UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  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 MARCH 31, 1998
                         Commission file number 1-0557


                     POLICY MANAGEMENT SYSTEMS CORPORATION
            (Exact name of registrant as specified in its charter)


       SOUTH CAROLINA                             57-0723125
(State or other jurisdiction of                  (IRS Employer
incorporation or organization)               Identification No.)


ONE PMSC CENTER (PO BOX TEN)
BLYTHEWOOD, SC (COLUMBIA, SC)                   29016 (29202)
(Address of principal executive                  (Zip Code)
  offices)


Registrant's  telephone  number,  including  area  code  (803)  333-4000

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

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

         18,393,268 Common shares, $.01 par value, as of May 8, 1998.


     The  information  furnished herein reflects all adjustments which are, in
the  opinion of management, necessary for the fair presentation of the results
for the periods reported.  Such information should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended December 31, 1997.

<PAGE>
<TABLE>
<CAPTION>

                         POLICY MANAGEMENT SYSTEMS CORPORATION

                                           INDEX

PART  I.FINANCIAL  INFORMATION                                              PAGE

<S>                                                                          <C>
Item 1. Financial Statements

Consolidated Statements of Income for the Three Months Ended March 31, 1998 
 and 1997. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997 . . .   4

Consolidated Statements of Changes in Stockholders' Equity and Comprehensive 
 Income for the Three Months Ended March 31, 1998 and 1997 . . . . . . . . .   5

Consolidated Statements of Cash Flows for the Three Months Ended 
 March 31, 1998 and 1997 . . . . . . . . . . . . . . . . . . . . . . . . . .   6

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . .   7

Item 2. Management's Discussion and Analysis of Financial Condition and 
  Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . .  13


PART II. OTHER INFORMATION

Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . .  21

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . .  21

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                    PART I
                             FINANCIAL INFORMATION
                     POLICY MANAGEMENT SYSTEMS CORPORATION
                       CONSOLIDATED STATEMENTS OF INCOME

                                                     Three Months
                                                    Ended March 31,
                                                   1998         1997
                                                     (Unaudited)
----------------------------------------------------------------------
                                         (In Thousands, Except Per Share Data)
<S>                                               <C>        <C>
REVENUES
 Licensing . . . . . . . . . . . . . . . . . . .  $ 28,737   $ 26,230 
 Services. . . . . . . . . . . . . . . . . . . .   111,684     88,853 
                                                  ---------  ---------
                                                   140,421    115,083 
                                                  ---------  ---------
OPERATING EXPENSES
 Cost of revenues
  Employee compensation & benefits . . . . . . .    62,964     47,329 
  Computer and communications expenses . . . . .     8,599      7,834 
  Depreciation and amortization of
   property, equipment and
   capitalized software costs. . . . . . . . . .    15,830     13,832 
  Other costs & expenses . . . . . . . . . . . .     7,032      5,761 
 Selling, general and administrative
   expenses. . . . . . . . . . . . . . . . . . .    22,725     22,112 
 Amortization of goodwill and
   other intangibles . . . . . . . . . . . . . .     2,423      2,472 
                                                  ---------  ---------
                                                   119,573     99,340 
                                                  ---------  ---------

OPERATING INCOME . . . . . . . . . . . . . . . .    20,848     15,743 

Equity in earnings of
   unconsolidated affiliates . . . . . . . . . .       205        370 

Other Income and Expenses
  Investment income. . . . . . . . . . . . . . .       502        427 
  Interest expense and other charges . . . . . .      (927)    (1,217)
                                                  ---------  ---------
                                                      (425)      (790)
                                                  ---------  ---------
Income from continuing operations
  before income taxes. . . . . . . . . . . . . .    20,628     15,323 
Income taxes . . . . . . . . . . . . . . . . . .     7,761      5,718 
                                                  ---------  ---------
INCOME FROM CONTINUING OPERATIONS. . . . . . . .    12,867      9,605 

DISCONTINUED OPERATIONS:
  Income from operations of discontinued
    operations less applicable income
    taxes of $215 and $351, respectively . . . .       322        487 
                                                  ---------  ---------

Net income . . . . . . . . . . . . . . . . . . .  $ 13,189   $ 10,092 
                                                  =========  =========

BASIC EARNINGS PER SHARE:
  Income from continuing operations. . . . . . .  $   0.70   $   0.53 
  Income from discontinued operations. . . . . .      0.02       0.03 
                                                  ---------  ---------
                                                  $   0.72   $   0.56 
                                                  =========  =========

DILUTED EARNINGS PER SHARE:                      
  Income from continuing operations. . . . . . .  $   0.65   $   0.52 
  Income from discontinued operations. . . . . .      0.02       0.03 
                                                  ---------  ---------
                                                  $   0.67   $   0.55 
                                                  =========  =========


Weighted average common shares . . . . . . . . .    18,344     18,179 
Weighted average common shares assuming dilution    19,562     18,400 

<FN>

See  accompanying  notes
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                     POLICY MANAGEMENT SYSTEMS CORPORATION
                          CONSOLIDATED BALANCE SHEETS

                                                 (Unaudited)  (Audited)
                                                  March 31,  December 31,
                                                    1998        1997
                                                  --------    --------
                                      (In Thousands, Except Share Data)
Assets
Current assets
<S>                                                <C>        <C>
 Cash and equivalents                              $ 19,591   $ 32,179 
 Marketable securities                                   20      3,280 
 Receivables, net of allowance for uncollectible
  amounts of $2,441 ($2,628 at 1997)                127,264    128,789 
 Income tax receivable                                1,116      1,098 
 Deferred income taxes                                6,135      3,628 
 Other                                               22,249     16,835 
                                                   ---------  ---------
   Total current assets                             176,375    185,809 

Property and equipment, at cost less accumulated
 depreciation and amortization of $145,847
 ($139,522 at 1997)                                 118,453    116,433 
Receivables                                           2,888      3,271 
Income tax receivable                                 4,041      4,041 
Goodwill and other intangibles, net                  68,179     69,125 
Capitalized software costs, net                     210,898    204,118 
Deferred income taxes                                21,777     21,996 
Investments                                           8,379     11,066 
Other                                                 4,718      2,547 
                                                   ---------  ---------
     Total assets                                  $615,708   $618,406 
                                                   =========  =========

Liabilities
Current liabilities
 Accounts payable and accrued expenses             $ 48,534   $ 57,345 
 Accrued restructuring charges                          124        145 
 Accrued contract termination costs                     619        830 
 Current portion of long-term debt                    5,686      1,191 
 Income taxes payable                                 8,707      7,499 
 Unearned revenues                                   16,525     18,806 
 Other                                                  396        397 
                                                   ---------  ---------
   Total current liabilities                         80,591     86,213 

Long-term debt                                       19,443     37,714 
Deferred income taxes                                86,715     80,496 
Accrued restructuring charges                         1,413      1,366 
Other                                                 3,104      2,121 
                                                   ---------  ---------
    Total liabilities                               191,266    207,910 
                                                   ---------  ---------

Commitments and contingencies (Note 2)

Stockholders' Equity
Special stock, $.01 par value, 5,000,000 shares
 authorized                                               -          - 
Common stock, $.01 par value, 75,000,000 shares
 authorized, 18,398,652 shares issued and
 outstanding (18,339,304 at December 31, 1997)          184        183 
Additional paid-in capital                          113,154    112,090 
Retained earnings                                   319,556    306,367 
Accumulated other comprehensive income               (8,452)    (8,144)
                                                   ---------  ---------
    Total stockholders' equity                      424,442    410,496 
                                                   ---------  ---------
     Total liabilities and stockholders' equity    $615,708   $618,406 
                                                   =========  =========
<FN>

See accompanying notes
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                     POLICY MANAGEMENT SYSTEMS CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                                  (Unaudited)

                                                          Accumulated
                                     Additional              Other
                              Common  Paid-In   Retained Comprehensive
                               Stock  Capital   Earnings     Income    Total
-------------------------------------------------------------------------------
                                              (Dollars In Thousands)

<S>                             <C>    <C>        <C>       <C>       <C>
BALANCE, DECEMBER 31, 1996 . .  $182   $106,104   $256,110  $   856   $363,252 

Net income . . . . . . . . . .     -          -     10,092        -     10,092 
Other comprehensive income,
  net of tax:
    Foreign currency
      translation adjustment .     -          -          -   (2,727)    (2,727)
    Unrealized gain (loss) on
      marketable securities. .     -          -          -        1          1 
Stock options exercised
  (215 shares) . . . . . . . .     -          7          -        -          7 
                                -----  ---------  --------  --------  ---------

BALANCE, MARCH 31, 1997. . . .  $182   $106,111   $266,202  $(1,870)  $370,625 
                                =====  =========  ========  ========  =========


BALANCE, DECEMBER 31, 1997 . .  $183   $112,090   $306,367  $(8,144)  $410,496 

Net income . . . . . . . . . .     -          -     13,189        -     13,189 
Other comprehensive income,
  net of tax:
    Foreign currency
      translation adjustment .     -          -          -     (300)      (300)
    Unrealized gain (loss) on
      marketable securities. .     -          -          -       (8)        (8)
Stock options exercised
  (205,748 shares) . . . . . .     2     11,023          -        -     11,025 
Repurchase of 146,400 shares
  of common stock. . . . . . .    (1)    (9,959)         -        -     (9,960)
                                -----  ---------  --------  --------  ---------

BALANCE, MARCH 31, 1998. . . .  $184   $113,154   $319,556  $(8,452)  $424,442 
                                =====  =========  ========  ========  =========

<FN>

See accompanying notes
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                     POLICY MANAGEMENT SYSTEMS CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                                       Three Months
                                                      Ended March 31,
                                                     1998        1997
                                                   --------    --------
                                                      (In Thousands)
Operating  Activities
<S>                                                <C>        <C>
 Net income                                        $ 13,189   $ 10,092 
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                     19,718     17,530 
   Deferred income taxes                              3,264        320 
   Provision for uncollectible accounts                   -        742 
   Impairment and restructuring charges                   -        444 
 Changes in assets and liabilities:
   Accrued restructuring and lease
    termination costs                                    26     (1,170)
   Receivables                                        2,102     (4,133)
   Income taxes receivable                              (18)        27 
   Accounts payable and accrued expenses             (9,155)   (10,849)
   Income taxes payable                               1,208      3,618 
 Other, net                                          (9,522)     1,009 
                                                   ---------  ---------
      Cash provided by operations                    20,812     17,630 
                                                   ---------  ---------

Investing Activities
 Proceeds from sales/maturities of available-for-
  sale securities                                     3,257        250 
 Proceeds from sales of held-to-
  maturity securities                                 2,969          - 
 Acquisition of property and equipment               (9,244)    (7,717)
 Capitalized internal software development
  costs                                             (14,880)   (14,368)
 Business acquisition                                (2,688)         - 
 Proceeds from disposal of property and
  equipment                                             200        130 
                                                   ---------  ---------
      Cash used by investing activities             (20,386)   (21,705)
                                                   ---------  ---------

Financing Activities
 Payments on long-term debt                         (18,271)   (23,456)
 Proceeds from borrowing under credit facility        4,495     15,238 
 Issuance of common stock under stock
  option plans                                       11,025          7 
Repurchase of common stock                           (9,960)         - 
                                                   ---------  ---------
      Cash used by financing activities             (12,711)    (8,211)
                                                   ---------  ---------

Effect of exchange rate changes on cash                (303)       158 
Net decrease in cash and equivalents                (12,588)   (12,128)
Cash and equivalents at beginning of period          32,179     22,121 
                                                   ---------  ---------
Cash and equivalents at end of period              $ 19,591   $  9,993 
                                                   =========  =========

Supplemental Information
 Interest paid                                     $  1,058   $  1,182 
 Income taxes paid                                    1,123      1,305 

<FN>

See  accompanying  notes
</TABLE>

<PAGE>
                     POLICY MANAGEMENT SYSTEMS CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                MARCH 31, 1998


NOTE  1.          SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

BASIS  OF  PRESENTATION

     The  consolidated  financial  statements  of  Policy  Management  Systems
Corporation  (the  "Company")  have been prepared in accordance with the rules
and  regulations of the Securities and Exchange Commission (the "SEC").  These
consolidated  financial  statements  include  estimates  and  assumptions that
affect  the  reported  amounts  of  assets  and  liabilities,  disclosure  of
contingent  assets  and  liabilities and the amounts of revenues and expenses.
Actual  results  could  differ  from  those  estimated.    In  the  opinion of
management,  these  statements  include  all  adjustments necessary for a fair
presentation  of  the  results  of  all  interim  periods reported herein. All
adjustments  are  of  a  normal  recurring  nature unless otherwise disclosed.
Certain  information  and  footnote  disclosures  prepared  in accordance with
generally accepted accounting principles have been either condensed or omitted
pursuant  to SEC rules and regulations.  However, management believes that the
disclosures  made  are  adequate  for  a  fair  presentation  of  results  of
operations,  financial  position and cash flows.  These consolidated financial
statements  should  be  read  in  conjunction  with the consolidated financial
statements  and  accompanying  notes  included  in the Company's latest annual
report  on  Form  10-K.

BASIC AND DILUTED EARNINGS PER SHARE

     Basic  and diluted earnings per share ("EPS") are calculated according to
the  provisions  of  Statement  of  Financial  Accounting  Standards  No. 128,
"Earnings  Per  Share".    For  the Company, the numerator is the same for the
calculation  of both basic and diluted EPS.  The following is a reconciliation
of  the  denominator  used  in  the  EPS  calculations  (in  thousands):
<TABLE>
<CAPTION>
                                   Three Months
                                  Ended March 31,
                                  --------------
                                   1998   1997  
                                  ------ -------
Weighted Average Shares
-----------------------
<S>                              <C>     <C>
Basic EPS. . . . . . . . . . . .  18,344  18,179
Effect of common stock options .   1,218     221
                                  ------  ------
Diluted EPS. . . . . . . . . . .  19,562  18,400
                                  ======  ======
</TABLE>

     Options  to  purchase 17,550 and 375,000 shares of common stock at $78.94
and  $81.90 per share, respectively, were outstanding but were not included in
the  computation  of diluted EPS for 1998 because the options' exercise prices
were  greater than the average market price for the Company's common stock for
the  period.

<PAGE>
NEW  ACCOUNTING  STANDARDS

     In  June  1997,  Statement  of  Financial  Accounting  Standards No. 130,
"Reporting  Comprehensive  Income"  ("SFAS  130"),  was  issued.    SFAS  130
establishes  standards  for  reporting and display of comprehensive income and
its components, and is effective for fiscal years beginning after December 15,
1997.    The  Company adopted SFAS 130 at January 1, 1998 and has included the
appropriate  disclosures  in  the  Consolidated  Statements  of  Changes  in
Stockholders'  Equity  and  Comprehensive  Income.

     In  October  1997, the American Institute of Certified Public Accountants
issued  Statement  of  Position  97-2,  "Software  Revenue  Recognition" ("SOP
97-2").   SOP 97-2 provides guidance on applying generally accepted accounting
principles  in  recognizing revenue on software transactions, and is effective
for  transactions  entered  into  in fiscal years beginning after December 31,
1997.   The Company adopted SOP 97-2 at January 1, 1998.  The adoption did not
have  a  material  impact  on  the  Company's  financial  statements.

     In  February 1998, the American Institute of Certified Public Accountants
issued  Statement  of  Position  98-1,  "Accounting  for the Costs of Computer
Software  Developed  or  Obtained  for  Internal  Use" ("SOP 98-1").  SOP 98-1
provides  guidance  on accounting for the costs of computer software developed
or  obtained  for  internal  use,  and is effective for fiscal years beginning
after  December  31,  1998,  with  earlier  adoption  encouraged.  The Company
adopted  SOP  98-1  at  January 1, 1998.  The adoption did not have a material
effect  on  the  Company's  financial  statements.

OTHER  MATTERS

     Certain  prior  year amounts have been reclassified to conform to current
year  presentation.


NOTE  2.          CONTINGENCIES

     In  March 1994, Security Life of Denver Insurance Company ("SLD") brought
suit  against the Company in the United States District Court for the District
of  Colorado  alleging  breach of a life insurance joint development contract,
unfair trade practices, and fraud. SLD sought direct, indirect, consequential,
and  punitive damages in excess of $80 million.  In February 1997, following a
jury  trial,  the  Court  and  jury  entered  judgment in favor of the Company
against  SLD on the claims of fraud and unfair trade practices.  A verdict and
judgment  was  returned against the Company for breach of contract and damages
of  $3.5  million, together with pre-judgment interest.  In addition, the jury
found that SLD was using the Company's trade secrets without permission.  As a
result  of post trial motions, the judgment was amended to delete the award of
pre-judgment  interest  and  SLD  was ordered to return the Company's systems.
Both  the Company and SLD have appealed to the United States Court of Appeals.
Changes  in  the  status  of  this  proceeding could result in a change in the
Company's  estimate  of  anticipated  liability  for the costs associated with
these  matters.

<PAGE>
     The Company is also presently involved  in  litigation which commenced in
January  of  1996  in  the Circuit Court in Greenville County, South Carolina,
with  Liberty Life Insurance Company and certain of its affiliates ("Liberty")
arising  out  of  the  parties'  prior contractual relationship related to the
development  and  licensing  of  Series  III  life  insurance  systems and the
subsequent  licensing  of  the  Company's  CYBERTEK  life  insurance  systems.
Liberty's  complaint alleges breach of contract, breach of express and implied
warranties,  fraudulent  inducement,  breach  of  contract  accompanied  by  a
fraudulent  act,  and recission.  Liberty has alleged actual and consequential
damages  in excess of $160 million and also seeks treble and punitive damages.
The  Company  has  asserted  various  affirmative  defenses  and  is  pursuing
counterclaims  against  Liberty  for breach of contract, recoupment, breach of
good  faith  and  fair  dealing,  and  breach  of  contract  accompanied  by a
fraudulent act.  The Company is seeking equitable relief, including injunctive
relief,  and  currently  unspecified  actual,  compensatory  and consequential
damages.

     Based upon the allegations raised in a prior lawsuit and the SLD lawsuit,
the  Company's  insurer,  St.  Paul  Mercury  Insurance  Company ("St. Paul"),
commenced  in  June  1995  a  declaratory judgment action in the United States
District  Court  for  the  District  of  South Carolina against the Company to
determine St. Paul's obligation for defense costs and to indemnify the Company
for  any  payment  related  to these claims.  The Company filed a counterclaim
against  St.  Paul  seeking  to  recover  the  Company's defense costs in both
matters,  coverage  for  damages,  if  any,  awarded  in  those  matters,  and
consequential  and  punitive  damages.

     In  connection  with the dismissal of the prior lawsuit, St. Paul and the
Company  agreed  to  dismiss with prejudice all claims against each other with
respect  to  the  matter, and St. Paul agreed to reimburse the Company for the
Company's  legal fees.  The action continues as to the parties' claims related
to  insurance  coverage  for  the  SLD  matter.

     In  addition  to  the  litigation described above, there are also various
other  litigation  proceedings  and  claims  arising in the ordinary course of
business.  The  Company believes it has meritorious defenses and is vigorously
defending  these  matters.

     While  the  resolution  of any of the above matters could have a material
adverse  effect  on  the  results of operations in future periods, the Company
does  not  expect  these  matters  to  have  a  material adverse effect on its
consolidated  financial  position.  The Company, however, is unable to predict
the  ultimate  outcome  or  the  potential  financial impact of these matters.

<PAGE>
NOTE  3.          SEGMENT  INFORMATION

     The  Company's  operating  segments  are  the  five  revenue-producing
components of the Company for which separate financial information is produced
for  internal  decision  making  and  planning  purposes.  The segments are as
follows:

1.  Property and casualty enterprise software and services (generally referred
to  as  the "domestic property and casualty business").  This segment provides
software  products,  product  support,  professional  services and outsourcing
primarily  to  the  US  property  and  casualty  insurance  market.

2.  Life  and  financial solutions enterprise software and services (generally
referred  to  as  the "domestic life and financial solutions business").  This
segment provides software products, product support, professional services and
outsourcing  primarily to the US life insurance and related financial services
markets.

3.  International.   This segment provides software products, product support,
professional  services,  outsourcing  and information services to the property
and  casualty and life insurance markets primarily in Canada, Europe, Asia and
Australia.

4.  Property  and  casualty  information  services.    This  segment  provided
information  services, principally motor vehicle records and claims histories,
to  US  property  and casualty insurers.  This segment was sold in August 1997
and  is  presented  as  a  discontinued  operation.

5.  Life  information  services.   This segment provides information services,
principally physician reports and medical histories, to US life insurers. This
segment  is  in  the  process of being sold and is presented as a discontinued
operation.

<PAGE>
Information  about  the  Company's operations for the three months ended March
31,  1998  and  1997  is  as  follows:
<TABLE>
<CAPTION>
                                                Three Months
                                               Ended March 31,
                                             -------------------
                                               1998       1997
                                             --------   --------
                                                (In thousands)
REVENUES FROM EXTERNAL CUSTOMERS
<S>                                          <C>        <C>
 Enterprise software and services
  Property and casualty . . . . . . . . . .  $ 67,951   $ 56,274 
  Life and financial solutions. . . . . . .    30,425     20,155 
                                             ---------  ---------
    Total US revenues . . . . . . . . . . .    98,376     76,429 
  International . . . . . . . . . . . . . .    42,045     38,654 
                                             ---------  ---------
    Total revenues from
       continuing operations. . . . . . . .  $140,421   $115,083 
                                             =========  =========

 Discontinued Operations
  Information Services
   Property and casualty. . . . . . . . . .  $      -   $ 24,069 
   Life . . . . . . . . . . . . . . . . . .     7,125     16,104 

INCOME (EXPENSE) FROM CONTINUING OPERATIONS
 Enterprise software and services
  Property and casualty . . . . . . . . . .  $ 17,460   $ 15,517 
  Life and financial solutions. . . . . . .     6,879      3,918 
  Corporate and US administrative . . . . .    (6,491)    (4,730)
                                             ---------  ---------
    Total US operating income . . . . . . .    17,848     14,705 
                                             ---------  ---------

  International . . . . . . . . . . . . . .     4,962      2,534 
  International administrative. . . . . . .    (1,962)    (1,496)
                                             ---------  ---------
    Total international . . . . . . . . . .     3,000      1,038 
                                             ---------  ---------
      Operating income. . . . . . . . . . .    20,848     15,743 
                                             ---------  ---------

Equity in earnings of
  unconsolidated affiliates . . . . . . . .       205        370 
Other income and expenses . . . . . . . . .      (425)      (790)
Income taxes. . . . . . . . . . . . . . . .     7,761      5,718 
                                             ---------  ---------
  Income from continuing operations . . . .  $ 12,867   $  9,605 
                                             =========  =========

DISCONTINUED OPERATIONS
 Information Services
  Property and casualty . . . . . . . . . .  $      -   $    274 
  Life. . . . . . . . . . . . . . . . . . .       560        564 
  Other income and expenses . . . . . . . .       (23)         - 
  Income taxes. . . . . . . . . . . . . . .       215        351 
                                             ---------  ---------
   Discontinued operations, net . . . . . .  $    322   $    487 
                                             =========  =========
</TABLE>

<PAGE>

NOTE 4.     DISCONTINUED OPERATIONS

     The  Company  has  signed  a  definitive  agreement  to  sell  its  life
information  services  business  segment.   This transaction is expected to be
concluded  in  the  second quarter of 1998 and the Company does not anticipate
any  material  gain  or loss.  The operations of this segment are presented as
discontinued  operations  in  the  accompanying  Consolidated  Statement  of
Operations.    The  following  is  a description of the estimated assets to be
disposed  of  (in  thousands):

<TABLE>
<CAPTION>
                                                  March 31,
                                                    1998
                                                   ------
Current assets
<S>                                               <C>
 Receivables, net of allowance for uncollectible
   amounts of $39. . . . . . . . . . . . . . . .  $ 6,908
 Other . . . . . . . . . . . . . . . . . . . . .    1,735
                                                  -------
                                                    8,643
Property and equipment, at cost less accumulated
   depreciation and amortization of $7,987 . . .    5,000
Goodwill and other intangibles, net. . . . . . .    5,166
Capitalized software costs, net. . . . . . . . .    1,272
Other. . . . . . . . . . . . . . . . . . . . . .       58
                                                  -------
  Total assets . . . . . . . . . . . . . . . . .  $20,139
                                                  =======
</TABLE>

<PAGE>
                     POLICY MANAGEMENT SYSTEMS CORPORATION
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The  following  discussion  and  analysis   provides   information  which
management  believes  is  relevant  to  an assessment and understanding of the
Company's  consolidated  results  of  operations and financial condition.  The
discussion  should  be  read  in  conjunction  with the consolidated financial
statements  and  notes thereto contained in Part I of this report on Form 10-Q
and  with the Company's Annual Report on Form 10-K for the year ended December
31,  1997.

                             RESULTS OF OPERATIONS

     Set  forth below are certain operating items expressed as a percentage of
revenues  and  the  percent  increase  (decrease)  for those items between the
periods  presented:
<TABLE>
<CAPTION>
                                                           1998 vs. 1997
                                                              Percent
                                 Percentage of Revenues Increase (Decrease)
                                 ---------------------- ------------------
                                          Three               Three
                                       Months Ended           Months
                                        March 31,             Ended
                                      -------------
                                       1998    1997          March 31
                                      -----   -----         ----------
<S>                                   <C>     <C>             <C>
Revenues
 Licensing . . . . . . . . . . . . .   20.5%   22.8%           9.6%
 Services. . . . . . . . . . . . . .   79.5    77.2           25.7 
                                      ------  ------        
                                      100.0   100.0           22.0 
Operating expenses
 Cost of revenues
  Employee compensation and benefits   44.9    41.1           33.0 
  Computer & communication expenses.    6.1     6.8            9.8 
  Depreciation & amortization
   of property, equipment &
   capitalized software costs. . . .   11.3    12.0           14.4 
  Other costs & expenses . . . . . .    5.0     5.0           22.1 
 Selling, general &
   administrative expenses . . . . .   16.2    19.2            2.8 
 Amortization of goodwill and
   other intangibles . . . . . . . .    1.7     2.2           (2.0)
                                      ------  ------        
                                       85.2    86.3            20.4 
Operating income . . . . . . . . . .   14.8    13.7            32.4 
Equity in earnings of unconsolidated
   affiliates. . . . . . . . . . . .    0.2     0.4           (44.6)
Other income and expenses. . . . . .   (0.3)   (0.7)          (46.2)
                                      ------  ------        
Income from continuing operations
  before income taxes. . . . . . . .   14.7    13.4            34.6 
Income taxes . . . . . . . . . . . .    5.5     5.0            35.7 
                                      ------  ------        
Income from continuing operations. .    9.2     8.4            34.0 
Discontinued operations, net . . . .    0.2     0.4           (33.9)
                                      ------  ------        
Net income . . . . . . . . . . . . .    9.4%    8.8%           30.7%
                                      ======  ======        
</TABLE>

<PAGE>

REVENUES
                                    Three Months
                                   Ended March 31,
                                 ------------------
  Licensing                        1998       1997      Change
                                 -------    -------     ------
                                (Dollars in Millions)
Initial charges . . . . . . . .  $  12.6    $  11.3       11.6%
Monthly charges . . . . . . . .     16.1       14.9        8.0
                                 --------   --------     ------
                                 $  28.7    $  26.2        9.6%
                                 =======    =======      ======

Percentage of total revenues . .   20.5%      22.8%
                                 -------    -------

     Initial license revenues increased $1.3 million from the first quarter of
1997  to  the first quarter of 1998, with the following increases or decreases
by  business segment:  domestic property and casualty up 77.5% ($2.3 million);
life  insurance  and  financial  solutions  down  21.7%  ($0.9  million);  and
international  down  2.2%  ($0.1  million).

     Initial  license  charges  for  the  first  quarter  of  1998  include
right-to-use  licenses  of  $4.9 million.  The right-to-use licenses represent
acquisitions  by certain customers of perpetual rights.  This compares to $1.0
million  in  right-to-use  licenses  for  the  same  period  of  1997.

     Monthly  license charges increased $1.2 million from the first quarter of
1997  to  the  first  quarter of 1998 with the following increases by business
segment:    domestic  property  and  casualty  up  2.1%  ($0.2  million); life
insurance  and  financial solutions up 23.7% ($0.6 million); and international
up  11.1%  ($0.4  million).    These  increases are related to the increase in
licensing  activity  over  the  last  several  quarters.

     Because  a significant portion of initial licensing revenues are recorded
at  the  time  new  systems  are licensed and such licensing activity can vary
dramatically from quarter to quarter, there can be significant fluctuations in
revenue  from  quarter to quarter.  Set forth below is a comparison of initial
license  revenues  for  the  last  eight quarters expressed as a percentage of
total  revenues  for  each  of  the  periods  presented:


                          1998            1997                     1996
                         ----- --------------------------- -------------------
                          1st    4th    3rd    2nd    1st   4th    3rd    2nd
                         ----- --------------------------- -------------------
                                         (Dollars in Millions)

Initial license revenues  $12.6  $25.1  $16.9  $16.6  $11.3  $19.4  $10.0 $12.0
% of total revenues         9.0%  17.0%  12.8%  13.4%   9.8%  15.5%   9.3% 12.4%

<PAGE>
                                   Three Months
                                  Ended March 31,
                                 -----------------
  Services                        1998       1997       Change
                                 ------    -------     ------
                                (Dollars In Millions)
Professional and outsourcing . . $110.8     $ 87.2       27.1%
Information. . . . . . . . . . .    0.1        0.2      (29.4)
Other. . . . . . . . . . . . . .    0.8        1.5      (49.2)
                                 ------     ------     ------
                                 $111.7     $ 88.9       25.7%
                                 ======     ======     =======

Percentage of total revenues . .  79.5%      77.2%
                                 ------     ------

     Professional  and  outsourcing  services revenues increased $23.6 million
from  the  first  quarter  of  1997  to  the  first  quarter of 1998, with the
following  increases  by  business segment:  domestic property and casualty up
22.7%  ($9.8  million); life insurance and financial solutions up 78.0% ($10.5
million);  and  international  up  10.9%  ($3.3  million).   The increases are
principally  due to increases in implementation services and in the processing
volumes  of  services  provided  to  new  and  existing  customers.


OPERATING  EXPENSES

COST  OF  REVENUES

     Employee  compensation and benefits increased 33.0% for the first quarter
1998  compared  with  the  first  quarter  of  1997, principally the result of
increased salaries and related costs associated with the growth in staffing in
professional  services  business  units.  Compensation  and benefits increased
24.8%  ($3.7  million)  internationally, while domestic increased 36.9% ($11.9
million).

     Computer and communications expenses increased 9.8% for the first quarter
1998  compared  with  the  first  quarter  of 1997, principally as a result of
increased  communications,  data circuit and maintenance costs associated with
the  growth  of the Company's domestic and international professional services
operations.

     Depreciation  and  amortization  of  property,  equipment and capitalized
software  costs  increased  14.4% for the first quarter 1998 compared with the
first  quarter  of  1997,  principally  due  to  higher  amortization  expense
resulting  from the recent release of the Company's S3+  property and casualty
insurance  client/server  software systems.  In addition, depreciation expense
increased  due  to  the  Company's  increased  investment  in  its information
technology  equipment  and  expanded  facilities  costs.

     Other  operating costs and expenses increased 22.1% for the first quarter
1998  compared  with  the  first  quarter of 1997 principally due to increased
facility  and  travel  costs.

<PAGE>
SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling,  general  and  administrative  expenses  remained  relatively
unchanged.

AMORTIZATION  OF  GOODWILL  AND  OTHER  INTANGIBLES

     Amortization  of  goodwill  and  other  intangibles  remained  relatively
unchanged.


STRATEGIC  ALLIANCES

     Microsoft.    In  April  1998,  the  Company  announced  a  new strategic
business  alliance with Microsoft Corporation.  Under this strategic alliance,
the  Company  and  Microsoft  will  engage  in  joint  development,  sales and
marketing  activities  geared  toward  the  insurance  and  related  financial
services  industries.    This  alliance  is  not  exclusive.

     Lockheed  Martin.    In March 1998, the Company announced an agreement in
principle  to  form a strategic alliance with Integrated Business Solutions, a
unit  of  Lockheed  Martin  Corporation ("Lockheed").  Under the terms of this
agreement  the  Company  will  turn  over  operation  of its Blythewood, South
Carolina,  data  center  to  Lockheed in the third quarter of 1998.  The exact
terms  and  conditions  of  the  agreement  continue  to  be  negotiated.  The
consolidated  financial  statements contained herein do not include any effect
of  this  agreement.


OPERATING  INCOME

     First  quarter  1998  operating  income increased 32.4% compared with the
1997  first  quarter.    Property  and  casualty  insurance  operating  income
increased  12.5%, domestic life insurance operating income increased 75.6% and
international  operating  income  increased  95.7%.  The increase in operating
income  is  primarily  related  to  increases  in  professional  services  and
outsourcing  revenues.


OTHER  INCOME  AND  EXPENSE

     Interest expense decreased 23.8% for the first quarter 1998 compared with
the  first  quarter of 1997, principally due to lower levels of borrowed funds
under  the  Company's  credit  facility.    The  average nominal interest rate
applicable  to borrowings under the Company's credit facility during the first
quarter  of  1998  was  5.9%.


INCOME  TAXES

     The  effective income tax rate (income taxes expressed as a percentage of
pre-tax  income) was 37.7% and 37.6% for the three months ended March 31, 1998
and  1997, respectively.  The effective rate for the first quarter of 1998 is 
<PAGE>
higher  than the federal statutory rate principally due to the effect of state
and  local  income  taxes.


DISCONTINUED  OPERATIONS

     Income from operations of the discontinued operations decreased 33.9% for
the  first  quarter  1998 compared with the first quarter of 1997, principally
due  to  1997  results  including  the  discontinued  property   and  casualty
information  services  segment,  which was sold in August 1997, as well as the
discontinued  life  information  services  business.  1998 results include the
discontinued  life  information  services  segment  only.


                        LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
                               March 31, December 31,
                                 1998       1997
--------------------------------------------------
                             (Dollars in Millions)
<S>                               <C>     <C>
Cash and equivalents, marketable
  securities, and investments. .  $ 28.0   $ 46.5
Current assets . . . . . . . . .   176.4    185.8
Current liabilities. . . . . . .    80.6     86.2
Working capital. . . . . . . . .    95.8     99.6
Long-term debt . . . . . . . . .    19.4     37.7
</TABLE>


<TABLE>
<CAPTION>
                                       Three Months Ended
                                            March 31,
                                          1998     1997
---------------------------------------------------------
                                    (Dollars in Millions)
<S>                                    <C>      <C>
Cash provided by operations . . . . . . $ 20.8   $ 17.6 
Cash used for investing activities. . .  (20.4)   (21.7)
Cash used for financing activities. . .  (12.7)    (8.2)
</TABLE>


     The   Company's  current   ratio  (current  assets  divided   by  current
liabilities)  stood  at  2.2  at  March 31, 1998, which management believes is
sufficient  when  combined  with  the available credit facility to provide for
day-to-day operating needs and the flexibility to take advantage of investment
opportunities.  The Company has available (net of amounts outstanding at March
31,  1998)  $181  million  under  its $200 million credit facility.  Also, the
Company  has  available  (net  of amounts outstanding at March 31, 1998) $10.5
million  under its $15 million uncommitted operating line of credit with which
it  may  choose  to  fund  temporary  operating  cash  needs.

     During  the  three  months  ended  March 31, 1998 the Company capitalized
software  development  costs  of  $14.9  million,  principally  related to the
development of its S3+ client/server property and casualty software, CyberLife
object-oriented  client/server  life  insurance  software,  and  
<PAGE>
INSURE/90   international  property  and  casualty  solution as well as other
ongoing  projects  for  other  domestic  as  well  as  international products.

     Significant expenditures anticipated for the remainder of 1998, excluding
any  possible  business  acquisitions  or  common  stock  repurchases,  are as
follows:  acquisition of data processing and communications equipment, support
software,  buildings, building improvements and office furniture, fixtures and
equipment  and costs relating to the internal development of software systems.

     The  Company has historically used the cash generated from operations for
development  and  acquisition  of  new products, acquisition of businesses and
repurchase  of  the Company's stock.  The Company anticipates that, subject to
market  conditions, it will continue to use its cash for all of these purposes
in  the  future  and  that projected cash from operations will be able to meet
presently  anticipated needs; however, the Company may also consider incurring
debt, as discussed above, as needed to accomplish specific objectives in these
areas  and  for  other  general  corporate  purposes.


                    FACTORS THAT MAY AFFECT FUTURE RESULTS

     The  Company's  operating results and financial condition can be impacted
by  a  number of factors, including, but not limited to, the following, any of
which  could  cause  actual  results  to  vary  materially  from  current  and
historical  results  or  the  Company's  anticipated  future  results:

-          Currently, the Company's business is focused principally within the
global property and casualty and life insurance and related financial services
industries;

-     There is increasing competition for the Company's products and services;

-       The market for the Company's products and services is characterized by
rapid  changes  in  technology;

-     Contracts with governmental agencies involve a variety of special risks,
including  the  risk  of early contract termination by the governmental agency
and  changes  associated  with  newly  elected  state administrations or newly
appointed  regulators;

-      The timing and amount of the Company's revenues are subject to a number
of  factors, including, but not limited to, the timing of customers' decisions
to  enter  into  large  license  agreements  with  the  Company;

-          Unforeseen  events  or  adverse  economic  or  business  trends may
significantly  increase  cash  demands  beyond  those currently anticipated or
affect  the  Company's  ability  to  generate/raise  cash to satisfy financing
needs;

<PAGE>
-       The Company's operations have not proven to be significantly seasonal,
although  quarterly  revenues and net income can be expected to vary at times;

-          Although  the  Company  cannot  accurately  determine  the  amounts
attributable  thereto,  the  Company  has  been  affected by inflation through
increased  costs  of  employee  compensation  and  other  operating  expenses.

-      Many of the Company's current and potential customers are or will spend
significant  amounts  of  money  to  make  their  existing information systems
capable  of  handling  the  year  2000.

     The  preparation  of  financial  statements  in conformity with generally
accepted  accounting  principles  requires  management  to  make estimates and
assumptions  that  affect  the  reported amounts of assets and liabilities and
disclosure  of  contingent assets and liabilities at the date of the financial
statements,  as  well  as the reported amounts of revenues and expenses during
the  reporting  period.  Changes  in the status of certain matters or facts or
circumstances  underlying  these estimates could result in material changes in
these  estimates,  and  actual  results  could  differ  from  these estimates.

     Because  of the foregoing factors, as well as other factors affecting the
Company's   operating  results,  past  financial  performance  should  not  be
considered  to  be  a  reliable indicator of future performance, and investors
should  not  use  historical  trends to anticipate results or trends in future
periods.

YEAR 2000 READINESS

     Many  existing  computer programs were designed to use only two digits to
identify  a  year  in date fields.  If not corrected, these applications could
fail or produce erroneous results when working with dates in the Year 2000 and
beyond. This Year 2000 issue may potentially affect the Company in four areas:
its  product  offerings, its  services  offerings, third-party  products  used
internally, and its suppliers.  The Company's various business units have been
responsible for  the  assessment,  remediation,  validation and implementation
of Year 2000 corrective actions.

     The  application  code  of  the Company's primary product offerings, S3+,
Series  II,  INSURE/90,  POINT , CyberLife  and  CYBERTEK CK/4  products, were
either  initially  designed  or have been updated in their currently available
releases  to be capable of processing and storing date data with dates in both
the  twentieth  (1900's)  and twenty-first (2000's) centuries.  The Company is
currently conducting an inventory and verifying the Year 2000 readiness of the
third-party  products  with  which  these Company applications are designed to
operate in order to validate that no unanticipated Year 2000 issues exist.  In
addition,  the  Company  also is in the process of conducting an inventory and
assessing  other  Company  and third-party products previously licensed by the
Company to customers to determine if any renovation efforts may be required in
relation  to  these  products.

<PAGE>
In  its  services  offerings, the Company has assessed and commenced Year 2000
remediation of the applications used in processing the data of its Information
Technology  Outsourcing  and  Business Process Outsourcing services customers.
Some  of  these remediation efforts are complete and some are still in various
stages  of coding, testing or implementation.  The Company intends to complete
these  Year 2000 remediation efforts and required testing, in a Year 2000 test
environment,  prior  to  the need for these services to process data involving
dates  in  the  twenty-first  century.

     The  primary  third-party  products  used by the Company for its internal
operation  include  its  data center hardware and software, internal financial
systems,  and  network and PC hardware and software.  The Company's Blythewood
data  center  has  completed  its  hardware  and  operating software inventory
assessments  and  has  substantially  completed  the  remediation  efforts  of
updating  these  hardware  and software assets for the Year 2000 requirements.
The  Company's  Australian and European data centers also have completed their
inventory  assessment and are implementing the hardware and operating software
enhancements  required  for  Year  2000  remediation.

     In  1996, the Company commenced the process of identifying, selecting and
implementing  an  enterprise  wide  financial  and  human  resources system to
replace  its  existing  systems.    The  selected  solution is currently being
implemented,  is  designed to meet Year 2000 requirements, and is scheduled to
be  operational at the end of 1998.  In addition, the Company is commencing an
inventory  and  assessing  all  of its network and PC hardware and software to
determine  if  any  Year  2000  remediation  upgrades  will  be  required.

     Finally,  the  primary  suppliers  upon  whom  the Company's services are
dependent are electric utility and telephone companies who provide services to
the  Company's  various  offices  and  data  centers.    If these services are
interrupted  for  a prolonged period due to the suppliers' Year 2000 problems,
it  will  disrupt  the Company's ability to provide its services to customers,
notwithstanding the backup battery and diesel power supplies available for the
data  center  locations.

     As discussed above, the Company has not yet fully completed its Year 2000
evaluations  or  its remediation efforts.  If such remediation efforts are not
completed  on a timely basis, Year 2000 issues could have a material impact on
the  Company's  operations  and  financial  results.   However, based upon the
Company's  experience  to  date,  at this time, it is not anticipated that the
completion  of  remaining  Year  2000 remediation efforts will have an adverse
material   effect   upon  the  Company's  financial  position  or  results  of
operations.

SAFE  HARBOR  STATEMENT  UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:  Statements in this report that are not descriptions of historical facts
may be forward-looking statements that are subject to risks and uncertainties,
including  economic,  competitive  and  technological  factors  affecting  the
Company's operations, markets, products, services and prices, as well as other
specific  factors  discussed  in the Company's filings with the Securities and
Exchange  Commission.  These  and  other  factors  may cause actual results to
differ  materially  from  those  anticipated.

<PAGE>

                                    PART II
                               OTHER INFORMATION

                     POLICY MANAGEMENT SYSTEMS CORPORATION


ITEM  1.    LEGAL  PROCEEDINGS

     See Note 3, Contingencies, of Notes to Consolidated Financial Statements,
which  is  incorporated  by  reference  in  this  Item.


ITEMS  2,  3,  4  AND  5  are  not  applicable


ITEM  6.    EXHIBITS  AND  REPORTS  ON  FORM  8-K.

Exhibits

     Exhibits required to be filed with this Quarterly Report on Form 10-Q are
listed  in  the  following  Exhibit  Index.

Reports  on  Form  8-K

     The Company did not file any reports on Form 8-K during the quarter ended
March  31,  1998.

<PAGE>



                     POLICY MANAGEMENT SYSTEMS CORPORATION


                                  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.


                     POLICY MANAGEMENT SYSTEMS CORPORATION
                     -------------------------------------
                                 (Registrant)




Date:    May  12,  1998          Timothy  V.  Williams
                                 Executive  Vice  President
                                 (Chief  Financial  Officer)

<PAGE>
                     POLICY MANAGEMENT SYSTEMS CORPORATION
                                 EXHIBIT INDEX

Exhibit
Number

3.          ARTICLES  OF  INCORPORATION  AND  BY-LAWS

A.      Bylaws of the Company, as amended through July 19, 1994, incorporating
all amendments thereto subsequent to December 31, 1993 (filed as an Exhibit to
Form  10-K for the year ended December 31, 1994, and is incorporated herein by
reference)

B.        Articles of Incorporation of the Company, as amended through October
13, 1994, incorporating all amendments thereto subsequent to December 31, 1993
(filed as an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

4.          INSTRUMENTS  DEFINING  THE  RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES

A.       Specimen forms of certificates for Common Stock of the Company (filed
as  an Exhibit to Registration Statement No. 2-74821, dated December 16, 1981,
and  is  incorporated  herein  by  reference)

B.        Articles of Incorporation of the Company, as amended through October
13, 1994, incorporating all amendments thereto subsequent to December 31, 1993
(filed as an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

10.          MATERIAL  CONTRACTS

A.      Policy Management Systems Corporation 1986 Stock Option Plan (filed as
an  Exhibit  to  Form  10-K  for  the  year  ended  December  31, 1986, and is
incorporated  herein  by  reference)

B.          Conformed  copy  of  Development  and  Marketing Agreement between
International  Business  Machines  Corporation  and  Policy Management Systems
Corporation, dated July 26, 1989 (File No. 0-10175 - filed under cover of Form
SE  filed  on  September  29,  1989,  and is incorporated herein by reference)

C.      Policy Management Systems Corporation 1989 Stock Option Plan (File No.
0-10175  - filed under cover of Form SE on March 22, 1991, and is incorporated
herein  by  reference)

D.          Deferred  Compensation Agreement with G. Larry Wilson (filed as an
Exhibit to Form 10-K for the year ended December 31, 1993, and is incorporated
herein  by  reference)

E.       Employment Agreement with Stephen G. Morrison (filed as an Exhibit to
Form  10-Q for the quarter ended March 31, 1994, and is incorporated herein by
reference)

<PAGE>

F.       Stock Option/Non-Compete Agreement with Stephen G. Morrison (filed as
an  Exhibit  to  Form  10-Q  for  the  quarter  ended  March  31, 1994, and is
incorporated  herein  by  reference)

G.      Shareholders' Agreement, dated April 26, 1994, among Policy Management
Systems  Corporation,  General Atlantic Partners 14, L.P. and GAP Coinvestment
Partners (filed as an Exhibit to Form 10-Q for the quarter ended September 30,
1994,  and  is  incorporated  herein  by  reference)

H.          Registration  Rights Agreement, dated April 26, 1994, among Policy
Management  Systems  Corporation,  General  Atlantic Partners 14, L.P. and GAP
Coinvestment  Partners (filed as an Exhibit to Form 10-Q for the quarter ended
September  30,  1994,  and  is  incorporated  herein  by  reference)

I.       Employment Agreement with Timothy V. Williams (filed as an Exhibit to
Form  10-K for the year ended December 31, 1994, and is incorporated herein by
reference)

J.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed as an Exhibit to Form 10-Q for the quarter ended September 30,
1992,  and  is  incorporated  herein  by  reference)

K.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed as an Exhibit to Form 10-Q for the quarter ended September 30,
1994,  and  is  incorporated  herein  by  reference)

L.        Stock Option Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed  as  an  Exhibit  to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

M.     Policy Management Systems Corporation 1993 Long-Term Incentive Plan for
Executives  (filed  as an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

N.     First Amendment to the Policy Management Systems Corporation 1989 Stock
Option  Plan (filed as an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

O.          Fourth Amendment to the Policy Management Systems Corporation 1989
Stock  Option  Plan  (filed  as an Exhibit to Form 10-Q for the quarter ending
March  31,  1995,  and  is  incorporated  herein  by  reference)

P.          Second  and  Third  Amendments  to  the  Policy Management Systems
Corporation  1989  Stock  Option  Plan (filed as Exhibits to Form 10-Q for the
quarter  ended  June  30,  1995,  and  is  incorporated  herein  by reference)

<PAGE>

Q.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer (filed as an Exhibit to Form 10-Q for the quarter ended June 30, 1995,
and  is  incorporated  herein  by  reference)

R.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed  as  an Exhibit to Form 10-K for year ended December 31, 1995,
and  is  incorporated  herein  by  reference)

S.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed  as  an Exhibit to Form 10-K for year ended December 31, 1995,
and  is  incorporated  herein  by  reference)

T.        Stock Option/Non-Compete Agreement Amendment No. 1 dated November 8,
1995,  to Stock Option/Non-Compete Agreement dated July 20, 1995, with Paul R.
Butare (filed as an Exhibit to Form 10-K for year ended December 31, 1995, and
is  incorporated  herein  by  reference)

U.          Stock  Option/Non-Compete Agreement with Timothy V. Williams dated
February 1, 1994 (filed as an Exhibit to Form 10-K for year ended December 31,
1995,  and  is  incorporated  herein  by  reference)

V.       Stock Option/Non-Compete Agreement with Timothy V. Williams dated May
10,  1995  (filed as an Exhibit to Form 10-K for year ended December 31, 1995,
and  is  incorporated  herein  by  reference)

W.          Registration Rights Agreement, dated March 8, 1996, between Policy
Management  Systems  Corporation and Continental Casualty Company (filed as an
Exhibit to Form 10-Q for the quarter ended March 31, 1996, and is incorporated
herein  by  reference)

X.       Shareholders Agreement dated March 8, 1996, between Policy Management
Systems  Corporation  and Continental Casualty Company (filed as an Exhibit to
Form  10-Q for the quarter ended March 31, 1996, and is incorporated herein by
reference)

Y.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer (filed as an Exhibit to Form 10-Q for the quarter ended June 30, 1996,
and  is  incorporated  herein  by  reference)

Z.       Employment Agreement Form dated November 7, 1996, for Messrs. Butare,
Morrison  and  Williams  together  with a schedule identifying particulars for
each  executive  officer  (filed  as  an  Exhibit  to Form 10-K for year ended
December  31,  1996,  and  is  incorporated  herein  by  reference)

<PAGE>

AA.          Stock Option/Non-Compete Agreement with Stephen G. Morrison dated
October 22, 1996 (filed as an Exhibit to Form 10-K for year ended December 31,
1996,  and  is  incorporated  herein  by  reference)

BB.          Stock Option/Non-Compete Form Agreement dated January 8, 1997 for
named  executive officers together with a schedule identifying particulars for
each executive officer (filed as an Exhibit to Form 10-Q for the quarter ended
March  31,  1997,  and  is  incorporated  herein  by  reference)

CC.        Annual Bonus Program for Executive Officers (filed as an Exhibit to
Form  10-Q for the quarter ended March 31, 1997, and is incorporated herein by
reference)

DD.          Form of Amendment No. 1 to the Employment Agreements with Messrs.
Butare,  Morrison  and  Williams,  together   with  a   schedule   identifying
particulars  for  each executive officer (filed as an Exhibit to Form 10-Q for
the  quarter  ended  June  30,  1997, and is incorporated herein by reference)

EE.     Form of Employment Agreements with Messrs. Wilson, Bailey and Coggiola
together  with  schedule  identifying  particulars  for each executive officer
(filed  as  an  Exhibit to Form 10-Q for the quarter ended September 30, 1997,
and  is  incorporated  herein  by  reference)

FF.       Credit Agreement dated as of August 8, 1997, among Policy Management
Systems  Corporation,  the  Guarantors  Party hereto, Bank of America National
Trust and Savings Association and the Other Financial Institution Party Hereto
(filed  as  an  exhibit to Form 10-Q for the quarter ended September 30, 1997,
and  is  incorporated  herein  by  reference)

GG.     Employment Agreement dated January 1, 1998, and Addendum No. 1 thereto
dated  January  26, 1998, with Donald A. Coggiola (filed as an exhibit to Form
10-K  for  the  year  ended  December  31,  1997 and is incorporated herein by
reference)

HH.       Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed  herewith)

27.          FINANCIAL  DATA  SCHEDULES

A.        Three Months Ended March 31, 1998 filed herewith (EDGAR version only)

B.         Three Months Ended March 31, 1997, as restated, filed herewith (EDGAR
version  only)
[{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 68387}]
{"company-data": {"conformed-name": "POLICY MANAGEMENT SYSTEMS CORP", "cik": "0000356226", "assigned-sic": "6411", "irs-number": "570723125", "state-of-incorporation": "SC", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-10557", "film-number": "98616092"}, "business-address": {"street1": "ONE PMS CTR", "street2": "PO BOX TEN", "city": "COLUMBIA", "state": "SC", "zip": "29202", "phone": "8037354000"}}
UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  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 MARCH 31, 1998
                         Commission file number 1-0557

                     POLICY MANAGEMENT SYSTEMS CORPORATION
            (Exact name of registrant as specified in its charter)

       SOUTH CAROLINA                             57-0723125
(State or other jurisdiction of                  (IRS Employer
incorporation or organization)               Identification No.)

ONE PMSC CENTER (PO BOX TEN)
BLYTHEWOOD, SC (COLUMBIA, SC)                   29016 (29202)
(Address of principal executive                  (Zip Code)
  offices)

Registrant's  telephone  number,  including  area  code  (803)  333-4000

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

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

         18,393,268 Common shares, $.01 par value, as of May 8, 1998.

     The  information  furnished herein reflects all adjustments which are, in
the  opinion of management, necessary for the fair presentation of the results
for the periods reported.  Such information should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended December 31, 1997.
POLICY MANAGEMENT SYSTEMS CORPORATION

                                           INDEX

PART  I.FINANCIAL  INFORMATION                                              PAGE
Item 1. Financial Statements

Consolidated Statements of Income for the Three Months Ended March 31, 1998 
 and 1997. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997 . . .   4

Consolidated Statements of Changes in Stockholders' Equity and Comprehensive 
 Income for the Three Months Ended March 31, 1998 and 1997 . . . . . . . . .   5

Consolidated Statements of Cash Flows for the Three Months Ended 
 March 31, 1998 and 1997 . . . . . . . . . . . . . . . . . . . . . . . . . .   6

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . .   7

Item 2. Management's Discussion and Analysis of Financial Condition and 
  Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . .  13

PART II. OTHER INFORMATION

Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . .  21

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . .  21

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
PART I
                             FINANCIAL INFORMATION
                     POLICY MANAGEMENT SYSTEMS CORPORATION
                       CONSOLIDATED STATEMENTS OF INCOME

                                                     Three Months
                                                    Ended March 31,
                                                   1998         1997
                                                     (Unaudited)
----------------------------------------------------------------------
                                         (In Thousands, Except Per Share Data)
REVENUES
 Licensing . . . . . . . . . . . . . . . . . . .  $ 28,737   $ 26,230 
 Services. . . . . . . . . . . . . . . . . . . .   111,684     88,853 
                                                  ---------  ---------
                                                   140,421    115,083 
                                                  ---------  ---------
OPERATING EXPENSES
 Cost of revenues
  Employee compensation & benefits . . . . . . .    62,964     47,329 
  Computer and communications expenses . . . . .     8,599      7,834 
  Depreciation and amortization of
   property, equipment and
   capitalized software costs. . . . . . . . . .    15,830     13,832 
  Other costs & expenses . . . . . . . . . . . .     7,032      5,761 
 Selling, general and administrative
   expenses. . . . . . . . . . . . . . . . . . .    22,725     22,112 
 Amortization of goodwill and
   other intangibles . . . . . . . . . . . . . .     2,423      2,472 
                                                  ---------  ---------
                                                   119,573     99,340 
                                                  ---------  ---------

OPERATING INCOME . . . . . . . . . . . . . . . .    20,848     15,743 

Equity in earnings of
   unconsolidated affiliates . . . . . . . . . .       205        370 

Other Income and Expenses
  Investment income. . . . . . . . . . . . . . .       502        427 
  Interest expense and other charges . . . . . .      (927)    (1,217)
                                                  ---------  ---------
                                                      (425)      (790)
                                                  ---------  ---------
Income from continuing operations
  before income taxes. . . . . . . . . . . . . .    20,628     15,323 
Income taxes . . . . . . . . . . . . . . . . . .     7,761      5,718 
                                                  ---------  ---------
INCOME FROM CONTINUING OPERATIONS. . . . . . . .    12,867      9,605 

DISCONTINUED OPERATIONS:
  Income from operations of discontinued
    operations less applicable income
    taxes of $215 and $351, respectively . . . .       322        487 
                                                  ---------  ---------

Net income . . . . . . . . . . . . . . . . . . .  $ 13,189   $ 10,092 
                                                  =========  =========

BASIC EARNINGS PER SHARE:
  Income from continuing operations. . . . . . .  $   0.70   $   0.53 
  Income from discontinued operations. . . . . .      0.02       0.03 
                                                  ---------  ---------
                                                  $   0.72   $   0.56 
                                                  =========  =========

DILUTED EARNINGS PER SHARE:                      
  Income from continuing operations. . . . . . .  $   0.65   $   0.52 
  Income from discontinued operations. . . . . .      0.02       0.03 
                                                  ---------  ---------
                                                  $   0.67   $   0.55 
                                                  =========  =========

Weighted average common shares . . . . . . . . .    18,344     18,179 
Weighted average common shares assuming dilution    19,562     18,400
See  accompanying  notes
POLICY MANAGEMENT SYSTEMS CORPORATION
                          CONSOLIDATED BALANCE SHEETS

                                                 (Unaudited)  (Audited)
                                                  March 31,  December 31,
                                                    1998        1997
                                                  --------    --------
                                      (In Thousands, Except Share Data)
Assets
Current assets
Cash and equivalents                              $ 19,591   $ 32,179 
 Marketable securities                                   20      3,280 
 Receivables, net of allowance for uncollectible
  amounts of $2,441 ($2,628 at 1997)                127,264    128,789 
 Income tax receivable                                1,116      1,098 
 Deferred income taxes                                6,135      3,628 
 Other                                               22,249     16,835 
                                                   ---------  ---------
   Total current assets                             176,375    185,809 

Property and equipment, at cost less accumulated
 depreciation and amortization of $145,847
 ($139,522 at 1997)                                 118,453    116,433 
Receivables                                           2,888      3,271 
Income tax receivable                                 4,041      4,041 
Goodwill and other intangibles, net                  68,179     69,125 
Capitalized software costs, net                     210,898    204,118 
Deferred income taxes                                21,777     21,996 
Investments                                           8,379     11,066 
Other                                                 4,718      2,547 
                                                   ---------  ---------
     Total assets                                  $615,708   $618,406 
                                                   =========  =========

Liabilities
Current liabilities
 Accounts payable and accrued expenses             $ 48,534   $ 57,345 
 Accrued restructuring charges                          124        145 
 Accrued contract termination costs                     619        830 
 Current portion of long-term debt                    5,686      1,191 
 Income taxes payable                                 8,707      7,499 
 Unearned revenues                                   16,525     18,806 
 Other                                                  396        397 
                                                   ---------  ---------
   Total current liabilities                         80,591     86,213 

Long-term debt                                       19,443     37,714 
Deferred income taxes                                86,715     80,496 
Accrued restructuring charges                         1,413      1,366 
Other                                                 3,104      2,121 
                                                   ---------  ---------
    Total liabilities                               191,266    207,910 
                                                   ---------  ---------

Commitments and contingencies (Note 2)

Stockholders' Equity
Special stock, $.01 par value, 5,000,000 shares
 authorized                                               -          - 
Common stock, $.01 par value, 75,000,000 shares
 authorized, 18,398,652 shares issued and
 outstanding (18,339,304 at December 31, 1997)          184        183 
Additional paid-in capital                          113,154    112,090 
Retained earnings                                   319,556    306,367 
Accumulated other comprehensive income               (8,452)    (8,144)
                                                   ---------  ---------
    Total stockholders' equity                      424,442    410,496 
                                                   ---------  ---------
     Total liabilities and stockholders' equity    $615,708   $618,406 
                                                   =========  =========
See accompanying notes
POLICY MANAGEMENT SYSTEMS CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                                  (Unaudited)

                                                          Accumulated
                                     Additional              Other
                              Common  Paid-In   Retained Comprehensive
                               Stock  Capital   Earnings     Income    Total
-------------------------------------------------------------------------------
                                              (Dollars In Thousands)
BALANCE, DECEMBER 31, 1996 . .  $182   $106,104   $256,110  $   856   $363,252 

Net income . . . . . . . . . .     -          -     10,092        -     10,092 
Other comprehensive income,
  net of tax:
    Foreign currency
      translation adjustment .     -          -          -   (2,727)    (2,727)
    Unrealized gain (loss) on
      marketable securities. .     -          -          -        1          1 
Stock options exercised
  (215 shares) . . . . . . . .     -          7          -        -          7 
                                -----  ---------  --------  --------  ---------

BALANCE, MARCH 31, 1997. . . .  $182   $106,111   $266,202  $(1,870)  $370,625 
                                =====  =========  ========  ========  =========

BALANCE, DECEMBER 31, 1997 . .  $183   $112,090   $306,367  $(8,144)  $410,496 

Net income . . . . . . . . . .     -          -     13,189        -     13,189 
Other comprehensive income,
  net of tax:
    Foreign currency
      translation adjustment .     -          -          -     (300)      (300)
    Unrealized gain (loss) on
      marketable securities. .     -          -          -       (8)        (8)
Stock options exercised
  (205,748 shares) . . . . . .     2     11,023          -        -     11,025 
Repurchase of 146,400 shares
  of common stock. . . . . . .    (1)    (9,959)         -        -     (9,960)
                                -----  ---------  --------  --------  ---------

BALANCE, MARCH 31, 1998. . . .  $184   $113,154   $319,556  $(8,452)  $424,442 
                                =====  =========  ========  ========  =========
See accompanying notes
POLICY MANAGEMENT SYSTEMS CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                                       Three Months
                                                      Ended March 31,
                                                     1998        1997
                                                   --------    --------
                                                      (In Thousands)
Operating  Activities
Net income                                        $ 13,189   $ 10,092 
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                     19,718     17,530 
   Deferred income taxes                              3,264        320 
   Provision for uncollectible accounts                   -        742 
   Impairment and restructuring charges                   -        444 
 Changes in assets and liabilities:
   Accrued restructuring and lease
    termination costs                                    26     (1,170)
   Receivables                                        2,102     (4,133)
   Income taxes receivable                              (18)        27 
   Accounts payable and accrued expenses             (9,155)   (10,849)
   Income taxes payable                               1,208      3,618 
 Other, net                                          (9,522)     1,009 
                                                   ---------  ---------
      Cash provided by operations                    20,812     17,630 
                                                   ---------  ---------

Investing Activities
 Proceeds from sales/maturities of available-for-
  sale securities                                     3,257        250 
 Proceeds from sales of held-to-
  maturity securities                                 2,969          - 
 Acquisition of property and equipment               (9,244)    (7,717)
 Capitalized internal software development
  costs                                             (14,880)   (14,368)
 Business acquisition                                (2,688)         - 
 Proceeds from disposal of property and
  equipment                                             200        130 
                                                   ---------  ---------
      Cash used by investing activities             (20,386)   (21,705)
                                                   ---------  ---------

Financing Activities
 Payments on long-term debt                         (18,271)   (23,456)
 Proceeds from borrowing under credit facility        4,495     15,238 
 Issuance of common stock under stock
  option plans                                       11,025          7 
Repurchase of common stock                           (9,960)         - 
                                                   ---------  ---------
      Cash used by financing activities             (12,711)    (8,211)
                                                   ---------  ---------

Effect of exchange rate changes on cash                (303)       158 
Net decrease in cash and equivalents                (12,588)   (12,128)
Cash and equivalents at beginning of period          32,179     22,121 
                                                   ---------  ---------
Cash and equivalents at end of period              $ 19,591   $  9,993 
                                                   =========  =========

Supplemental Information
 Interest paid                                     $  1,058   $  1,182 
 Income taxes paid                                    1,123      1,305
See  accompanying  notes
POLICY MANAGEMENT SYSTEMS CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                MARCH 31, 1998

NOTE  1.          SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

BASIS  OF  PRESENTATION

     The  consolidated  financial  statements  of  Policy  Management  Systems
Corporation  (the  "Company")  have been prepared in accordance with the rules
and  regulations of the Securities and Exchange Commission (the "SEC").  These
consolidated  financial  statements  include  estimates  and  assumptions that
affect  the  reported  amounts  of  assets  and  liabilities,  disclosure  of
contingent  assets  and  liabilities and the amounts of revenues and expenses.
Actual  results  could  differ  from  those  estimated.    In  the  opinion of
management,  these  statements  include  all  adjustments necessary for a fair
presentation  of  the  results  of  all  interim  periods reported herein. All
adjustments  are  of  a  normal  recurring  nature unless otherwise disclosed.
Certain  information  and  footnote  disclosures  prepared  in accordance with
generally accepted accounting principles have been either condensed or omitted
pursuant  to SEC rules and regulations.  However, management believes that the
disclosures  made  are  adequate  for  a  fair  presentation  of  results  of
operations,  financial  position and cash flows.  These consolidated financial
statements  should  be  read  in  conjunction  with the consolidated financial
statements  and  accompanying  notes  included  in the Company's latest annual
report  on  Form  10-K.

BASIC AND DILUTED EARNINGS PER SHARE

     Basic  and diluted earnings per share ("EPS") are calculated according to
the  provisions  of  Statement  of  Financial  Accounting  Standards  No. 128,
"Earnings  Per  Share".    For  the Company, the numerator is the same for the
calculation  of both basic and diluted EPS.  The following is a reconciliation
of  the  denominator  used  in  the  EPS  calculations  (in  thousands):
Three Months
                                  Ended March 31,
                                  --------------
                                   1998   1997  
                                  ------ -------
Weighted Average Shares
-----------------------
Basic EPS. . . . . . . . . . . .  18,344  18,179
Effect of common stock options .   1,218     221
                                  ------  ------
Diluted EPS. . . . . . . . . . .  19,562  18,400
                                  ======  ======
Options  to  purchase 17,550 and 375,000 shares of common stock at $78.94
and  $81.90 per share, respectively, were outstanding but were not included in
the  computation  of diluted EPS for 1998 because the options' exercise prices
were  greater than the average market price for the Company's common stock for
the  period.
NEW  ACCOUNTING  STANDARDS

     In  June  1997,  Statement  of  Financial  Accounting  Standards No. 130,
"Reporting  Comprehensive  Income"  ("SFAS  130"),  was  issued.    SFAS  130
establishes  standards  for  reporting and display of comprehensive income and
its components, and is effective for fiscal years beginning after December 15,
1997.    The  Company adopted SFAS 130 at January 1, 1998 and has included the
appropriate  disclosures  in  the  Consolidated  Statements  of  Changes  in
Stockholders'  Equity  and  Comprehensive  Income.

     In  October  1997, the American Institute of Certified Public Accountants
issued  Statement  of  Position  97-2,  "Software  Revenue  Recognition" ("SOP
97-2").   SOP 97-2 provides guidance on applying generally accepted accounting
principles  in  recognizing revenue on software transactions, and is effective
for  transactions  entered  into  in fiscal years beginning after December 31,
1997.   The Company adopted SOP 97-2 at January 1, 1998.  The adoption did not
have  a  material  impact  on  the  Company's  financial  statements.

     In  February 1998, the American Institute of Certified Public Accountants
issued  Statement  of  Position  98-1,  "Accounting  for the Costs of Computer
Software  Developed  or  Obtained  for  Internal  Use" ("SOP 98-1").  SOP 98-1
provides  guidance  on accounting for the costs of computer software developed
or  obtained  for  internal  use,  and is effective for fiscal years beginning
after  December  31,  1998,  with  earlier  adoption  encouraged.  The Company
adopted  SOP  98-1  at  January 1, 1998.  The adoption did not have a material
effect  on  the  Company's  financial  statements.

OTHER  MATTERS

     Certain  prior  year amounts have been reclassified to conform to current
year  presentation.

NOTE  2.          CONTINGENCIES

     In  March 1994, Security Life of Denver Insurance Company ("SLD") brought
suit  against the Company in the United States District Court for the District
of  Colorado  alleging  breach of a life insurance joint development contract,
unfair trade practices, and fraud. SLD sought direct, indirect, consequential,
and  punitive damages in excess of $80 million.  In February 1997, following a
jury  trial,  the  Court  and  jury  entered  judgment in favor of the Company
against  SLD on the claims of fraud and unfair trade practices.  A verdict and
judgment  was  returned against the Company for breach of contract and damages
of  $3.5  million, together with pre-judgment interest.  In addition, the jury
found that SLD was using the Company's trade secrets without permission.  As a
result  of post trial motions, the judgment was amended to delete the award of
pre-judgment  interest  and  SLD  was ordered to return the Company's systems.
Both  the Company and SLD have appealed to the United States Court of Appeals.
Changes  in  the  status  of  this  proceeding could result in a change in the
Company's  estimate  of  anticipated  liability  for the costs associated with
these  matters.
The Company is also presently involved  in  litigation which commenced in
January  of  1996  in  the Circuit Court in Greenville County, South Carolina,
with  Liberty Life Insurance Company and certain of its affiliates ("Liberty")
arising  out  of  the  parties'  prior contractual relationship related to the
development  and  licensing  of  Series  III  life  insurance  systems and the
subsequent  licensing  of  the  Company's  CYBERTEK  life  insurance  systems.
Liberty's  complaint alleges breach of contract, breach of express and implied
warranties,  fraudulent  inducement,  breach  of  contract  accompanied  by  a
fraudulent  act,  and recission.  Liberty has alleged actual and consequential
damages  in excess of $160 million and also seeks treble and punitive damages.
The  Company  has  asserted  various  affirmative  defenses  and  is  pursuing
counterclaims  against  Liberty  for breach of contract, recoupment, breach of
good  faith  and  fair  dealing,  and  breach  of  contract  accompanied  by a
fraudulent act.  The Company is seeking equitable relief, including injunctive
relief,  and  currently  unspecified  actual,  compensatory  and consequential
damages.

     Based upon the allegations raised in a prior lawsuit and the SLD lawsuit,
the  Company's  insurer,  St.  Paul  Mercury  Insurance  Company ("St. Paul"),
commenced  in  June  1995  a  declaratory judgment action in the United States
District  Court  for  the  District  of  South Carolina against the Company to
determine St. Paul's obligation for defense costs and to indemnify the Company
for  any  payment  related  to these claims.  The Company filed a counterclaim
against  St.  Paul  seeking  to  recover  the  Company's defense costs in both
matters,  coverage  for  damages,  if  any,  awarded  in  those  matters,  and
consequential  and  punitive  damages.

     In  connection  with the dismissal of the prior lawsuit, St. Paul and the
Company  agreed  to  dismiss with prejudice all claims against each other with
respect  to  the  matter, and St. Paul agreed to reimburse the Company for the
Company's  legal fees.  The action continues as to the parties' claims related
to  insurance  coverage  for  the  SLD  matter.

     In  addition  to  the  litigation described above, there are also various
other  litigation  proceedings  and  claims  arising in the ordinary course of
business.  The  Company believes it has meritorious defenses and is vigorously
defending  these  matters.

     While  the  resolution  of any of the above matters could have a material
adverse  effect  on  the  results of operations in future periods, the Company
does  not  expect  these  matters  to  have  a  material adverse effect on its
consolidated  financial  position.  The Company, however, is unable to predict
the  ultimate  outcome  or  the  potential  financial impact of these matters.
NOTE  3.          SEGMENT  INFORMATION

     The  Company's  operating  segments  are  the  five  revenue-producing
components of the Company for which separate financial information is produced
for  internal  decision  making  and  planning  purposes.  The segments are as
follows:

1.  Property and casualty enterprise software and services (generally referred
to  as  the "domestic property and casualty business").  This segment provides
software  products,  product  support,  professional  services and outsourcing
primarily  to  the  US  property  and  casualty  insurance  market.

2.  Life  and  financial solutions enterprise software and services (generally
referred  to  as  the "domestic life and financial solutions business").  This
segment provides software products, product support, professional services and
outsourcing  primarily to the US life insurance and related financial services
markets.

3.  International.   This segment provides software products, product support,
professional  services,  outsourcing  and information services to the property
and  casualty and life insurance markets primarily in Canada, Europe, Asia and
Australia.

4.  Property  and  casualty  information  services.    This  segment  provided
information  services, principally motor vehicle records and claims histories,
to  US  property  and casualty insurers.  This segment was sold in August 1997
and  is  presented  as  a  discontinued  operation.

5.  Life  information  services.   This segment provides information services,
principally physician reports and medical histories, to US life insurers. This
segment  is  in  the  process of being sold and is presented as a discontinued
operation.
Information  about  the  Company's operations for the three months ended March
31,  1998  and  1997  is  as  follows:
Three Months
                                               Ended March 31,
                                             -------------------
                                               1998       1997
                                             --------   --------
                                                (In thousands)
REVENUES FROM EXTERNAL CUSTOMERS
Enterprise software and services
  Property and casualty . . . . . . . . . .  $ 67,951   $ 56,274 
  Life and financial solutions. . . . . . .    30,425     20,155 
                                             ---------  ---------
    Total US revenues . . . . . . . . . . .    98,376     76,429 
  International . . . . . . . . . . . . . .    42,045     38,654 
                                             ---------  ---------
    Total revenues from
       continuing operations. . . . . . . .  $140,421   $115,083 
                                             =========  =========

 Discontinued Operations
  Information Services
   Property and casualty. . . . . . . . . .  $      -   $ 24,069 
   Life . . . . . . . . . . . . . . . . . .     7,125     16,104 

INCOME (EXPENSE) FROM CONTINUING OPERATIONS
 Enterprise software and services
  Property and casualty . . . . . . . . . .  $ 17,460   $ 15,517 
  Life and financial solutions. . . . . . .     6,879      3,918 
  Corporate and US administrative . . . . .    (6,491)    (4,730)
                                             ---------  ---------
    Total US operating income . . . . . . .    17,848     14,705 
                                             ---------  ---------

  International . . . . . . . . . . . . . .     4,962      2,534 
  International administrative. . . . . . .    (1,962)    (1,496)
                                             ---------  ---------
    Total international . . . . . . . . . .     3,000      1,038 
                                             ---------  ---------
      Operating income. . . . . . . . . . .    20,848     15,743 
                                             ---------  ---------

Equity in earnings of
  unconsolidated affiliates . . . . . . . .       205        370 
Other income and expenses . . . . . . . . .      (425)      (790)
Income taxes. . . . . . . . . . . . . . . .     7,761      5,718 
                                             ---------  ---------
  Income from continuing operations . . . .  $ 12,867   $  9,605 
                                             =========  =========

DISCONTINUED OPERATIONS
 Information Services
  Property and casualty . . . . . . . . . .  $      -   $    274 
  Life. . . . . . . . . . . . . . . . . . .       560        564 
  Other income and expenses . . . . . . . .       (23)         - 
  Income taxes. . . . . . . . . . . . . . .       215        351 
                                             ---------  ---------
   Discontinued operations, net . . . . . .  $    322   $    487 
                                             =========  =========
NOTE 4.     DISCONTINUED OPERATIONS

     The  Company  has  signed  a  definitive  agreement  to  sell  its  life
information  services  business  segment.   This transaction is expected to be
concluded  in  the  second quarter of 1998 and the Company does not anticipate
any  material  gain  or loss.  The operations of this segment are presented as
discontinued  operations  in  the  accompanying  Consolidated  Statement  of
Operations.    The  following  is  a description of the estimated assets to be
disposed  of  (in  thousands):
March 31,
                                                    1998
                                                   ------
Current assets
Receivables, net of allowance for uncollectible
   amounts of $39. . . . . . . . . . . . . . . .  $ 6,908
 Other . . . . . . . . . . . . . . . . . . . . .    1,735
                                                  -------
                                                    8,643
Property and equipment, at cost less accumulated
   depreciation and amortization of $7,987 . . .    5,000
Goodwill and other intangibles, net. . . . . . .    5,166
Capitalized software costs, net. . . . . . . . .    1,272
Other. . . . . . . . . . . . . . . . . . . . . .       58
                                                  -------
  Total assets . . . . . . . . . . . . . . . . .  $20,139
                                                  =======
POLICY MANAGEMENT SYSTEMS CORPORATION
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The  following  discussion  and  analysis   provides   information  which
management  believes  is  relevant  to  an assessment and understanding of the
Company's  consolidated  results  of  operations and financial condition.  The
discussion  should  be  read  in  conjunction  with the consolidated financial
statements  and  notes thereto contained in Part I of this report on Form 10-Q
and  with the Company's Annual Report on Form 10-K for the year ended December
31,  1997.

                             RESULTS OF OPERATIONS

     Set  forth below are certain operating items expressed as a percentage of
revenues  and  the  percent  increase  (decrease)  for those items between the
periods  presented:
1998 vs. 1997
                                                              Percent
                                 Percentage of Revenues Increase (Decrease)
                                 ---------------------- ------------------
                                          Three               Three
                                       Months Ended           Months
                                        March 31,             Ended
                                      -------------
                                       1998    1997          March 31
                                      -----   -----         ----------
Revenues
 Licensing . . . . . . . . . . . . .   20.5%   22.8%           9.6%
 Services. . . . . . . . . . . . . .   79.5    77.2           25.7 
                                      ------  ------        
                                      100.0   100.0           22.0 
Operating expenses
 Cost of revenues
  Employee compensation and benefits   44.9    41.1           33.0 
  Computer & communication expenses.    6.1     6.8            9.8 
  Depreciation & amortization
   of property, equipment &
   capitalized software costs. . . .   11.3    12.0           14.4 
  Other costs & expenses . . . . . .    5.0     5.0           22.1 
 Selling, general &
   administrative expenses . . . . .   16.2    19.2            2.8 
 Amortization of goodwill and
   other intangibles . . . . . . . .    1.7     2.2           (2.0)
                                      ------  ------        
                                       85.2    86.3            20.4 
Operating income . . . . . . . . . .   14.8    13.7            32.4 
Equity in earnings of unconsolidated
   affiliates. . . . . . . . . . . .    0.2     0.4           (44.6)
Other income and expenses. . . . . .   (0.3)   (0.7)          (46.2)
                                      ------  ------        
Income from continuing operations
  before income taxes. . . . . . . .   14.7    13.4            34.6 
Income taxes . . . . . . . . . . . .    5.5     5.0            35.7 
                                      ------  ------        
Income from continuing operations. .    9.2     8.4            34.0 
Discontinued operations, net . . . .    0.2     0.4           (33.9)
                                      ------  ------        
Net income . . . . . . . . . . . . .    9.4%    8.8%           30.7%
                                      ======  ======
REVENUES
                                    Three Months
                                   Ended March 31,
                                 ------------------
  Licensing                        1998       1997      Change
                                 -------    -------     ------
                                (Dollars in Millions)
Initial charges . . . . . . . .  $  12.6    $  11.3       11.6%
Monthly charges . . . . . . . .     16.1       14.9        8.0
                                 --------   --------     ------
                                 $  28.7    $  26.2        9.6%
                                 =======    =======      ======

Percentage of total revenues . .   20.5%      22.8%
                                 -------    -------

     Initial license revenues increased $1.3 million from the first quarter of
1997  to  the first quarter of 1998, with the following increases or decreases
by  business segment:  domestic property and casualty up 77.5% ($2.3 million);
life  insurance  and  financial  solutions  down  21.7%  ($0.9  million);  and
international  down  2.2%  ($0.1  million).

     Initial  license  charges  for  the  first  quarter  of  1998  include
right-to-use  licenses  of  $4.9 million.  The right-to-use licenses represent
acquisitions  by certain customers of perpetual rights.  This compares to $1.0
million  in  right-to-use  licenses  for  the  same  period  of  1997.

     Monthly  license charges increased $1.2 million from the first quarter of
1997  to  the  first  quarter of 1998 with the following increases by business
segment:    domestic  property  and  casualty  up  2.1%  ($0.2  million); life
insurance  and  financial solutions up 23.7% ($0.6 million); and international
up  11.1%  ($0.4  million).    These  increases are related to the increase in
licensing  activity  over  the  last  several  quarters.

     Because  a significant portion of initial licensing revenues are recorded
at  the  time  new  systems  are licensed and such licensing activity can vary
dramatically from quarter to quarter, there can be significant fluctuations in
revenue  from  quarter to quarter.  Set forth below is a comparison of initial
license  revenues  for  the  last  eight quarters expressed as a percentage of
total  revenues  for  each  of  the  periods  presented:

                          1998            1997                     1996
                         ----- --------------------------- -------------------
                          1st    4th    3rd    2nd    1st   4th    3rd    2nd
                         ----- --------------------------- -------------------
                                         (Dollars in Millions)

Initial license revenues  $12.6  $25.1  $16.9  $16.6  $11.3  $19.4  $10.0 $12.0
% of total revenues         9.0%  17.0%  12.8%  13.4%   9.8%  15.5%   9.3% 12.4%
Three Months
                                  Ended March 31,
                                 -----------------
  Services                        1998       1997       Change
                                 ------    -------     ------
                                (Dollars In Millions)
Professional and outsourcing . . $110.8     $ 87.2       27.1%
Information. . . . . . . . . . .    0.1        0.2      (29.4)
Other. . . . . . . . . . . . . .    0.8        1.5      (49.2)
                                 ------     ------     ------
                                 $111.7     $ 88.9       25.7%
                                 ======     ======     =======

Percentage of total revenues . .  79.5%      77.2%
                                 ------     ------

     Professional  and  outsourcing  services revenues increased $23.6 million
from  the  first  quarter  of  1997  to  the  first  quarter of 1998, with the
following  increases  by  business segment:  domestic property and casualty up
22.7%  ($9.8  million); life insurance and financial solutions up 78.0% ($10.5
million);  and  international  up  10.9%  ($3.3  million).   The increases are
principally  due to increases in implementation services and in the processing
volumes  of  services  provided  to  new  and  existing  customers.

OPERATING  EXPENSES

COST  OF  REVENUES

     Employee  compensation and benefits increased 33.0% for the first quarter
1998  compared  with  the  first  quarter  of  1997, principally the result of
increased salaries and related costs associated with the growth in staffing in
professional  services  business  units.  Compensation  and benefits increased
24.8%  ($3.7  million)  internationally, while domestic increased 36.9% ($11.9
million).

     Computer and communications expenses increased 9.8% for the first quarter
1998  compared  with  the  first  quarter  of 1997, principally as a result of
increased  communications,  data circuit and maintenance costs associated with
the  growth  of the Company's domestic and international professional services
operations.

     Depreciation  and  amortization  of  property,  equipment and capitalized
software  costs  increased  14.4% for the first quarter 1998 compared with the
first  quarter  of  1997,  principally  due  to  higher  amortization  expense
resulting  from the recent release of the Company's S3+  property and casualty
insurance  client/server  software systems.  In addition, depreciation expense
increased  due  to  the  Company's  increased  investment  in  its information
technology  equipment  and  expanded  facilities  costs.

     Other  operating costs and expenses increased 22.1% for the first quarter
1998  compared  with  the  first  quarter of 1997 principally due to increased
facility  and  travel  costs.
SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

     Selling,  general  and  administrative  expenses  remained  relatively
unchanged.

AMORTIZATION  OF  GOODWILL  AND  OTHER  INTANGIBLES

     Amortization  of  goodwill  and  other  intangibles  remained  relatively
unchanged.

STRATEGIC  ALLIANCES

     Microsoft.    In  April  1998,  the  Company  announced  a  new strategic
business  alliance with Microsoft Corporation.  Under this strategic alliance,
the  Company  and  Microsoft  will  engage  in  joint  development,  sales and
marketing  activities  geared  toward  the  insurance  and  related  financial
services  industries.    This  alliance  is  not  exclusive.

     Lockheed  Martin.    In March 1998, the Company announced an agreement in
principle  to  form a strategic alliance with Integrated Business Solutions, a
unit  of  Lockheed  Martin  Corporation ("Lockheed").  Under the terms of this
agreement  the  Company  will  turn  over  operation  of its Blythewood, South
Carolina,  data  center  to  Lockheed in the third quarter of 1998.  The exact
terms  and  conditions  of  the  agreement  continue  to  be  negotiated.  The
consolidated  financial  statements contained herein do not include any effect
of  this  agreement.

OPERATING  INCOME

     First  quarter  1998  operating  income increased 32.4% compared with the
1997  first  quarter.    Property  and  casualty  insurance  operating  income
increased  12.5%, domestic life insurance operating income increased 75.6% and
international  operating  income  increased  95.7%.  The increase in operating
income  is  primarily  related  to  increases  in  professional  services  and
outsourcing  revenues.

OTHER  INCOME  AND  EXPENSE

     Interest expense decreased 23.8% for the first quarter 1998 compared with
the  first  quarter of 1997, principally due to lower levels of borrowed funds
under  the  Company's  credit  facility.    The  average nominal interest rate
applicable  to borrowings under the Company's credit facility during the first
quarter  of  1998  was  5.9%.

INCOME  TAXES

     The  effective income tax rate (income taxes expressed as a percentage of
pre-tax  income) was 37.7% and 37.6% for the three months ended March 31, 1998
and  1997, respectively.  The effective rate for the first quarter of 1998 is
higher  than the federal statutory rate principally due to the effect of state
and  local  income  taxes.

DISCONTINUED  OPERATIONS

     Income from operations of the discontinued operations decreased 33.9% for
the  first  quarter  1998 compared with the first quarter of 1997, principally
due  to  1997  results  including  the  discontinued  property   and  casualty
information  services  segment,  which was sold in August 1997, as well as the
discontinued  life  information  services  business.  1998 results include the
discontinued  life  information  services  segment  only.

                        LIQUIDITY AND CAPITAL RESOURCES
March 31, December 31,
                                 1998       1997
--------------------------------------------------
                             (Dollars in Millions)
Cash and equivalents, marketable
  securities, and investments. .  $ 28.0   $ 46.5
Current assets . . . . . . . . .   176.4    185.8
Current liabilities. . . . . . .    80.6     86.2
Working capital. . . . . . . . .    95.8     99.6
Long-term debt . . . . . . . . .    19.4     37.7
Three Months Ended
                                            March 31,
                                          1998     1997
---------------------------------------------------------
                                    (Dollars in Millions)
Cash provided by operations . . . . . . $ 20.8   $ 17.6 
Cash used for investing activities. . .  (20.4)   (21.7)
Cash used for financing activities. . .  (12.7)    (8.2)
The   Company's  current   ratio  (current  assets  divided   by  current
liabilities)  stood  at  2.2  at  March 31, 1998, which management believes is
sufficient  when  combined  with  the available credit facility to provide for
day-to-day operating needs and the flexibility to take advantage of investment
opportunities.  The Company has available (net of amounts outstanding at March
31,  1998)  $181  million  under  its $200 million credit facility.  Also, the
Company  has  available  (net  of amounts outstanding at March 31, 1998) $10.5
million  under its $15 million uncommitted operating line of credit with which
it  may  choose  to  fund  temporary  operating  cash  needs.

     During  the  three  months  ended  March 31, 1998 the Company capitalized
software  development  costs  of  $14.9  million,  principally  related to the
development of its S3+ client/server property and casualty software, CyberLife
object-oriented  client/server  life  insurance  software,  and
INSURE/90   international  property  and  casualty  solution as well as other
ongoing  projects  for  other  domestic  as  well  as  international products.

     Significant expenditures anticipated for the remainder of 1998, excluding
any  possible  business  acquisitions  or  common  stock  repurchases,  are as
follows:  acquisition of data processing and communications equipment, support
software,  buildings, building improvements and office furniture, fixtures and
equipment  and costs relating to the internal development of software systems.

     The  Company has historically used the cash generated from operations for
development  and  acquisition  of  new products, acquisition of businesses and
repurchase  of  the Company's stock.  The Company anticipates that, subject to
market  conditions, it will continue to use its cash for all of these purposes
in  the  future  and  that projected cash from operations will be able to meet
presently  anticipated needs; however, the Company may also consider incurring
debt, as discussed above, as needed to accomplish specific objectives in these
areas  and  for  other  general  corporate  purposes.

                    FACTORS THAT MAY AFFECT FUTURE RESULTS

     The  Company's  operating results and financial condition can be impacted
by  a  number of factors, including, but not limited to, the following, any of
which  could  cause  actual  results  to  vary  materially  from  current  and
historical  results  or  the  Company's  anticipated  future  results:

-          Currently, the Company's business is focused principally within the
global property and casualty and life insurance and related financial services
industries;

-     There is increasing competition for the Company's products and services;

-       The market for the Company's products and services is characterized by
rapid  changes  in  technology;

-     Contracts with governmental agencies involve a variety of special risks,
including  the  risk  of early contract termination by the governmental agency
and  changes  associated  with  newly  elected  state administrations or newly
appointed  regulators;

-      The timing and amount of the Company's revenues are subject to a number
of  factors, including, but not limited to, the timing of customers' decisions
to  enter  into  large  license  agreements  with  the  Company;

-          Unforeseen  events  or  adverse  economic  or  business  trends may
significantly  increase  cash  demands  beyond  those currently anticipated or
affect  the  Company's  ability  to  generate/raise  cash to satisfy financing
needs;
-       The Company's operations have not proven to be significantly seasonal,
although  quarterly  revenues and net income can be expected to vary at times;

-          Although  the  Company  cannot  accurately  determine  the  amounts
attributable  thereto,  the  Company  has  been  affected by inflation through
increased  costs  of  employee  compensation  and  other  operating  expenses.

-      Many of the Company's current and potential customers are or will spend
significant  amounts  of  money  to  make  their  existing information systems
capable  of  handling  the  year  2000.

     The  preparation  of  financial  statements  in conformity with generally
accepted  accounting  principles  requires  management  to  make estimates and
assumptions  that  affect  the  reported amounts of assets and liabilities and
disclosure  of  contingent assets and liabilities at the date of the financial
statements,  as  well  as the reported amounts of revenues and expenses during
the  reporting  period.  Changes  in the status of certain matters or facts or
circumstances  underlying  these estimates could result in material changes in
these  estimates,  and  actual  results  could  differ  from  these estimates.

     Because  of the foregoing factors, as well as other factors affecting the
Company's   operating  results,  past  financial  performance  should  not  be
considered  to  be  a  reliable indicator of future performance, and investors
should  not  use  historical  trends to anticipate results or trends in future
periods.

YEAR 2000 READINESS

     Many  existing  computer programs were designed to use only two digits to
identify  a  year  in date fields.  If not corrected, these applications could
fail or produce erroneous results when working with dates in the Year 2000 and
beyond. This Year 2000 issue may potentially affect the Company in four areas:
its  product  offerings, its  services  offerings, third-party  products  used
internally, and its suppliers.  The Company's various business units have been
responsible for  the  assessment,  remediation,  validation and implementation
of Year 2000 corrective actions.

     The  application  code  of  the Company's primary product offerings, S3+,
Series  II,  INSURE/90,  POINT , CyberLife  and  CYBERTEK CK/4  products, were
either  initially  designed  or have been updated in their currently available
releases  to be capable of processing and storing date data with dates in both
the  twentieth  (1900's)  and twenty-first (2000's) centuries.  The Company is
currently conducting an inventory and verifying the Year 2000 readiness of the
third-party  products  with  which  these Company applications are designed to
operate in order to validate that no unanticipated Year 2000 issues exist.  In
addition,  the  Company  also is in the process of conducting an inventory and
assessing  other  Company  and third-party products previously licensed by the
Company to customers to determine if any renovation efforts may be required in
relation  to  these  products.
In  its  services  offerings, the Company has assessed and commenced Year 2000
remediation of the applications used in processing the data of its Information
Technology  Outsourcing  and  Business Process Outsourcing services customers.
Some  of  these remediation efforts are complete and some are still in various
stages  of coding, testing or implementation.  The Company intends to complete
these  Year 2000 remediation efforts and required testing, in a Year 2000 test
environment,  prior  to  the need for these services to process data involving
dates  in  the  twenty-first  century.

     The  primary  third-party  products  used by the Company for its internal
operation  include  its  data center hardware and software, internal financial
systems,  and  network and PC hardware and software.  The Company's Blythewood
data  center  has  completed  its  hardware  and  operating software inventory
assessments  and  has  substantially  completed  the  remediation  efforts  of
updating  these  hardware  and software assets for the Year 2000 requirements.
The  Company's  Australian and European data centers also have completed their
inventory  assessment and are implementing the hardware and operating software
enhancements  required  for  Year  2000  remediation.

     In  1996, the Company commenced the process of identifying, selecting and
implementing  an  enterprise  wide  financial  and  human  resources system to
replace  its  existing  systems.    The  selected  solution is currently being
implemented,  is  designed to meet Year 2000 requirements, and is scheduled to
be  operational at the end of 1998.  In addition, the Company is commencing an
inventory  and  assessing  all  of its network and PC hardware and software to
determine  if  any  Year  2000  remediation  upgrades  will  be  required.

     Finally,  the  primary  suppliers  upon  whom  the Company's services are
dependent are electric utility and telephone companies who provide services to
the  Company's  various  offices  and  data  centers.    If these services are
interrupted  for  a prolonged period due to the suppliers' Year 2000 problems,
it  will  disrupt  the Company's ability to provide its services to customers,
notwithstanding the backup battery and diesel power supplies available for the
data  center  locations.

     As discussed above, the Company has not yet fully completed its Year 2000
evaluations  or  its remediation efforts.  If such remediation efforts are not
completed  on a timely basis, Year 2000 issues could have a material impact on
the  Company's  operations  and  financial  results.   However, based upon the
Company's  experience  to  date,  at this time, it is not anticipated that the
completion  of  remaining  Year  2000 remediation efforts will have an adverse
material   effect   upon  the  Company's  financial  position  or  results  of
operations.

SAFE  HARBOR  STATEMENT  UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:  Statements in this report that are not descriptions of historical facts
may be forward-looking statements that are subject to risks and uncertainties,
including  economic,  competitive  and  technological  factors  affecting  the
Company's operations, markets, products, services and prices, as well as other
specific  factors  discussed  in the Company's filings with the Securities and
Exchange  Commission.  These  and  other  factors  may cause actual results to
differ  materially  from  those  anticipated.
PART II
                               OTHER INFORMATION

                     POLICY MANAGEMENT SYSTEMS CORPORATION

ITEM  1.    LEGAL  PROCEEDINGS

     See Note 3, Contingencies, of Notes to Consolidated Financial Statements,
which  is  incorporated  by  reference  in  this  Item.

ITEMS  2,  3,  4  AND  5  are  not  applicable

ITEM  6.    EXHIBITS  AND  REPORTS  ON  FORM  8-K.

Exhibits

     Exhibits required to be filed with this Quarterly Report on Form 10-Q are
listed  in  the  following  Exhibit  Index.

Reports  on  Form  8-K

     The Company did not file any reports on Form 8-K during the quarter ended
March  31,  1998.
POLICY MANAGEMENT SYSTEMS CORPORATION

                                  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.

                     POLICY MANAGEMENT SYSTEMS CORPORATION
                     -------------------------------------
                                 (Registrant)

Date:    May  12,  1998          Timothy  V.  Williams
                                 Executive  Vice  President
                                 (Chief  Financial  Officer)
POLICY MANAGEMENT SYSTEMS CORPORATION
                                 EXHIBIT INDEX

Exhibit
Number

3.          ARTICLES  OF  INCORPORATION  AND  BY-LAWS

A.      Bylaws of the Company, as amended through July 19, 1994, incorporating
all amendments thereto subsequent to December 31, 1993 (filed as an Exhibit to
Form  10-K for the year ended December 31, 1994, and is incorporated herein by
reference)

B.        Articles of Incorporation of the Company, as amended through October
13, 1994, incorporating all amendments thereto subsequent to December 31, 1993
(filed as an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

4.          INSTRUMENTS  DEFINING  THE  RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES

A.       Specimen forms of certificates for Common Stock of the Company (filed
as  an Exhibit to Registration Statement No. 2-74821, dated December 16, 1981,
and  is  incorporated  herein  by  reference)

B.        Articles of Incorporation of the Company, as amended through October
13, 1994, incorporating all amendments thereto subsequent to December 31, 1993
(filed as an Exhibit to Form 10-K for the year ended December 31, 1994, and is
incorporated  herein  by  reference)

10.          MATERIAL  CONTRACTS

A.      Policy Management Systems Corporation 1986 Stock Option Plan (filed as
an  Exhibit  to  Form  10-K  for  the  year  ended  December  31, 1986, and is
incorporated  herein  by  reference)

B.          Conformed  copy  of  Development  and  Marketing Agreement between
International  Business  Machines  Corporation  and  Policy Management Systems
Corporation, dated July 26, 1989 (File No. 0-10175 - filed under cover of Form
SE  filed  on  September  29,  1989,  and is incorporated herein by reference)

C.      Policy Management Systems Corporation 1989 Stock Option Plan (File No.
0-10175  - filed under cover of Form SE on March 22, 1991, and is incorporated
herein  by  reference)

D.          Deferred  Compensation Agreement with G. Larry Wilson (filed as an
Exhibit to Form 10-K for the year ended December 31, 1993, and is incorporated
herein  by  reference)

E.       Employment Agreement with Stephen G. Morrison (filed as an Exhibit to
Form  10-Q for the quarter ended March 31, 1994, and is incorporated herein by
reference)
F.       Stock Option/Non-Compete Agreement with Stephen G. Morrison (filed as
an  Exhibit  to  Form  10-Q  for  the  quarter  ended  March  31, 1994, and is
incorporated  herein  by  reference)

G.      Shareholders' Agreement, dated April 26, 1994, among Policy Management
Systems  Corporation,  General Atlantic Partners 14, L.P. and GAP Coinvestment
Partners (filed as an Exhibit to Form 10-Q for the quarter ended September 30,
1994,  and  is  incorporated  herein  by  reference)

H.          Registration  Rights Agreement, dated April 26, 1994, among Policy
Management  Systems  Corporation,  General  Atlantic Partners 14, L.P. and GAP
Coinvestment  Partners (filed as an Exhibit to Form 10-Q for the quarter ended
September  30,  1994,  and  is  incorporated  herein  by  reference)

I.       Employment Agreement with Timothy V. Williams (filed as an Exhibit to
Form  10-K for the year ended December 31, 1994, and is incorporated herein by
reference)

J.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed as an Exhibit to Form 10-Q for the quarter ended September 30,
1992,  and  is  incorporated  herein  by  reference)

K.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed as an Exhibit to Form 10-Q for the quarter ended September 30,
1994,  and  is  incorporated  herein  by  reference)

L.        Stock Option Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed  as  an  Exhibit  to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

M.     Policy Management Systems Corporation 1993 Long-Term Incentive Plan for
Executives  (filed  as an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

N.     First Amendment to the Policy Management Systems Corporation 1989 Stock
Option  Plan (filed as an Exhibit to Form 10-K for the year ended December 31,
1994,  and  is  incorporated  herein  by  reference)

O.          Fourth Amendment to the Policy Management Systems Corporation 1989
Stock  Option  Plan  (filed  as an Exhibit to Form 10-Q for the quarter ending
March  31,  1995,  and  is  incorporated  herein  by  reference)

P.          Second  and  Third  Amendments  to  the  Policy Management Systems
Corporation  1989  Stock  Option  Plan (filed as Exhibits to Form 10-Q for the
quarter  ended  June  30,  1995,  and  is  incorporated  herein  by reference)
Q.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer (filed as an Exhibit to Form 10-Q for the quarter ended June 30, 1995,
and  is  incorporated  herein  by  reference)

R.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed  as  an Exhibit to Form 10-K for year ended December 31, 1995,
and  is  incorporated  herein  by  reference)

S.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed  as  an Exhibit to Form 10-K for year ended December 31, 1995,
and  is  incorporated  herein  by  reference)

T.        Stock Option/Non-Compete Agreement Amendment No. 1 dated November 8,
1995,  to Stock Option/Non-Compete Agreement dated July 20, 1995, with Paul R.
Butare (filed as an Exhibit to Form 10-K for year ended December 31, 1995, and
is  incorporated  herein  by  reference)

U.          Stock  Option/Non-Compete Agreement with Timothy V. Williams dated
February 1, 1994 (filed as an Exhibit to Form 10-K for year ended December 31,
1995,  and  is  incorporated  herein  by  reference)

V.       Stock Option/Non-Compete Agreement with Timothy V. Williams dated May
10,  1995  (filed as an Exhibit to Form 10-K for year ended December 31, 1995,
and  is  incorporated  herein  by  reference)

W.          Registration Rights Agreement, dated March 8, 1996, between Policy
Management  Systems  Corporation and Continental Casualty Company (filed as an
Exhibit to Form 10-Q for the quarter ended March 31, 1996, and is incorporated
herein  by  reference)

X.       Shareholders Agreement dated March 8, 1996, between Policy Management
Systems  Corporation  and Continental Casualty Company (filed as an Exhibit to
Form  10-Q for the quarter ended March 31, 1996, and is incorporated herein by
reference)

Y.        Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer (filed as an Exhibit to Form 10-Q for the quarter ended June 30, 1996,
and  is  incorporated  herein  by  reference)

Z.       Employment Agreement Form dated November 7, 1996, for Messrs. Butare,
Morrison  and  Williams  together  with a schedule identifying particulars for
each  executive  officer  (filed  as  an  Exhibit  to Form 10-K for year ended
December  31,  1996,  and  is  incorporated  herein  by  reference)
AA.          Stock Option/Non-Compete Agreement with Stephen G. Morrison dated
October 22, 1996 (filed as an Exhibit to Form 10-K for year ended December 31,
1996,  and  is  incorporated  herein  by  reference)

BB.          Stock Option/Non-Compete Form Agreement dated January 8, 1997 for
named  executive officers together with a schedule identifying particulars for
each executive officer (filed as an Exhibit to Form 10-Q for the quarter ended
March  31,  1997,  and  is  incorporated  herein  by  reference)

CC.        Annual Bonus Program for Executive Officers (filed as an Exhibit to
Form  10-Q for the quarter ended March 31, 1997, and is incorporated herein by
reference)

DD.          Form of Amendment No. 1 to the Employment Agreements with Messrs.
Butare,  Morrison  and  Williams,  together   with  a   schedule   identifying
particulars  for  each executive officer (filed as an Exhibit to Form 10-Q for
the  quarter  ended  June  30,  1997, and is incorporated herein by reference)

EE.     Form of Employment Agreements with Messrs. Wilson, Bailey and Coggiola
together  with  schedule  identifying  particulars  for each executive officer
(filed  as  an  Exhibit to Form 10-Q for the quarter ended September 30, 1997,
and  is  incorporated  herein  by  reference)

FF.       Credit Agreement dated as of August 8, 1997, among Policy Management
Systems  Corporation,  the  Guarantors  Party hereto, Bank of America National
Trust and Savings Association and the Other Financial Institution Party Hereto
(filed  as  an  exhibit to Form 10-Q for the quarter ended September 30, 1997,
and  is  incorporated  herein  by  reference)

GG.     Employment Agreement dated January 1, 1998, and Addendum No. 1 thereto
dated  January  26, 1998, with Donald A. Coggiola (filed as an exhibit to Form
10-K  for  the  year  ended  December  31,  1997 and is incorporated herein by
reference)

HH.       Stock Option/Non-Compete Form Agreement for named executive officers
together  with  a  schedule  identifying  particulars for each named executive
officer  (filed  herewith)

27.          FINANCIAL  DATA  SCHEDULES

A.        Three Months Ended March 31, 1998 filed herewith (EDGAR version only)

B.         Three Months Ended March 31, 1997, as restated, filed herewith (EDGAR
version  only)