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                                  AGREEMENT                       Exhibit 10.25

     AGREEMENT made as of January 1, 1997, by and between American States
Financial Corporation (hereinafter called "Company"), an Indiana corporation
having its principal place of business in Indianapolis, Indiana, and Robert A.
Anker (hereinafter called "Employee"):

                                  WITNESSETH:

     WHEREAS, Employee desires to render faithful and efficient service to
Company; and

     WHEREAS, Company desires to receive the benefit of Employee's service; and

     WHEREAS, Employee is willing to be employed by Company; and

     WHEREAS, Company deems it essential to formalize the conditions of
Employee's employment by written agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties agree as follows:

     1. Office.  Company hereby employs Employee as its Chief Executive
Officer, and Employee hereby agrees to serve Company in such capacity or in
such other capacity as the Board of Directors of Company may from time to time
designate.

     2. Term of Employment.  Employee's employment shall be for the "Employment
Period," with the term commencing on January 1, 1997 and ending on December 31,
1997.  During the Employment Period, Employee's employment may be terminated
for Cause as defined in Section 5.  Employee's employment may continue by
mutual agreement at the will of Company after the expiration of the Employment
Period or Employee and Employer may extend this contract by mutual written
agreement.  During any such period of at will employment, the provisions of
Sections 12, 15, 16 and 17 of this Agreement shall continue to apply as if the
Employment Period under this Agreement had not ended.

     3. Incapacity.  If during the Employment Period, Employee should be
prevented from performing Employee's duties or fulfilling Employee's
responsibilities by reason of any incapacity or disability that is reasonably
expected to continue for a period of six (6) months or until death, then
Company, in its sole and absolute discretion, may, based on the opinion of a
qualified physician, consider such incapacity or disability to be total and may
on ninety (90) days written notice to Employee terminate the Employment Period.


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     4. Death.  The Employment Period shall automatically terminate upon the
death of Employee.

     5. For Cause.  For purposes of this Agreement, Cause means a determination
by the Board of Directors of Company or the Chief Executive Officer of Lincoln
National Corporation ("Lincoln"), made in good faith, without being bound by
Company's progressive discipline policy for employees:

        a. that Employee has engaged in acts or omissions against  Company, its
parent company, or any of its subsidiaries constituting dishonesty, intentional
breach of fiduciary obligation or intentional wrongdoing or misfeasance;

        b. that Employee has been arrested or indicted in a possible criminal
violation involving fraud or dishonesty;

        c. after due consideration and with prior written notice to the 
Employee, that Employee has performed poorly;

        d. that Employee has failed or refused to perform Employee's duties set
forth in paragraph 6 hereof, or willfully failed to execute any reasonable
instruction relating to Employee's duties with Company given him by the Board
of Directors of  Company, or the Chief Executive Officer of Lincoln, if either
such failure or refusal is not corrected within ten (10) business days after
Employee's receipt of written notification of such failure or refusal; or

        e. that Employee has intentionally and in bad faith acted in a manner
which results in a material detriment to the assets, business or prospects of
Lincoln,  Company or the subsidiaries or affiliates of either of them.

     6. Responsibilities.  During the period of Employee's employment, Employee
shall devote Employee's entire business time and attention, except during
reasonable vacation periods, to, and exert Employee's best efforts to promote,
the affairs of  Company, and shall render such services to Company as may be
required by the Board of Directors of Company consistent with services required
by virtue of the office set forth in paragraph 1 hereof and shall perform such
other services as may now or hereafter be specified or enumerated in the
By-Laws of Company consistent with such office.  While employed by Company,
Employee shall not, directly or indirectly, alone or as a member of a
partnership or association, or as an officer, director, advisor, consultant,
agent or employee of any other company, be engaged in or concerned with any
other duties or pursuits requiring Employee's personal services except with the
prior written consent of the Board of Directors of Company.  Nothing herein
contained shall preclude the ownership by Employee of stocks or other
investment securities.  Nothing herein contained shall preclude service by
Employee on boards of directors or


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trustees of charitable or other not-for-profit entities not engaged in any
business competitive with the business of Company so long as such service does
not materially interfere with Employee's responsibilities to Company.

     7. Compensation.  During the Employment Period, Employee shall receive a
base salary that shall be at an annual rate of not less than $565,000 payable
in accordance with the payroll practices of Company as from time to time in
effect with regard to executive personnel.

     8. Benefit Plans and Programs.  During the Employment Period, Employee
shall be eligible for participation in all benefit plans and programs made
available by  Company to its employees generally (other than Company's
generally available severance program) and in those benefit plans and programs
applicable to executives of the Employee's level to the extent Employee is not
eligible for comparable benefits from Lincoln.

The bonus payable by Company for periods which include the Employment Period
will be payable under the terms of Company's Executive Performance Incentive
Compensation Plan ("EPIC").  Employee's performance goals and target and
maximum awards are set out in Exhibit A.  To the extent an EPIC bonus is
payable in the form of stock, phantom stock, or stock units, it shall be
awarded and payable in the form of (or, in the case of phantom stock or stock
units, measured by reference to) Common Stock of Company.

Employee shall be entitled through March 31, 1998 to the benefit of Company's
standard relocation package for executives at Employee's level.

     9. Stock Options and Restricted Stock Awards.  Among the benefit plans and
programs to be made available by Company to certain of its employees is
Company's Stock Option Plan.  Any options granted to Employee shall be options
for Company Common Stock at the appropriate level for his position.

     10. Payments after Termination.  If Employee's employment with Company
terminates at the end of the Employment Period referred to in Section 2 hereof
for reasons other than incapacity or death or Cause,  Employee shall be
entitled to all the following upon execution of a release satisfactory to
Company and Lincoln ("Release"):

         a. Company shall pay to the Employee $600,000 in 26 equal biweekly 
installments;

         b.   Employee shall become entitled to EPIC bonus payments as set out 
on Exhibit A;



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         c. Employee shall be entitled to receive an early retirement benefit 
without adjustment for Employee's age;

         d. Employee shall be entitled to outplacement benefits through Right &
Associates' standard program for executives or a similar firm approved by
Company; and

         e. Employee shall be entitled to executive financial planning 
benefits for calendar year 1998.

In the event that Employee's employment terminates prior to the end of the
Employment Period due to death or disability, the amounts specified in
subsections a, b and c above shall still be payable.  If Employee's employment
terminates during the Employment Period for the reasons specified in Section
5c, upon execution of a Release, Employee shall be entitled to receive $285,000
in 26 equal biweekly installments and the benefit specified in subsection c
above shall also be payable.  If Employee's employment terminates during the
Employment Period for the reasons specified in Section 5b, upon execution of a
Release, the Employee shall be entitled to receive $285,000 in 26 equal
biweekly installments.  The amounts provided under subsections b and c above
shall be payable only if the indictment or charges are dismissed or Employee is
acquitted as a result of a trial.

     11. Expenses.  During the Employment Period, Company shall allow Employee
reasonable expense of travel and business entertainment incurred in the
performance of Employee's duties hereunder, subject to the rules and
regulations adopted by Company for the handling of such business expenses.

     12. Other Obligations of Employee.  All payments to the Employee provided
for under Section 10 of this Agreement or under the Executive Salary
Continuation Plan of Company, the exercise of any options for stock of Company
and the vesting or payment of any restricted stock (or restricted phantom stock
or restricted stock units) of  Company or Lincoln shall be subject, to the
extent permitted by law, to Employee's compliance with the following
provisions.  (For purposes of this Section, Company and Lincoln shall be deemed
to include their affiliates and subsidiaries.)

         a. Assistance in Litigation.  At all times during and after the term of
this Agreement, Employee shall, upon reasonable notice, furnish such
information and proper assistance to Company or Lincoln as may reasonably be
required by Company or Lincoln in connection with any litigation in which it
is, or may become, a party.

         b. Confidential Information.   At all times during and after the term 
of this Agreement, Employee shall not knowingly disclose or reveal to any
unauthorized person any trade secret or other confidential information relating
to Company or Lincoln or to any of the businesses operated by them.  Employee
acknowledges, understands and agrees that any amounts payable under this
Agreement that have not been paid


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shall be immediately forfeited in the event Employee divulges or appropriates
to Employee's own use or the use of any other person or organization, except as
otherwise ordered by a court of competent jurisdiction, any secret or
confidential information or knowledge pertaining to the businesses of Company
or Lincoln obtained during Employee's employment with Company or Lincoln.
Employee recognizes and acknowledges that (1) all plans, systems, methods,
designs, programs, procedures, books and records relating to the operations,
practices and personnel of Company or Lincoln (whether instituted or commenced
prior or subsequent to the date Employee was first employed by Company or
Lincoln and whether or not devised, created or initially instituted by Company
or Lincoln) and (2) all other records, documents and information concerning the
business activities, practices and procedures, as they may exist from time to
time, constitute and will constitute secret or confidential information or
knowledge pertaining to the businesses of Company or Lincoln.  The information
and material described in this paragraph shall constitute secret or
confidential information or knowledge only to the extent such information and
material has remained confidential (except for unauthorized disclosures) and
except as otherwise ordered by a court of competent jurisdiction.  The
provisions of this Section 12b shall not be construed as prohibiting or
limiting Company or Lincoln from pursuing any other remedies for the divulgence
or appropriation or threatened divulgence or appropriation of secret or
confidential information or knowledge relating to Company or Lincoln.

         c. Non-competition.  During the term of Employee's employment and for a
period of three (3) years following the termination of Employee's employment,
Employee will not act as a director, officer, employee, consultant or advisor
to, nor directly or indirectly become associated with any person, firm, company
or corporation where his activities relate to any business competitive with
Company or Lincoln; provided, however, that this prohibition shall not extend
to the Property Casualty Reinsurance business.  Employee specifically
acknowledges that the geographic region to which this restriction applies is
the same geographic region in which Employee personally was present and
performed services for Lincoln during the past two (2) years.  This restriction
does not prohibit Employee from buying, selling, or otherwise trading in the
securities of any corporation which is listed on any recognized securities
exchange, and he may engage in any other business activities not competitive
with Company or Lincoln.  Neither Company nor Lincoln will object to Employee's
service on the boards of other companies as a Director so long as there is no
conflict with the terms of this subsection or subsection b above or e below.
Employee may request an interpretation by the Chief Executive Officer of
Lincoln of the applicability of this provision to specific activities in which
Employee contemplates engaging.

         d. Non-solicitation.  During the term of Employee's employment and for
a period of three (3) years following the termination of the Employee's
employment, Employee shall not directly or indirectly solicit or endeavor to
entice away from  Company or Lincoln any person who is employed with Company or
Lincoln.


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         e. Change in Control.  During the term of Employee's employment and 
for a period of three (3) years following the termination of Employee's 
employment, Employee agrees that neither he nor any entity directly or 
indirectly controlled by him will directly or indirectly participate in a 
proscribed activity.  A "proscribed activity" shall mean either (1) soliciting 
others to invest in the Common Stock of Lincoln for the purpose of effecting an
acquisition of control of Lincoln or Employee's directly investing in more than
1% of the Common Stock of Lincoln or (2) using confidential information  (as
described in subparagraph b above) to assist any person, entity or group of
persons which intends to or does attempt to effect an acquisition of control of
Lincoln.  The term "Control" shall be defined for purposes of this subparagraph
to have the meaning of control contained in Ind. Code Ann. Sec. 27-1-23-1(e)
(West, 1996).

         f. Consideration and Legal Action.   As consideration for the receipt 
of the amounts payable under this Agreement, Employee acknowledges, understands
and agrees that any such amounts that have not been paid will be immediately
forfeited if Employee breaches any provision of this Section 12 during the term
of Employee's employment and for a period of three (3) years following the
termination of Employee's employment. Employee acknowledges that the
restrictions contained in this Section 12 b, c, d and e are reasonable and
necessary to protect the legitimate interests of Company and Lincoln; and that,
therefore, Company or Lincoln shall be entitled to seek preliminary and
permanent injunctive and other equitable relief (including, without limitation,
and equitable accounting of all earnings, profits and other benefits arising
from such violation) in any court of competent jurisdiction, which rights shall
be cumulative and in addition to any other rights or remedies to which Company
or Lincoln may be entitled.  Employee hereby irrevocably consents to the
personal jurisdiction over him of the courts of the State of Indiana and of any
Federal court located in such state in connection with any action or proceeding
arising out of or relating to this Section 12 or any related breach of this
Agreement involved in such action or proceeding and further agrees, and shall
not contest, that the proper venue for filing and maintaining any such action
or proceeding shall be in the State of Indiana.

     13. Effect of Termination of the Employment Period.  Except as
specifically provided in Sections 2, 10 and 12, this Agreement shall terminate
upon the termination of the Employment Period.  The obligations of the Employee
under Section 12 and the rights and remedies available to Company under that
Section for any breach of such obligations, however, shall in all events
survive.

     14. Notice.  Any notice required to be given by Company hereunder to
Employee shall be in proper form and signed by an Officer or Director of
Company.  Until one party shall advise the other in writing to the contrary,
notices shall be deemed delivered:

         a. to Company if delivered to Lynda Van Kirk, Vice President, with a 
copy to Tom Ober, General Counsel, or, if mailed, certified or registered mail,
postage prepaid, to the above-named individuals at American States Insurance
Company, 500


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North Meridian Street, Indianapolis, IN 46204; and a copy to George Davis,
Senior Vice President, Lincoln National Corporation, 200 East Berry Street,
Fort Wayne, IN 46802.

         b. to Employee if delivered to Employee, or if mailed to him, 
certified or registered mail, postage prepaid, at 3603 West Hamilton Road, 
Fort Wayne, IN 46804.

     15. Alternative Dispute Resolution.  With the exception of actions under
Sections 12b, c, d and e of this Agreement, any controversy, dispute or
questions arising out of, in connection with or in relation to this Agreement
or its interpretation, performance or nonperformance or any breach thereof
shall be resolved through mediation.  In the event mediation fails to resolve
the dispute within sixty (60) days after a mediator has been agreed upon or
such other longer period as may be agreed to by the parties, such controversy,
dispute or question shall be settled by arbitration in accordance with the
Center for Public Resources Rules for Non-Administered Arbitration of Business
Disputes, by a sole arbitrator.  The arbitrator shall be governed by the United
States Arbitration Act, 9 U.S.C. Sec. 1-16, and judgment upon the award
rendered by the arbitrator may be entered by any court having jurisdiction
thereof.  The place of the arbitration shall be Indianapolis, Indiana.  In any
such controversy or dispute, regardless of the party by whom such controversy
or dispute is initiated,  Company shall, if written notice is given and upon
presentation of appropriate vouchers, pay all legal expenses, including
reasonable attorneys' fees, court costs and ordinary and necessary
out-of-pocket costs of attorneys, billed to and payable by the Employee in
connection with the bringing, prosecuting, defending, litigating, negotiating,
or settling such controversy or dispute; provided, however, that such expenses,
fees and costs shall not be paid by Company unless and until the Employee is
successful on the merits; further provided, however, that in the event such
controversy or dispute is settled, the settlement agreement shall provide for
the allocation of such expenses, fees and costs between the parties.

     16. Benefit.   This Agreement shall bind and inure to the benefit of
Company and the Employee, their respective heirs, successors and assigns.

     17. Conditions.   This Agreement is effective upon the approval of the
Agreement by the non-interested members of the Board of Directors of Company or
its designated compensation committee.  Should the aforementioned conditions
not be satisfied, this Agreement shall become null and void and shall have no
effect whatsoever on any previous agreement, expressed or implied, between
Employee and  Company.

     18. Effect on Previous Agreements.   Should this Agreement become
effective, it will supersede all employment related agreements between Employee
and  Company or Lincoln or their affiliates or subsidiaries.



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     19. Amendments. This Agreement may only be amended by the written
agreement of Employee and Company with the written approval of Lincoln.

     20. Severability.  In case any part of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.  In lieu of any such illegal, invalid or unenforceable provision,
there automatically will be added as part of this Agreement a legal, valid and
enforceable provision as similar in terms and intent to such illegal, invalid
or unenforceable provision as possible.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                      American States Financial Corporation

                                      By:  /s/ William J. Lawson
                                           -----------------------------
                                      Name:    William J. Lawson
                                            ----------------------------
                                      Title:  President & COO
                                              --------------------------

                                      Employee

                                      By:  /s/ Robert A. Anker
                                           -----------------------------
                                      Name:    Robert A. Anker
                                            ----------------------------
                                      Title:  Chairman & CEO
                                              --------------------------







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                                   EXHIBIT A

               Executive Performance Incentive Compensation Plan


     Performance         Threshold             Target                 Maximum
        Cycle
     -----------         ---------             ------                 -------
      1996-1997          $174,825             $436,230                $765,900




These numbers were established taking into account Employee's actual Employment
Period with Company during the Performance Cycle.

If employment terminates as set out in Section 10, Employee shall be entitled
to receive a pro rata award for the 1997-1999 EPIC cycle.





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