANCIAL STATEMENTS - CONTINUED


   on AFG common stock; however, their shares generally will not
   be eligible to be voted as long as AFEI (and AFC) are owned
   by AFG.  The market value of AFEI's investment in AFG was
   $376 million and $305 million at December 31, 1996 and 1995,
   respectively.  AFG's subsidiaries operate primarily in
   specialty and multi-line property and casualty insurance and
   the sale of tax-deferred annuities.  See Note H, "Subsequent
   Event".

   Summarized financial information for AFG (for the periods it
   was accounted for as an affiliate) follows (in millions):

                                                      Nine months
                                                            ended
                                                1996     12/31/95
      Cash and Investments                   $11,739      $11,493
      Other Assets                             3,312        3,461
      Insurance Claims and Reserves           11,312       10,981
      Long-term Debt                             518          882
      Minority Interest                          494          314
      Shareholders' Equity                     1,554        1,440

      Revenues                               $ 4,115.4    $ 3,076.0
      Earnings Before Extraordinary Items        262.0        160.6
      Extraordinary Items - Gain (Loss) on
        Prepayment of Debt                       (28.7)         0.8
      Net Earnings                               233.3        161.4

   Investment in American Premier  As discussed in Note A, AFEI
   received shares of American Financial Group in exchange for
   its American Premier stock on a one-for-one basis in April
   1995.

   Summarized financial information for American Premier (for
   the periods it was accounted for as an affiliate) follows
   (in millions):

                                               1995
                                            1st Qtr       1994
      Revenues                               $432.8   $1,758.9
      Income from Continuing Operations        16.3        0.8
      Discontinued Operations                   -         (0.5)
      Net Income                               16.3        0.3

   American Premier's 1994 results included a $75.8 million
   loss on the sale of securities of General Cable.

   Investment in American Annuity Group  AFEI owned 4.2 million
   shares (10%) of American Annuity common stock at
   December 31, 1996.  The market value of AFEI's investment in
   American Annuity was $60 million and $51 million at
   December 31, 1996 and 1995, respectively.  American Annuity is
   engaged in the sale of tax-deferred annuities and certain life
   and health insurance.
                               F-7
<PAGE>
                 AMERICAN FINANCIAL ENTERPRISES, INC.

              NOTES TO FINANCIAL STATEMENTS - CONTINUED


   Summarized financial information for American Annuity follows (in
   millions):

                                                  1996       1995      1994
        Cash and Investments                    $6,315     $5,998
        Other Assets                               709        613
        Annuity Benefits Accumulated             5,366      5,052
        Notes Payable                              115        168
        Mandatorily Redeemable Preferred
          Securities of Subsidiary Trust            75          -
        Stockholders' Equity                       487        429

        Revenues                                $  577.3   $  439.6    $372.7
        Income from Continuing Operations           61.1       58.7      40.9
        Discontinued Operations                      -         (3.2)     (2.6)
        Extraordinary Items - Loss on
          Prepayment of Debt                        (6.0)      (0.2)     (1.7)
        Cumulative Effect of Accounting Change       -          -        (0.5)
        Net Income                                  55.1       55.3      36.1


   Investment in Citicasters  In September 1996, AFEI sold its
   investment in Citicasters to Jacor Communications for
   approximately $76 million in cash plus warrants to purchase
   Jacor common stock.  AFEI realized a pretax gain of
   approximately $57 million on the sale.

   Investment in General Cable  In June 1994, AFEI sold its
   investment in General Cable common stock to an unaffiliated
   company for $21.6 million in cash. AFEI realized a $339,000
   pretax gain on the sale.

C. Payable to American Financial Corporation  In December 1995,
   AFEI paid the outstanding balance of its bank line using
   funds borrowed under a new $20 million credit agreement with
   AFC which expires in December 1997.  AFC assigned this
   credit agreement to American Premier in March 1996.
   Borrowings bear interest at rates 1/8th of 1% below the bank
   line rates. All other terms are similar to those in the bank
   line agreement.  Maximum borrowings under the two lines may
   not exceed $25 million at any one time.  AFEI had no
   borrowings under this agreement at December 31, 1996 and
   $19.7 million borrowed at December 31, 1995.  The remainder
   of AFEI's payable to AFC at these dates represents primarily
   tax payments due under AFEI's tax agreement and deferred
   taxes on AFEI's equity in affiliates' net unrealized gains
   on marketable securities.  AFEI paid cash interest to
   affiliates totaling $918,000 in 1996.
<PAGE>
D. Bank Line Agreement  AFEI has a revolving credit agreement
   under which it may borrow a maximum of $20 million through
   December 1997.  Loans under the line of credit bear interest
   at rates approximating prime and are collateralized by a
   pledge of AFG common stock having a market value of two times
   the amount borrowed under the line.  The lender charges an
   annual fee of 1/4% of the unused portion of the line of
   credit. There were no borrowings at December 31, 1996 or 1995.
   Under this agreement, AFEI paid cash interest totaling
   $1.2 million and $634,000 in 1995 and 1994, respectively.

                                 F-8
<PAGE>
                 AMERICAN FINANCIAL ENTERPRISES, INC.

              NOTES TO FINANCIAL STATEMENTS - CONTINUED


E. Shareholders' Equity  AFEI's authorized capital includes
   5.5 million shares of $1 Par, Non-voting Cumulative
   Preferred Stock and 1.5 million shares of $1 Par, Voting
   Cumulative Preferred Stock.

   Prior to 1990, AFEI granted nonqualified stock options to
   certain officers and directors at the fair value of the
   underlying AFEI Common Stock (ranging from $19.88 - $22.50
   per share) at the date of grant.  The options became
   exercisable at the rate of 20% per year commencing one year
   after grant, and generally expire ten years after grant.  No
   options have been exercised.  At December 31, 1996, options
   for 462,500 shares were outstanding and exercisable.

   Included in equity in affiliates' net unrealized gains on
   marketable securities at December 31, 1996 is $1.4 million
   representing AFEI's net unrealized loss on its investment
   in equity securities.

F. Income Taxes  The following is a reconciliation of federal
   income taxes at the "statutory" rate of 35% and as shown in
   the Statement of Earnings (in thousands):

                                                  1996      1995      1994
     Earnings before income taxes
       and extraordinary items                 $83,132   $29,035    $2,451
     Extraordinary items before income taxes    (4,176)     -         -
     Adjusted earnings before income taxes     $78,956   $29,035    $2,451

     Income taxes at statutory rate             27,635    10,162       858

     Effect of dividends received deductions    (2,557)   (2,039)   (2,617)
     Taxes applicable to extraordinary items     1,462      -         -

     Provision (credit) for federal income
       taxes as shown in the Statement of
       Earnings                                $26,540   $ 8,123   ($1,759)

   The dividends received deductions relate to dividends
   received or accrued on the stocks of affiliates.
<PAGE>
   AFEI's tax agreement with AFC calls for payments to (or
   benefits from) AFC based on book taxable income without
   regard to temporary differences (differences between the
   book basis and the tax basis of assets or liabilities that
   will result in future taxable income or deductions).  The
   following were effects of temporary differences and net
   operating loss carryforwards ("NOLs") at December 31, (in
   millions):

                                         1996      1995
     Investment in affiliates           $96.7     $92.8
     Tax return NOL                       -        (7.8)
     Other separate company NOL         (23.7)    (37.0)

                                 F-9
<PAGE>
                 AMERICAN FINANCIAL ENTERPRISES, INC.

              NOTES TO FINANCIAL STATEMENTS - CONTINUED


G. Quarterly Operating Results (Unaudited)  The following table
   presents quarterly results of operations for the years ended
   December 31, 1996 and 1995 (in thousands, except per share
   data):
                                1st      2nd      3rd        4th        Total
                              Quarter  Quarter   Quarter   Quarter       Year
   1996
   Revenues                    $9,967   $8,144   $69,303     ($550)   $86,864
   Earnings (loss) before
     extraordinary items        6,622    5,447    45,100      (577)    56,592
   Extraordinary items           (725)    (974)     (762)     (253)    (2,714)
   Net earnings (loss)          5,897    4,473    44,338      (830)    53,878

   Earnings per Common Share:
     Before extraordinary
       items                     $.50     $.41     $3.39     ($.04)     $4.26
     Extraordinary items         (.06)    (.07)     (.05)     (.02)      (.21)
     Net earnings (loss)          .44      .34      3.34      (.06)      4.05

   1995
   Revenues                    $4,955   $4,771    $7,314   $15,013    $32,053
   Net earnings                 3,460    3,301     4,779     9,372     20,912

   Net earnings per
     Common Share                $.26     $.25      $.36      $.70      $1.57

   See Note B for effects of significant items recognized in
   individual quarters.

H. Subsequent Event (Unaudited)  In February 1997, AFEI and AFG
   announced that they are jointly examining the feasibility of
   a transaction whereby all 2.3 million shares of AFEI Common
   Stock not owned by AFG would be exchanged on a one-for-one
   basis for AFG common stock and AFEI would become wholly-
   owned.  AFEI and AFG intend that the transaction be
   structured so that it is tax-free to AFEI shareholders.  The
   transaction would be subject to the approval of AFEI's
   shareholders other than AFG and other customary approvals.
   In light of this development, AFEI will likely suspend
   accounting for its investment in AFG on the equity method in
   1997 and recognize only the actual dividends received from
   AFG as income.

                                 F-10
<PAGE>
                               PART IV

                               ITEM 14

   Exhibits, Financial Statement Schedules, and Reports on Form 8-K


(a) Documents filed as part of this Report:

    1.  Financial Statements are included in Part II, Item 8.

    2.  Financial Statement Schedules:

        A.  Selected Quarterly Financial Data is
            included in Note G to AFEI's Financial Statements.

        B.  The Annual Report on Form 10-K of American
            Financial Group, Inc. (File No. 1-11453) for the
            period ended December 31, 1996, is hereby incorporated
            by reference.

            Copies of this Annual Report on Form 10-K
            and all subsequent reports filed pursuant to Section
            13 of the Securities Exchange Act of 1934 may be
            obtained from the Commission's principal office at
            Judiciary Plaza, 450 Fifth Street, N.W., Washington,
            D.C. 20549, upon payment of the fees prescribed by the
            rules and regulations of the Commission or may be
            examined without charge at Room 1024 of the
            Commission's public reference facilities at the same
            address.  Copies of material filed with the Commission
            may also be inspected at the following regional
            offices: 500 West Madison Street, Suite 1400, Chicago,
            Illinois 60661; and 7 World Trade Center, Suite 1300,
            New York, New York 10048.

        C.  All other schedules for which provisions are
            made in the applicable regulation of the Securities
            and Exchange Commission have been omitted as they are
            not applicable, not required, or the information
            required thereby is set forth in the Financial
            Statements or the notes thereto.

   3.  Exhibits - see Exhibit Index on page E-1.

(b)    Reports on Form 8-K:  None.

                                 S-1
<PAGE>
                              Signatures


    Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, American Financial Enterprises, Inc. has duly
caused this Report to be signed on its behalf by the undersigned,
duly authorized.


                                     American Financial Enterprises, Inc.


Signed:  March 26, 1997              By:s/CARL H. LINDNER
                                        Carl H. Lindner, Chairman ofthe
                                        Board and President




   Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated:

     Signature               Capacity                    Date

s/CARL H. LINDNER      Chairman of the Board             March 26, 1997
  Carl H. Lindner



s/JULIUS S. ANREDER    Director*                         March 26, 1997
  Julius S. Anreder



s/JAMES E. EVANS       Director*                         March 26, 1997
  James E. Evans



s/FRED J. RUNK         Director, Vice President and      March 26, 1997
  Fred J. Runk           Treasurer (Principal Financial
                          and Accounting Officer)



*Member of the Audit Committee
<PAGE>

                 AMERICAN FINANCIAL ENTERPRISES, INC.

                          INDEX TO EXHIBITS

Number   Exhibit Description

 3(a)    The Amended and Restated Certificate   Incorporated by reference to
         of Incorporation                       Registrant's Annual Report on
                                                Form 10-K for December 31,
                                                1993.

 3(b)    By-Laws                                Incorporated by reference to
                                                Registrant's Annual Report on
                                                Form 10-K for December 31,
                                                1993.

 4(a)    Credit Agreement dated as of           Incorporated by reference to
         September 30, 1993 between AFEI and    Registrant's Quarterly Report
         The First National Bank of Boston      on Form 10-Q for September 30,
                                                1993.

 4(b)    Credit Agreement dated as of           Incorporated by reference to
         December 29, 1995 between AFEI         Registrant's Annual Report on
         and American Financial Corporation     Form 10-K for December 31,
                                                1995.

 10      Management Contract:  Stock Option     Incorporated by reference to
         Agreement                              Registrant's Annual Report on
                                                Form 10-K for December 31,
                                                1993.

 16      Letter from Deloitte & Touche LLP      Incorporated by reference to
                                                AFEI's Form 8-K filed on
                                                August 29, 1995.

 27      Financial Data Schedule                           (*)

 99      Form 10-K of American Financial
         Group, Inc. for the year ended
         December 31, 1996

 (*)   Copy included in Report filed electronically with the
       Securities and Exchange Commission.

                                 E-1