As filed with the Securities and Exchange Commission on October 28, 1996
                                               Registration No. 333-
--------------------------------------------------------------------------

                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
                      ---------------------------------
                                      
                                  FORM S-8
                           REGISTRATION STATEMENT
                                    UNDER
                         THE SECURITIES ACT OF 1933
                     -----------------------------------

Incorporated          AMERICAN FINANCIAL GROUP, INC.        I.R.S. Employer
Under the Laws           ONE EAST FOURTH STREET             Identification No.
of Ohio                  CINCINNATI, OHIO 45202             31-1422526

                       AMERICAN FINANCIAL GROUP, INC.
                         RETIREMENT AND SAVINGS PLAN
                 ------------------------------------------
                                      
                           James C. Kennedy, Esq.
                     Deputy General Counsel & Secretary
                       American Financial Group, Inc.
                           One East Fourth Street
                           Cincinnati, Ohio  45202
                               (513) 579-2538
                       (Agent for Service of Process)

                          CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                     <C>                  <C>               <C>                <C>
                                             Proposed          Proposed
                                             Maximum           Maximum
Title of                Amount               Offering          Aggregate          Amount of
Securities              To Be                Price             Offering           Registration
To Be Registered        Registered (1)       Per Share (2)     Price (2)          Fee(3)
-----------------------------------------------------------------------------------------------

Common Stock,           500,000              $34.5625          $17,281,250           $5,960.00
par value $1.00         Shares
per share

(1)    This  Registration  Statement  is  filed  for  up  to  500,000  shares
       issuable  pursuant  to  the American Financial  Group  Retirement  and
       Savings Plan.

(2)    Estimated solely for purposes of calculating the registration fee.

(3)    The  registration  fee  has been calculated pursuant  to  Rule  457(h)
       based  on  the average of the high and low prices of the Common  Stock
       as  reported  on the New York Stock Exchange on October  22,  1996  of
       $34.5625 per share.
</TABLE>

                             Page 1 of 48 Pages
                           Exhibit Index on Page 3


                                   PART II

             INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.Incorporation of Documents by Reference

       The  following documents filed by American Financial Group, Inc.  (the
"Company"  or  "Registrant") with the Securities and Exchange Commission  are
incorporated herein by reference and made a part hereof:

       
       1.     The  Company's  Annual Report on Form 10-K for the  year  ended
              December 31, 1995;

       2.     The  Company's Quarterly Reports on Form 10-Q for the  quarters
              ended March 31, 1996 and June 30, 1996;
       
       3.     The  Company's  Current Reports on Form 8-K dated February  12,
              1996, September 20, 1996 and October 21, 1996; and

       4.     The  description of the Company's Common Stock contained in the
              Registration  Statement on Form 8-B filed on  April  17,  1995
              under the Securities Exchange Act of 1934.

       All  reports  and  other documents filed by the  Company  pursuant  to
Sections  13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of  1934,
prior  to  the filing of a post-effective amendment which indicates that  all
Common Stock offered has been sold or which deregisters all Common Stock then
remaining  unsold,  shall be deemed to be incorporated by reference  in  this
Registration Statement and to be a part hereof from the date of  filing  such
documents.

Item 4.  Description of Securities

       Not applicable.

Item 5.  Interests of Named Experts and Counsel

       The  legality of the Common Stock offered hereby will be  passed  upon
for  the  Company  by  Karl  J. Grafe, Esq., Assistant  General  Counsel  and
Assistant  Secretary of the Company.  Mr. Grafe beneficially owns 485  shares
of the Company's Common Stock.

Item 6.  Indemnification of Directors and Officers

       Ohio  Revised Code Section 1701.13(E), allows indemnification  by  the
Registrant  to  any  person made or threatened to be  made  a  party  to  any
proceedings, other than a proceeding by or in the right of the Registrant, by
reason  of the fact that such person is or was a director, officer,  employee
or  agent of the Registrant, against expenses, including judgment and  fines,
if  such person acted in good faith and in a manner reasonably believed to be
in  or  not opposed to the best interests of the Registrant and, with respect
to  criminal actions, in which such person had no reasonable cause to believe
that  such conduct was unlawful.  Similar provisions apply to actions brought
by or in the right of the Registrant, except that no indemnification shall be
made in such cases when the person shall have been adjudged to be liable  for
negligence  or  misconduct to the Registrant unless deemed otherwise  by  the
court.   Indemnifications are to be made by a majority vote of  a  quorum  of
disinterested directors or the written opinion of independent counsel  or  by
the  shareholders  or  by the court.  The Registrant's  Code  of  Regulations
extends such indemnification.


                                    - 2 -
<PAGE>
       The  Registrant  maintains,  at its expense,  Directors  and  Officers
Liability  and Company Reimbursement Liability Insurance.  The Directors  and
Officers  Liability portion of such policy covers all directors and  officers
of  the  Registrant and of the companies which are, directly  or  indirectly,
more  than  50% owned by the Registrant.  The policy provides for payment  on
behalf  of  the  directors and officers, up to the policy  limits  and  after
expenditure of a specified deductible, all Loss (as defined) from claims made
against  them  during  the  policy period for defined  wrongful  acts,  which
include errors, misstatements or misleading statements, acts or omissions and
neglect or breach of duty by directors and officers in the discharge of their
individual or collective duties as such.  The insurance includes the cost  of
investigations and defenses, appeals and bonds and statements and  judgments,
but  not fines or penalties imposed by law.  The insurance does not cover any
claim arising out of acts alleged to have been committed prior to October 24,
1978.  The insurer limit of liability under the policy is $50,000,000 in  the
aggregate  for  all  losses  each  year subject  to  certain  individual  and
aggregate  deductibles.  The policy contains various exclusions and reporting
requirements.

       The  Registrant also has entered into indemnification agreements  with
its  executive  officers and directors providing for indemnification  against
certain liabilities to the fullest extent provided by Ohio law.

Item 7.  Exemption from Registration Claimed

       Not applicable.

Item 8.  Exhibits

        4     American Financial Group Retirement and Savings Plan

        5     Opinion of Karl J. Grafe, Esq.

       23.1   Consent of Karl J. Grafe, Esq. (contained on Exhibit 5).

       23.2   Consent of Independent Auditor

       23.3   Consent of Independent Auditor

       24     Powers of Attorney (contained on the signature page).

Item 9. Undertakings

       9.1     The  undersigned Registrant hereby undertakes to  file  during
any  period  in  which  offers  or sales are  being  made,  a  post-effective
amendment  to  this  Registration Statement (i)  to  include  any  prospectus
required  by Section 10(a)(3) of the Securities Act of 1933, (ii) to  reflect
in  the  prospectus any facts or events arising after the effective  date  of
this  Registration  Statement  (or the most recent  post-effective  amendment
thereof)  which,  individually or in the aggregate, represent  a  fundamental
change   in  the  information  set  forth  in  this  Registration  Statement.
Notwithstanding  the  foregoing,  any  increase  or  decrease  in  volume  of
securities  offered (if) the total dollar value of securities  offered  would
not  exceed that which was registered) and any deviation from the low or high
end  of the estimated maximum offering range may be reflected in the form  of
prospectus  filed  with the Commission pursuant to Rule  424(b)  if,  in  the
aggregate, the changes in volume and price represent no more than 20%  change
in  the  maximum  aggregate offering price set forth in the  "Calculation  of
Registration Fee" table in the effective Registration Statement and (iii)  to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change  to
such  information in the Registration Statement; provided, however, that  (i)
and (ii) shall not apply if the information required to be included in a post-
effective amendment is

                                    - 3 -
<PAGE>
contained in periodic reports filed by the Registrant pursuant to Section  13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this Registration Statement.


       9.2     The  undersigned Registrant hereby undertakes  that,  for  the
purpose  of determining any liability under the Securities Act of 1933,  each
such  post-effective  amendment shall be deemed  to  be  a  new  Registration
Statement  relating to the securities offered therein, and  the  offering  of
such  securities  at that time shall be deemed to be the  initial  bona  fide
offering thereof.

       9.3     The  undersigned Registrant hereby undertakes to  remove  from
registration  by  means of a post-effective amendment any of  the  securities
being registered which remain unsold at the termination of the offering.

       9.4      The  undersigned  Registrant  hereby  undertakes  that,   for
purposes of determining any liability under the Securities Act of 1933,  each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d)  of  the  Securities  Exchange Act of  1934  that  is  incorporated  by
reference  in  the  Registration Statement  shall  be  deemed  to  be  a  new
registration  statement relating to the securities offered therein,  and  the
offering  of  such securities at that time shall be deemed to be the  initial
bona fide offering thereof.

       9.5     Insofar as indemnification for liabilities arising  under  the
Securities  Act  of  1933  may  be  permitted  to  directors,  officers   and
controlling  persons of the Registrant pursuant to the foregoing  provisions,
or  otherwise,  the Registrant has been advised that in the  opinion  of  the
Securities  and  Exchange Commission such indemnification is  against  public
policy  as  expressed  in the Act and is, therefore, unenforceable.   In  the
event  that a claim for indemnification against such liabilities (other  than
the  payment  by the Registrant of expenses incurred or paid by  a  director,
officer or controlling person of the Registrant in the successful defense  of
any  action,  suit, or proceeding) is asserted by such director,  officer  or
controlling  person in connection with the securities being  registered,  the
Registrant  will, unless in the opinion of its counsel the  matter  has  been
settled   by   controlling  precedent,  submit  to  a  court  of  appropriate
jurisdiction  the  question whether such indemnification  by  it  is  against
public  policy  as  expressed in the Act and will be governed  by  the  final
adjudication of such issue.
       
       



















                                    - 4 -

                                 SIGNATURES

       Pursuant  to  the  requirements of the Securities  Act  of  1933,  the
Registrant certifies that it has reasonable grounds to believe that it  meets
all  of  the  requirements for filing on Form S-8 and has  duly  caused  this
Registration  Statement  to  be  signed on its  behalf  by  the  undersigned,
thereunto duly authorized, in Cincinnati, Ohio, on October 28, 1996.

                                     AMERICAN FINANCIAL GROUP, INC.


                                     By: Carl H. Lindner
                                         -----------------------------------
                                         Carl H. Lindner
                                         Chairman of the Board and
                                         Chief Executive Officer

       Pursuant  to  the  requirements of the Securities Act  of  1933,  this
Registration  Statement  has  been signed by the  following  persons  in  the
capacities as of the dates indicated.  Persons whose names are marked with an
asterisk  (*)  below hereby designate James C. Kennedy or Karl  J.  Grafe  as
their  attorneys-in-fact to sign all amendments, including any post-effective
amendments, to this Registration Statement.

        Signature           Capacity                          Date
 

 *Carl H. Lindner           Chairman of the Board and Chief   October 28, 1996
 ---------------------      Executive Officer (Principal
 Carl H. Lindner            Executive Officer)

 *Carl H. Lindner III       Director                          October 28, 1996
 ---------------------
 
 *S. Craig Lindner          Director                          October 28, 1996
 ---------------------
 S. Craig Lindner
 
 *Keith E. Lindner          Director                          October 28, 1996
 ---------------------
 Keith E. Lindner
 
*James E. Evans             Director                          October 28, 1996
 ---------------------
 James E. Evans
 
 *Thomas M. Hunt            Director                          October 28, 1996
 ---------------------
 Thomas M. Hunt
 
 *William R. Martin         Director                          October 28, 1996
 ---------------------
 William R. Martin
 
 Fred J. Runk              Senior Vice President and          October 28, 1996
 ---------------------     Treasurer (Principal Accounting
 Fred J. Runk              Officer and Principal Financial
                           Officer)
 
 
                                    - 5 -

<PAGE>
                                                                   EXHIBIT 4
                            AMERICAN FINANCIAL GROUP

                          RETIREMENT AND SAVINGS PLAN


       This  document  describes the American Financial Group Retirement  and
Savings  Plan  (the  "AFG RASP" or the "RASP").  The AFG RASP  offers  a  tax
advantaged  means  by which eligible employees of American  Financial  Group,
Inc.  (the  "Company"  or  "AFG")  and  its  participating  subsidiaries  may
accumulate  capital  on a regular and long-term basis  for  their  retirement
income needs.

       This  Prospectus  relates to 500,000 shares of  the  Company's  Common
Stock,  $1.00  par value (the "AFG Common Stock"), which may be purchased  by
the Trustee under the RASP.  AFG Common Stock may be purchased for the RASP's
AFG  Common Stock Fund.  AFG Common Stock is registered on the New York Stock
Exchange.

       Additional  information regarding the AFG RASP and its  administrators
may  be  obtained by contacting the Company or the Plan Administrator at  the
Company's  principal  executive offices, One East Fourth Street,  Cincinnati,
Ohio  45202, attention:  Human Resources.  The Company's telephone number  is
(513) 579-2121.


                    THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
                         SECURITIES THAT HAVE BEEN REGISTERED UNDER THE
                                    SECURITIES ACT OF 1933.


       This document is also the Summary Plan Description of the Plan
   under the Employee Retirement Income Security Act of 1974, as amended.


                                     Dated January 1, 1997


                                    - 6 -
       <PAGE>
I.     GENERAL INFORMATION

       The  AFG  RASP  was established by the Company, effective  January  1,
1997, to offer you and other employees a way to develop personal savings  for
retirement  and  to  provide an opportunity to make various  investments  for
retirement,  including investment in AFG Common Stock.  The  AFG  RASP  is  a
consolidation of the following plans:

       -      American      Financial     Corporation     Employee      Stock
               Ownership/Retirement Plan ("AFC ESORP");

       -      American  Financial Corporation 401(k) Retirement Savings  Plan
               ("AFC 401(k) Plan");

       -      American  Premier  Employee  Stock  Ownership  Retirement  Plan
               ("APU ESORP");

       -      American Premier Retirement and Savings Plan ("Staff RASP");

       -      American  Premier  Group Retirement and  Savings  Plan  ("Group
               RASP");

       -      Profit  Sharing  Retirement Plan and Trust of  Leader  National
               Corporation ("Leader Plan");  and

       -      Transport  Companies Employees' Profit Sharing  and  Retirement
               Plan ("Transport Plan").

       These  plans  are sometimes collectively referred to in this  document
as the "Consolidated Plans".

       The  AFG  RASP is designed to qualify as a contributory profit sharing
plan  under Sections 401(a) and 401(k) of the Internal Revenue Code  of  1986
(the  "Code").  This permits you to defer receipt of, and income taxes on,  a
portion  of cash compensation by having it contributed to the RASP.  See  the
Section  on  Tax Effects of Participation in the Plan.  The  AFG  RASP  is  a
"defined
       
                                    - 7 -
<PAGE>
contribution" type of plan under the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").  See the Section on Rights under ERISA.

       This  document  does not describe completely all of the provisions  of
the  RASP.   In  the  case of any conflict or apparent conflict  between  the
following description of the RASP and the full text of the AFG RASP, the Plan
Document   will control.  Copies of the Plan Document are available from  the
Plan Administrator, and will be provided to you upon written request.

II.    ADMINISTRATION

       A.     Employers

       Employees  of  the  Company  and  certain  of  its  subsidiaries   may
participate in the AFG RASP.  The Company and each of these subsidiaries  are
sometimes  referred  to  as  an "Employer."  A  complete  list  of  Employers
participating  in  the  AFG RASP may be obtained by written  request  to  the
Company, and is also available for inspection at the Company, at the  address
given on the cover of this document.

       The  Company's  IRS Employer Identification Number is  31-1422526  and
the Plan Identification Number is 001.

       B.     Plan Administrator

       The Plan Administrator is:

                              Administrative Plan Committee
                              American Financial Group, Inc.
                              One East Fourth Street
                              Cincinnati, Ohio  45202
                              (513) 579-2121

       The  AFG RASP is administered by a committee (the "Administrative Plan
Committee"  or  the "Plan Administrator").  The members of the committee  are
selected from time to time by
       
                                    - 8 -
<PAGE>
the  Company's  Board of Directors.  The Administrative  Plan  Committee  may
adopt  rules  and regulations necessary to carry out and administer  the  AFG
RASP  and  has  full power and authority to construe and interpret  the  Plan
Document.   Under  the  AFG  RASP,  decisions  and  determinations   of   the
Administrative  Plan Committee are final and binding on all  parties  to  the
extent permitted by law.

       The  Administrative Plan Committee, in its capacity as a fiduciary  of
the  AFG RASP, has general authority and discretion to manage and control the
assets  of the AFG RASP and to direct the Trustee as to their investment  and
reinvestment to the extent that such decisions are not participant  directed.
The  Administrative Plan Committee is also responsible to select  and  review
the performance of (and change, if necessary,) the investment funds available
under the RASP.  See the Section on Investment of Contributions.

       C.     Plan Trustee

       The  current  trustee  of  the AFG RASP is Wilmington  Trust  Company,
Rodney  Square  North, 1100 North Market Street, Wilmington, Delaware  19890-
0001  (the "Trustee").  The Board of Directors of the Company may remove  the
Trustee and appoint a successor trustee at any time.  The Trustee manages the
assets  of the AFG RASP and, in general, deals with these assets as  directed
by  the Administrative Plan Committee for the retirement account and matching
account and as directed by each participant for all other accounts.

       D.     Plan Records

       The  AFG  RASP  operates on, and all of its records  are  kept  on,  a
calendar  year basis beginning January 1 and ending December 31 of each  year
(a "Plan Year").


                                    - 9 -
<PAGE>
       E.     Service of Process

       The agent for service of process for the AFG RASP is:

                              Corporate Secretary
                              American Financial Group, Inc.
                              One East Fourth Street
                              Cincinnati, Ohio  45202

       Service  of process may also be made on the Trustee or any  member  of
the Administrative Plan Committee.

III.   ELIGIBILITY REQUIREMENTS

       A.     Participants in Consolidated Plans

       If  you  were  a  participant  in any of  the  Consolidated  Plans  on
December 31, 1996, you will continue as a participant in the AFG RASP  as  of
January  1,  1997.    You  must  still  be  employed  by  the  Company  or  a
participating subsidiary of the Company on January 1, 1997 to continue  as  a
participant.  If you are an employee  who was eligible as a participant  only
in  the  401(k) portion of the Group RASP, you will continue as a participant
in the  AFG RASP for purposes of 401(k) savings only and will become eligible
for the retirement account contribution as described below.

       B.     Other Participants

       Participants on January 1, 1997.  Subject to the exceptions below,  if
you  (i)  were not a participant in any of the Consolidated Plans, (ii)  have
completed  one  year  of  service (or for purposes  of  401(k)   savings  and
matching  contributions, 90 days of service) as of January 1,1997, and  (iii)
are  employed by the Company or a participating subsidiary of the Company  on
that date, you will be eligible to participate on January 1, 1997.

       Eligibility  for  401(k) Savings and Matching Contributions.   Subject
to  the exceptions below, you will become eligible to participate in the  AFG
RASP for 401(k) savings and matching
       
       
                                   - 10 -
<PAGE>
contributions as soon as administratively feasible after completing 90 days
of service with the Company or a participating subsidiary of the Company (and
you are still employed on that date).

       Eligibility  for  Retirement Account Contributions.   Subject  to  the
exceptions  below, you will become eligible to participate in  the  AFG  RASP
for  retirement account contributions on the
January 1 or July 1 after completing one year of service with the Company  or
a  participating  subsidiary  of the Company (and you are still  employed  on
that date).

       Notwithstanding  the above, if you were hired on  or  before  December
31,  1996 and you were a participant from the Republic Plan, you will  become
eligible  to participate in the RASP for retirement account contributions  on
the  first January 1, April 1, July 1 or October 1 after completing one  year
of service with the Company or a participating subsidiary.

       Eligibility  for  Rollover Contributions.  Subject to  the  exceptions
below,  you  will be eligible to make a rollover contribution before  meeting
the  service  requirements, if you would otherwise be eligible to participate
in the RASP.

       Service.   "Service" is determined in completed years and  days,  with
each  consecutive  12-  month period beginning  on  your  date  of  hire  and
anniversaries  thereof constituting one year of service.  In addition,   each
consecutive  90 day period beginning on your date of hire are  considered  90
days  of  service  for purposes of making 401(k) contributions.   Periods  of
employment  with an Employer or a subsidiary, including periods during  which
you were considered eligible under the Consolidated Plans prior to January 1,
1997, will be recognized as service for the AFG RASP.

       Excluded  Employees.  You are not eligible to participate in  the  AFG
RASP if:

       -      you  are  included  in  a  unit  of  employees  covered  by   a
               collective  bargaining agreement if retirement  benefits  were
               the  subject  of  good faith bargaining between  the  employee
               representatives and the Employer;

                                   - 11 -
<PAGE>
       -      you are not a United States citizen or resident alien;

       -      you are a "leased employee" (as defined in the Plan Document);

       -      you are self-employed; or
       
       -      you  are covered by another qualified retirement plan sponsored
               by the Company or a subsidiary of the Company.

IV.    ENROLLMENT AND PARTICIPATION IN THE PLAN

       If  you are an eligible employee, you will become a participant in the
AFG  RASP and may begin making 401(k) contributions by following the election
procedures set forth in the Section below on 401(k) Contributions.   Even  if
you do not make 401(k) contributions,  you will automatically be eligible  to
receive  an  Employer contribution to the retirement account upon eligibility
to  participate in the AFG RASP (as described above by completing a  year  of
service).

       You  may  continue participation in the AFG RASP  until you  terminate
employment  with  all Employers.  If you are a former employee  (including  a
former participant from any of the Consolidated Plans), you will continue  as
a Member of the RASP for as long as you maintain an account.  If you transfer
to  a  non-participating Employer, you will not be eligible  to  receive  any
further   Employer  contributions,  make  salary  deferrals  or   receive   a
distribution from the AFG RASP, as long as you are in active service.

V.     CONTRIBUTIONS AND ACCOUNTS

       A.     Employer Contributions

       General.   All  retirement  account contributions  made  on  or  after
January  1,  1997 are required to be invested primarily in the AFG Retirement
Fund.   The  AFG  Retirement Fund is invested in AFG  securities  unless  the
Trustee is otherwise directed by the
       
                                   - 12 -
<PAGE>
Administrative Plan Committee (See the Section below on the AFG Retirement
Fund).  All matching contributions to the 401(k) savings account made on or
after January 1, 1997, are required to be invested in the AFG Common Stock
Fund.

       Employer  Retirement Account Contributions.  The Company may,  in  the
discretion  of its Board of Directors, have each Employer make  a  retirement
account  contribution for any Plan Year.  The contribution, if  any,  may  be
made  in cash, in AFG Common Stock or other AFG securities.  The contribution
may  only be made on your behalf if you are actively employed by the Employer
on  the  last  day of that Plan Year.  If you die, retire or become  disabled
during the Plan Year, you are deemed to have been employed on the last day of
the  Plan Year.  The retirement account contribution is allocated to  you  in
proportion to your covered compensation (as described below in the Section on
Participant Contributions).

       Matching  Contributions.  The Company may, in the  discretion  of  its
Board  of  Directors, have each Employer make a  matching contribution.   The
contribution,  if any, may be made  in cash or  in AFG Common Stock  for  any
Plan  Year.  This contribution may be made on your behalf if you made  401(k)
contributions  during  the Plan Year, and you are actively  employed  by  the
Employer  on the last day of that Plan Year.    If you die, retire or  become
disabled  during the Plan Year, you are deemed to have been employed  on  the
last  day of the Plan Year.  Matching contributions will be allocated to your
matching account based on the amount of 401(k) contributions made by you  and
your covered compensation.

       B.     Participant Contributions

       401(k)   Contributions.   You  may  direct  the   Employer   to   make
contributions   from  your  covered  compensation  directly   as   a   401(k)
contribution  on  a pre-tax basis.  Payment of  your 401(k)  contribution  is
made  by  payroll  deduction  with the deducted amounts  contributed  by  the
Employer  to  the AFG RASP on your behalf.  Amounts you defer may  receive  a
matching contribution (see the Section above  on Matching Contributions).
       
                                   - 13 -
       
<PAGE>
               -       Election Procedure.  At any time throughout  the  year
               after  meeting the eligibility requirements, you may elect  to
               make  pre-tax  contributions to your 401(k)  savings  account.
               This election may be changed or stopped at any time.  The Plan
               Administrator  may  make rules and procedures  regarding  this
               election and any changes.
       
       -      Contribution Limit.  You may make 401(k) contributions  of  any
               percent  of your covered compensation in whole percentages  up
               to 13%.  Federal law imposes annual limits on the amounts that
               may  be deferred and these limits may be changed each year  as
               required by law or as determined by the Company.
       
                        -       Covered  Compensation.   The  term   "covered
               compensation"  means  the  amount paid  to  you  for  services
               rendered  as  regular  salary and/or  hourly  wages  including
               overtime   and   bonuses,  but  expense  account   allowances,
               settlement  payments, per diem payments, deferred compensation
               arrangements  and  long-term  incentive  bonus  pay  are   not
               included. Any elective deferrals under the AFG RASP or another
               plan  qualified under Sections 401(k), 125 or 402(h) or  other
               similar types of plans of the Employer are included as covered
               compensation.   Covered compensation does not include  amounts
               paid  before  you  are an eligible participant.   The  maximum
               amount  of covered compensation on which contributions may  be
               based  is limited by law and is subject to adjustment  by  the
               Secretary of the Treasury for increases in the cost of living.

       -      Change  in Rate of Contributions.  You may change the  rate  of
               your 401(k) savings by calling AFG In-Touch at 1-800-458-2387.
               Any  such change will be effective as soon as administratively
               feasible and will only apply to covered compensation  not  yet
               earned as of the date of the change.


                                   - 14 -
<PAGE>
       -      Termination  of  Contributions.   You  may  discontinue  making
               401(k)  contributions to the AFG RASP by calling AFG  In-Touch
               at  1-800-458-2387.   If you stop making 401(k) contributions,
               you   may  begin making contributions again only after calling
               AFG  In-Touch. If you stop making contributions, your existing
               accounts will remain invested as directed by you and  will  be
               held for you under the RASP.

       -      After-Tax  Contributions.  After-tax contributions to the  RASP
               are not permitted.  However, if you are a participant from the
               Staff  RASP  or  the  Group RASP, you  may  have  had  amounts
               transferred from such plan to your after-tax  account  in  the
               AFG RASP.

       -      Rollover  Contributions.   If you  are  a  participant,  or  an
               employee  who  has  not yet satisfied the  Plan's  eligibility
               requirements, but will otherwise be covered by the  AFG  RASP,
               you  may  make a rollover  contribution in cash or AFG  Common
               Stock  to the RASP  with the consent of the Plan Administrator
               and  Trustee  (which  will be granted in  a  nondiscriminatory
               manner).

       C.     Participant Accounts

       You may have the following accounts:

       Retirement  Account  to  which retirement  account  contributions are
allocated.   Included  in  this  account  are  the  amounts  transferred for
participants from the AFC ESORP, the APU ESORP and the Transport  Plan.  You
cannot direct the investment of funds in this account.

       401(k)  Savings  Account  to  which  your  401(k)  contributions  are
allocated.  You direct the investment of funds in this account.


                                   - 15 -
<PAGE>
       Matching   Account  to  which  Employer  matching  contributions   are
allocated.   You  cannot direct the investment of the funds in  this  account
since they are all invested in the AFG Common Stock Fund.   However,  if  you
are a participant from the Staff RASP, the Group RASP or the Leader Plan, you
may  direct  a  portion of the matching contributions  made  for  you  before
January 1, 1997.

       Rollover  Account  to  which  rollover  contributions  are  allocated.
Rollover  contributions may be made by you if you are  a  participant  or  an
employee  who  has  not yet satisfied the eligibility requirements,  but  who
would   otherwise be eligible to be covered by the AFG RASP.  You direct  the
investment of funds in this account.

       Prior  Profit  Sharing Account to which prior profit sharing  accounts
are  transferred  for you if you were a participant in the  Staff  RASP,  the
Group  RASP,  or the Leader Plan.  No future contributions will  be  made  to
this account.  You direct the investment of funds in this account in the same
way as in your prior plan as of December 31, 1996.

       After-Tax  Account  to which after-tax contributions  are  transferred
for you if you were a participant in the Staff RASP or the Group RASP and had
made   after-tax  contributions.   No  future  after-tax  contributions   are
permitted to be made to this account.  You direct the investment of funds  in
this account.

       Retirement Rollover Account to which the retirement rollover  accounts
are  transferred for you if you were a participant in the Staff RASP or   the
Group  RASP.   No  future contributions will be made to  this  account.   You
direct the investment of funds in this account.

       Your  accounts also have allocated to them the proportionate share  of
earnings  (or  losses) and appreciation (or depreciation) of  the  investment
funds  in  which  such  contributions  are  invested.   See  the  Section  on
Investment of Contributions.


                                   - 16 -
<PAGE>
       You  will receive a written statement of the value and status of  your
accounts  under  the AFG RASP  once each calendar quarter  during  each  Plan
Year.

       D.     Limitations on Contributions to the Plan

       Federal  tax  laws limit 401(k) savings and Employer contributions  as
follows:

       401(k)  Contributions.  Your 401(k) savings cannot exceed  limits  set
by  federal  law  in any calendar year.  (See the Section  above  on   401(k)
Contributions.)

       Federal  tax laws also establish formulas for determining the  maximum
percentage  of compensation which may be contributed to the AFG RASP  by  all
participants who are "highly compensated employees".  Amounts contributed  in
excess  of  the limitation are refunded.  In addition, the Company may  limit
the  amount a highly compensated employee may contribute during the  year  in
order to meet these limits.

       Overall Limitations on Contributions to the Plan.  Your annual  401(k)
savings,   Employer  contributions  (including  matching  contributions   and
retirement  contributions) and forfeitures are limited by federal  law.   Any
excess  401(k) savings are returned to you; any excess Employer contributions
or forfeitures are used to reduce contributions for the next Plan Year.

VI.    INVESTMENT OF CONTRIBUTIONS

       A.     Responsibility for Selection of Investment Options

       You  are responsible for allocating among the various investment funds
the  amounts in those accounts which you are entitled to direct.  Neither the
Trustee, the Plan Administrator nor any officer or employee of the Company or
other  Employer may advise you as to the manner in which your accounts should
be  invested.   The fact that an investment fund is available under  the  AFG
RASP  should  not  be  construed as a recommendation for investment  in  that
investment fund.

                                   - 17 -
<PAGE>
       You  should keep in mind that the investment alternatives of  the  AFG
RASP  are  subject  to normal market risks.  The proceeds realized  from  the
investments depend on the prevailing market price at a particular time, which
may be more or less than the amount invested.

       B.     Investment of Participant Contributions

       Participant  contributions to the AFG RASP  may  be  invested  by  the
participant  in  any one or more of the following investment  funds  selected
from time to time by the Plan Administrator:

       U.S. Treasury Fund of America

       Objective:                Seeks  to  protect your savings and  provide
                                 regular  income and liquidity  (the  ability
                                 to convert assets to cash).
       
       About the Fund:           The  fund invests solely in short-term  U.S.
                                 Treasury securities maturing in one year  or
                                 less.   These are direct obligations of  the
                                 U.S. government and therefore backed by  the
                                 government's "full faith and credit"  pledge
                                 to  repay  investors.  To  you,  that  means
                                 repayment  of  principal  and  interest   is
                                 guaranteed by the U.S. government.
       
       Risk vs. Return:          This    fund    is    best   described    as
                                 conservative.    Although  there  is  little
                                 risk  of  the participant losing savings  by
                                 investing  in  this fund,  there  is  little
                                 growth opportunity and higher risk that  the
                                 investment  will  not  sufficiently  outpace
                                 inflation.
       
       Bond Fund of America

       Objective:               Seeks  to  maximize current income (from  the
                                interest  payments made on its  bonds)  while
                                maintaining  liquidity  and  preserving   the
                                participant's savings.
       
                                   - 18 -
       <PAGE>
       About the Fund:          The  fund  invests in a combination of  high-
                                grade  corporate bonds, U.S.  Treasury  bonds
                                and  asset-backed securities.  At times, non-
                                U.S.  bonds  and other lower-rated securities
                                may  also  be  part of the portfolio.   Since
                                the  fund  invests in more than one  type  of
                                security, it has the opportunity to seek  out
                                the   best  values  (generating  the  highest
                                returns)  in the bond market without  risking
                                principal.
       
       Risk vs. Return:         While   still   a   conservative   investment
                                choice,  the Bond Fund of America is actively
                                managed  to offer higher returns than  short-
                                term  bonds.   Because it includes  different
                                types of bonds, this fund is subject to  some
                                price swings.  The risk may be offset by  the
                                greater  growth potential and the  moderately
                                high income it provides.

       American Balanced Fund

       Objective:               Seeks  to  protect your savings  and  provide
                                both   high  current  returns  and  long-term
                                growth opportunity.
       
       About the Fund:          The  fund  invests over 50% of its assets  in
                                U.S.  company  stocks in key sectors  of  the
                                economy,  health, energy, banking,  utilities
                                and  telecommunications.   The  remainder  of
                                the   assets   are  invested  in   high-grade
                                corporate  and government bonds,  convertible
                                securities and cash equivalents.
       
       Risk vs. Return:         With  its mix of asset classes, this fund  is
                                well  diversified.  It's investment  strategy
                                offers moderately higher returns and a  long-
                                term  growth opportunity than the  first  two
                                funds.
       
                                   - 19 -
       <PAGE>
       Seven Seas 500 Index

       Objective:               To  provide investors with income and growth,
                                the  fund invests exclusively in stocks.   It
                                seeks  to  replicate the performance  of  the
                                Standard  and  Poor's  500  Composite   Stock
                                Price  Index,  the most popular benchmark  of
                                stock market performance.
       
       About the Fund:          The  fund  attempts to mirror the performance
                                of  the  stock market as a whole by investing
                                in  the 500 stocks held in the index.   These
                                represent  each  major  sector  of  the  U.S.
                                economy   ,   from   consumer   services   to
                                technology to financial services.
       
       Risk vs. Return:         In  the  short term, this fund's  value  will
                                fluctuate   more  than  the  Balanced   Fund.
                                However,  since only a small portion  of  the
                                fund's  total assets is invested in a  single
                                stock, extreme price swings in any one  stock
                                are  minimized by the overall performance  of
                                all stocks in the fund.

       Fidelity Advisor Growth Fund

       Objective:              Seeks  to  provide  investors  with  long-term
                               capital appreciation.
       
       About the Fund:         The  fund  invests in common stock,  preferred
                               stock  and  securities convertible  to  common
                               stock  of  U.S.  and  international  companies
                               with   above-average  growth  in   sales   and
                               earnings.    In   addition  to  investing   in
                               company  stocks,  the  fund  also  invests  in
                               opportunities such as debt securities.
       
       
                                   - 20 -
       <PAGE>
       Risk vs. Return:        The  fund offers the opportunity for long-term
                               gains.   Since  it  bears the  risk  that  the
                               companies  in  which  it  invests   will   not
                               perform  as  well  as expected,  there  is  no
                               guarantee  of a positive return  or  that  you
                               will not lose any principal.
       
       MFS Emerging Growth Fund

       Objective:               Like  the Fidelity Advisor Growth Fund,  this
                                fund   seeks  to  provide  long-term  capital
                                appreciation.
       
       About the Fund:          The  fund invests mostly in common stocks  of
                                start-up,  small- and medium- sized companies
                                in   a   variety  of  industries.   The  fund
                                chooses  companies with projected  growth  of
                                at  least 20% a year.  In addition, the  fund
                                may  invest  up  to  25%  of  its  assets  in
                                foreign securities.
       
       Risk vs. Return:         This    fund's    investment   strategy    is
                                aggressive,  it  takes chances  on  companies
                                with  relatively short track records.   These
                                shares  may  experience more dramatic  swings
                                in  short-term value.  In the long-term, such
                                aggressive  funds  tend  to  outperform  more
                                conservative  investments, but  this  is  not
                                guaranteed.   For investors willing  to  take
                                on   more   risk,  this  fund   offers   high
                                potential for long-term growth.
       
       Templeton Foreign Fund

       Objective:               This  fund seeks to provide long-term capital
                                growth  and  does  not  emphasize  short-term
                                growth or income.
       
       About the Fund:          Templeton  invests exclusively in stocks  and
                                bonds  of  governments and companies  outside
                                the  U.S.   The general strategy  focuses  on
                                investing  in  companies and  governments  of
                                emerging    countries,    where    investment
                                managers expect the most growth.
                                   - 21 -
       
       <PAGE>
       Risk vs. Return:         This  fund  is best considered an  aggressive
                                and  risky  mutual  fund.   Since  this  fund
                                invests  in securities denominated in foreign
                                currencies,  the  short-term  value  of  this
                                fund  may  have more dramatic swings  than  a
                                fund  denominated in U.S. dollars.  The value
                                of  some  foreign currencies in dollar  terms
                                may  fluctuate  more over  short  periods  of
                                time.   Investments in securities  traded  in
                                these  markets are made in local  currencies,
                                the  performance of which is  linked  to  the
                                economic  and  political  stability  of  that
                                country.
       
       AFG Common Stock Fund

       Objective:               To   allow  participants  to  share  in   the
                                success  and  growth of AFG by owning  shares
                                in  AFG.   It  offers potential  for  capital
                                appreciation     (through    market     price
                                increases),  and  investment income  (through
                                dividends).
       
       About the Fund:          The  fund invests solely in AFG Common Stock,
                                except    for   temporary   investments    of
                                available   cash  held  pending   investment.
                                Cash  dividends  paid in  respect  of  shares
                                held  by  the Fund, and earnings on temporary
                                cash  investments of the Fund, less expenses,
                                are  invested in additional shares of  Common
                                Stock  and  are  credited proportionately  to
                                your  account in the Fund.  Similarly, Common
                                Stock received by the Trustee by reason of  a
                                stock   dividend,  stock  split  or   similar
                                transaction  is  credited proportionately  to
                                each    account    in    the    Fund.     The
                                Administrative  Plan  Committee  will  direct
                                the  Trustee on the voting of all  shares  of
                                Common   Stock  allocated  to  your  account.
                                Interests in
       
       
                                   - 22 -
       <PAGE>
                                AFG Common Stock Fund are valued
                                upon the closing price of the Capital Stock
                                on the New York Stock Exchange on the most
                                recent trading date coinciding with or
                                preceding the valuation date.
       
       Risk vs. Return:         Because  it  invests  in only  one  company's
                                stock, this fund has the highest risk of  the
                                investment  options in the AFG RASP.   It  is
                                not  a  mutual  fund and offers  no  built-in
                                diversification or liquidity.
       
       In  addition,  some  participants  may  have  part  of  their  account
invested  in  the Confederation Life Fund.  This fund has been  frozen  since
1994.   No  future contributions or loan repayments may be directed  to  this
fund,   nor  can  existing  account  balances  be  invested  in  this   fund.
Participants cannot transfer, withdraw (either while in-service or as a final
distribution)  or  borrow   from this fund.  This  fund  cannot  be  used  as
collateral for a loan.

       C.     Investment of Employer Contributions

       All  contributions  to the retirement account may be  made  either  in
cash,  in AFG Common Stock, or other AFG securities and will be allocated  to
the  AFG Retirement Fund unless otherwise directed by the Administrative Plan
Committee.   The AFG Retirement Fund invests in securities of AFG  and  other
subsidiaries, except for temporary investments of available cash held pending
investment.  All contributions to the matching account may be made either  in
cash  or  in  AFG Common Stock and will be allocated to the AFG Common  Stock
Fund   described   above  in  the  Section  on  Investment   of   Participant
Contributions.

       Cash  dividends  paid in respect of shares held by the AFG  Retirement
Fund  and  earnings on temporary cash investments of the Fund less  expenses,
are  invested  in  additional  shares of  AFG  securities  and  are  credited
proportionately  to your account in the Fund.  Similarly, stock  received  by
the Trustee by reason of a stock dividend, stock split or similar transaction
is credited
       
       
                                   - 23 -
<PAGE>
proportionately to each account in the Fund.  The Administrative Plan
Committee will direct the Trustee on the voting of all shares of stock
allocated to your account.  Interests in the AFG Retirement Fund are valued
upon the closing price of the Stock on the applicable Stock Exchange on the
most recent trading date coinciding with or preceding the valuation date.

       D.     Diversification

       If  you have attained the age of 55 and are fully vested, you have the
right  to  diversify  a  portion of the assets  in  your  retirement  account
invested in the AFG Retirement Fund and your matching account invested in the
AFG  Common Stock Fund in the year after you turn age 55.  During  the  first
four  years  of  the  diversification period, you may  elect  to  direct  the
investment  of up to a total of 25% of the AFG Retirement Fund held  in  your
retirement  account  and  the AFG Common Stock Fund  held  in  your  matching
account.  In the fifth year, you may elect to direct the investment of up  to
an  overall  total  of 50% of that amount.  If you elect  to  diversify,  the
applicable  percentage of the AFG Retirement Fund and the  AFG  Common  Stock
Fund (on a pro rata basis) is transferred as you direct.  The earnings on any
amount  you  elect  to  diversify will automatically  be  reinvested  as  you
directed.   In  addition,  the  total dollar amount  you  may  diversify  may
increase each year because of earnings attributed to the AFG Retirement  Fund
and the AFG Common Stock Fund.

       For  example, assume you had a total account balance of $50,000.  This
includes $25,000 in the AFG Retirement Fund, $10,000 in the AFG Common  Stock
Fund  attributable  to matching contributions and $15,000 invested  in  other
funds.   In the year after you reach age 55, you may diversify up to  25%  of
your AFG Retirement Fund ($25,000) and AFG Common Stock Fund ($10,000).  That
would  amount  to $8,750 (25% of $35,000) being available to  direct  to  the
other investment funds.  If you chose not to diversify the entire 25% in  the
first  year, you could still choose to do so until the fourth year.   In  the
fifth  year,  you could diversify an additional 25% (or another $8,750)  from
those two funds for a total of 50% diversification.  Please note this example
does not reflect additional amounts that may be diversified each year because
of earnings from the funds.


                                   - 24 -
<PAGE>
       E.     Changes in Investments

       You  may change the investment of future contributions and/or transfer
prior  contributions  among Investment Funds by calling  AFG  In-Touch.   The
change in investment decision becomes effective as soon as practicable  after
such  notice is given.  You may change the investment of future contributions
as  of any day of the calendar quarter.  You may only elect to transfer prior
contributions  already  invested  once  each  calendar  quarter.   Except  as
previously  noted,  you may not transfer assets allocated to your  Retirement
Account and Matching Account (See the Section above on Diversification).

       F.     Management of the Funds

       The  Trustee,  the  Plan  Administrator and  any  Investment  Managers
appointed by the Plan Administrator manage the investment funds for the  sole
and  exclusive benefit of you and all the participants.  Neither the  Company
nor  any other Employer has any right, title or interest in contributions  to
the  Plan,  although any excess or other contributions made by a  mistake  of
fact  by  an Employer may be returned to the Employer.  Each investment  fund
may  be  charged any fees, commissions or other expenses associated with  the
investment  transactions of the investment fund.  No charges are incurred  if
and  when securities are purchased from the Company for the AFG Common  Stock
Fund  and  the  AFG  Retirement Fund.  The Plan  Administrator  may,  in  its
discretion, change any investment fund at any time.

       The  Plan Administrator may, in its discretion and at any time, change
the  investment  guidelines for any investment fund, appoint  or  change  any
Investment Manager selected for a fund, or change any investment fund or  any
mutual  fund.  In addition, the Plan Administrator may restrict transfers  to
and  from  the AFG Common Stock Fund, the AFG Retirement Fund,  or  any  fund
consisting of a guaranteed investment contract.
       
VII.   VESTING UNDER THE PLAN

       Any  amounts transferred from the Consolidated Plans that  were  fully
vested  before  the  consolidation  will continue  to  be  fully  vested  and
nonforfeitable.

                                   - 25 -
<PAGE>
       You  become vested in your retirement account and prior profit sharing
account in accordance with the following schedule:
               Years of Service                     Vested Percentage

               Less than 5 years                              0%
               5 years or more                              100%

       You  become  vested  in your matching account in accordance  with  the
following schedule:

               Years of Service                     Vested Percentage

               1 year but less than 2 years           25%
               2 years but less than 3 years          50%
               3 years but less than 4 years          75%
               4 years or more                       100%

       You  become  automatically vested in the full value of your retirement
account,  matching  account  and  prior  profit  sharing  account  upon   the
occurrence of any of the following:

               -       attainment of age 60 (the normal retirement age  under
               the AFG RASP);

               -      total disability or death while an active employee;

               -      complete discontinuation of Employers' contributions to
               or termination of the AFG RASP; or

               -       attainment  of age 55 with 5 years of  service  (early
               retirement age) if you were a participant in the Staff RASP or
               the Group RASP on or before January 1, 1997 (you will be fully
               vested in your retirement account and matching account).

       Notwithstanding  the above, if you were a participant  in  the  Leader
Plan  as  of  December  31, 1996, you will always be  fully  vested  in  your
retirement  account, matching account and prior profit sharing  account.   If
your  prior  profit sharing account was transferred from the Group  RASP,  it
will always be fully vested.
       
                                   - 26 -
<PAGE>
       If you were an employee of American Premier as of December 31, 1996
who would have become a participant in the Staff RASP or the Republic Plan
which was merged into the APU ESORP, you will become vested in your
retirement account in accordance with the following schedule:

               Years of Service                     Vested Percentage

               Less than 3 years                          0%
               3 years but less than 4 years             20%
               4 years but less than 5 years             40%
               5 years or more                          100%

       Service  is  determined  from your date of  hire.   You  will  receive
credit for a year of service for each 12 consecutive month period you work.
       
       Please   note  that  you  are  always   fully  vested   and   have   a
nonforfeitable interest in the full value of the following accounts:

       -       401(k) savings account (your pre-tax contribution);

       -       after-tax account;

       -       retirement rollover account; and

       -       rollover account.

VIII.  DISTRIBUTIONS WHILE STILL EMPLOYED

       A.     In-service Withdrawals

       General.   You  may only request one in-service withdrawal  every  six
months  during  any  calendar year and such withdrawals must  come  from  the
accounts in the order set out below.

       Regular  Withdrawal.  By calling AFG In-Touch, you  may  request,  for
any  reason, an in-service withdrawal in cash from your after-tax account (if
any) and your rollover account.  In
       
                                   - 27 -
<PAGE>
addition, if you were a participant of the Staff RASP or the Group RASP, you
can withdraw from your vested matching account from the prior plan, excluding
contributions made in the last 24 months.

       Age  59  1/2 Withdrawal.  By calling AFG In-Touch, if you are  age  59
1/2, you may request an in-service withdrawal of the amount available under a
regular  withdrawal plus the value in your 401(k) account.  In  addition,  if
you  were a participant of the Staff RASP or the Group RASP, you can withdraw
the  remaining vested balance in your matching account from the  prior  plan.
If  you  were  a  participant in the Leader Plan, you can also  withdraw  the
vested  balance in your matching account from the prior plan.  An age 59  1/2
withdrawal can be paid in cash or AFG Common Stock (to the extent invested in
the AFG Common Stock Fund), as you elect.

Amounts  withdrawn  are  subject to income tax  and  may  be  subject  to  an
additional excise tax if you are not age 59 1/2.

       B.     Loans From Plan

       You,  or  an employee who has made a rollover contribution, may,  with
the approval of the Plan Administrator, borrow amounts (not less than $1,000)
from  any  of  your  accounts except your retirement account,   prior  profit
sharing account, and retirement rollover account.  The Plan Administrator may
require  that a request for a loan be submitted within a certain time  period
prior  to  such  date.   Each loan will be made as soon  as  administratively
possible  after such request.  You may not have any more than two outstanding
loans  at any time (however, all existing loans will be transferred from  the
Consolidated Plans to the AFG RASP regardless of the number).

       Loans  are  made in accordance with the participant loan  program,  as
set  forth  in  a  separate written document which identifies  the  person(s)
authorized  to  administer the program and specifies the procedure  for  loan
applications, the basis on which loans are approved or denied, limitations on
the  types  and amount of loans, the procedure for determining  a  reasonable
rate of
       
                                   - 28 -
<PAGE>
interest, the types of collateral which may secure a loan and the events
constituting a loan default.  A copy of the loan package may be obtained by
calling AFG In-Touch.  The loan program may be modified or amended from time
to time, and the Plan Administrator may establish other rules relating to
loans.  Each loan, however, is subject to the following principal conditions:

       1.     The  term  of the loan may not exceed 54 months (120 months  in
               the  case  of a loan used for the purchase or construction  of
               your  principal residence) and shall be due and  payable  upon
               your termination of employment;

       2.     The loan must bear a reasonable rate of interest;

       3.     The  loan must be evidenced by a promissory note and secured by
               your  account;

       4.     Loans  must  be repaid in level payments over the term  of  the
               loan, and made only through payroll withholding; however,  the
               Plan  Administrator may allow prepayment of the entire balance
               by other means;

       5.     If  a  loan  is  secured by your account that is subject  to  a
               qualified  joint and survivor annuity form of benefit, you and
               your  spouse (if any) must consent to the loan and the  amount
               of security; and

       6.     The maximum amount of the loan is the lesser of:

               a.     $50,000   reduced  by  the  highest  outstanding   loan
                      balance in the preceding twelve-month period;
               b.     50%  of  the  total  value  of  the  401(k),  matching,
                      rollover,  after-tax,  retirement  rollover  and  Staff
                      RASP profit-sharing accounts; or

               c.     the  value  of  the  after-tax,  rollover,  401(k)  and
                      vested matching accounts.

7.     Loans  may  not be used to purchase securities or to maintain,  reduce
       or retire another debt originally used to purchase securities.

                                   - 29 -

<PAGE>
To  the extent that your loan is unpaid at the time of distribution from your
accounts, the unpaid loan amount will not be part of the distributed  amount,
but will be taxed to you as if it had been distributed.

       C.     Hardship Withdrawals

       Under certain limited circumstances and with the approval of the  Plan
Administrator, you may withdraw amounts from your after-tax account, rollover
account  (but  not your retirement rollover account), 401(k) savings  account
(but not the income earned on 401(k) savings after December 31, 1988) and the
vested portion of your matching account, less the outstanding balance of  all
loans  made to you.  To assure that savings will be used for long-term needs,
such  as  retirement,  and to conform to federal law,  the  Plan  limits  the
availability of these withdrawals.

       Hardship  withdrawals  may  only be  made  (a)  in  the  event  of  an
immediate and heavy financial need and (b) if the withdrawal is necessary  to
satisfy  that  need  because the expenses cannot be paid for  out  of  liquid
assets  or  current cash flow or otherwise reasonably financed.  An immediate
and  heavy financial need is limited (under IRS regulations) to the following
situations:
       
               -      purchase of your primary residence;

               -      post-secondary education for a person in your immediate
               family for the next 12 month period;

               -       expenses previously incurred by you,  your  spouse  or
               any  dependents because of medical expenses or  necessary  for
               those persons to obtain medical care; and

               -      funds needed to prevent eviction from or foreclosure on
               your primary residence.

       Your  request  for a hardship withdrawal will be deemed  necessary  to
satisfy the financial need if all of the following requirements are met:

                                   - 30 -
<PAGE>
               -       the withdrawal does not exceed the amount necessary to
               satisfy   the   need  (including  anticipated  federal   taxes
               resulting from the distribution); and

               -      you have obtained all other available distributions and
               nontaxable loans under the AFG RASP.

       In  addition,  the following restrictions will be applied  after  your
hardship withdrawal if any portion of the withdrawal is paid from your 401(k)
savings account:

               -       your  401(k) savings will be suspended for  12  months
               after receipt of the withdrawal; and

               -      your 401(k) savings in the Plan Year following the year
               of  the  hardship  withdrawal may not  exceed  the  difference
               between the maximum amount that may be deferred for that  plan
               year and the amount of  your 401(k) savings in the year of the
               withdrawal.

       The Plan Administrator reviews each withdrawal request and decides  if
it  meets these requirements. Hardship withdrawals are subject to income  tax
and  may also be subject to an additional 10% penalty tax if the distribution
occurs  before age 59 1/2.  No hardship withdrawal may  be less than  $1,000  or
exceed  the  balance  of  your after-tax account,  rollover  account,  vested
matching account and 401(k) savings account.

       D.     Assignment of Benefits

       Your  interest in the AFG RASP may not be sold, transferred, assigned,
pledged,  garnished or encumbered in any way, and any attempt  to  do  so  is
void,  except  in  the case of a court order granted under  certain  domestic
relations laws and participant loans (see section above on Loans from Plan).

IX.    DISTRIBUTIONS AFTER EMPLOYMENT ENDS

       A.     Distributions    Upon   Retirement,   Death,   Disability    or
               Termination of Employment

       Upon  your  retirement or after age 60 (or, if you were a  participant
in the Staff RASP or the Group RASP on or before
                                   - 31 -
<PAGE>
January 1, 1997, age 55 with 5 years of service) or your total disability or
death, the full value of all of your accounts is distributed to you upon your
request, or to your beneficiary in the case of your death.  If your
employment terminates for any other reason, you may receive the full value of
your 401(k) savings, after-tax contributions, retirement rollover and
rollover contributions accounts (if any) plus the vested portion of your
retirement account, matching account and prior profit sharing account.

       B.     Commencement of Distributions

       Generally,  distributions from your 401(k) savings,  matching,  after-
tax,  prior  profit sharing, retirement rollover and rollover  accounts  will
begin  as soon as practicable after your termination of employment.  However,
distributions  from your retirement account (except amounts  if  you  were  a
participant  from  the Republic portion of the APU ESORP) may  only  be  made
after  you have had five consecutive one-year periods of severance.   A  one-
year  period  of  severance  occurs when you  are  not  employed  for  a  12-
consecutive month period.  You  may elect to defer distribution no later than
your 65th birthday.

       C.     Forms of Distributions

       Distributions from the AFG RASP are paid as follows:

               -      401(k) savings account, matching account
                      (before   January  1,  1997),  prior   profit   sharing
                      account,  rollover  account,  after-tax  account,   and
                      retirement rollover account will be paid in either:

                         -    a single lump sum in cash
                              or  in  AFG Common Stock to the extent invested
                              in the AFG Common Stock Fund; or

               -      by  a  direct rollover to an individual
                      retirement account or annuity (an "IRA") or to  another
                      qualified plan that accepts rollovers.


                                   - 32 -
<PAGE>
               -      Retirement account and matching account (amounts after
                      January 1, 1997), will be paid in:

               -      the  form of AFG Common Stock,  to  the
                      extent  invested  in  the AFG Retirement  Fund  or  AFG
                      Common  Stock Fund  (except a participant from the  APU
                      ESORP may elect a distribution from those accounts  for
                      amounts  prior to January 1, 1997 in a single lump  sum
                      in cash); or

               -     by   a   direct  rollover  to  an   individual
                     retirement account or annuity (an "IRA")  or to  another
                     qualified plan that accepts rollovers.

       In  addition, if you were a participant in the Staff RASP,  the  Group
RASP (excluding the participants from Republic) or the Leader Plan (prior  to
July  1,  1988)  you  may  elect  to receive distribution  of  your  accounts
transferred from such plans as follows:

               -       If  you are married on the date your benefits  are  to
               commence, you may elect distribution of  your benefits in  the
               form of a qualified joint and survivor annuity and if you  are
               not  married,  you may elect distribution in  the  form  of  a
               single life annuity option.

               A  qualified  joint and survivor annuity provides payments  to
               you  for life and, after your death, provides payments to your
               surviving  spouse for life.  For this purpose, your spouse  is
               entitled  to  benefits only if  he or she is your spouse  when
               benefits  began; if you remarry subsequent to  the  time  when
               benefits begin, your new spouse is not covered.  The amount of
               each  annuity payment to your surviving spouse is 50%  of  the
               amount  of each annuity payment during the joint lives of  you
               and your spouse.

               If  you elect a qualified joint and survivor annuity but  then
               change  your  mind,  you  may waive the  qualified  joint  and
               survivor annuity during a 90-day election period ending on the
               date your benefit payments
               
                                   - 33 -
               <PAGE>
               commence.  During the election period, you may revoke a
               waiver.  A waiver will not be effective unless your spouse
               gives notarized consent in accordance with the plan
               requirements, or you establish that you are not married.  If
               you are married and wish to take a single life annuity
               contract, you will be required to follow this waiver
               procedure.

               If  you  die  before the distribution of your  benefits,  your
               spouse may receive a qualified preretirement survivor annuity.
               This  type  of annuity provides payments for the remainder  of
               your spouse's life.

               -        If  you  were  such  a  participant,  you  may  elect
               distribution  in the form of a single life annuity  option,  a
               joint  and  survivor  annuity  option  or  installment  method
               (either 60, 120 or 240 months); provided, however, no benefits
               will  be  payable  over a period exceeding the  life  of  your
               beneficiary.

       If  you  are a participant for whom a retirement rollover account  was
established, you may elect to have all or a part of your accounts transferred
from  the Group RASP and the Staff RASP (in multiples of 10%) and transferred
to  and  paid from the American Premier Underwriters, Inc. Retirement  Income
Guarantee Plan in accordance with the terms of that plan (if the plan accepts
such a transfer).

       Finally,  if  you  were  a  participant in  the  Leader  Plan  or  the
Transport Plan, you  also may elect to receive distribution of your  accounts
under  that plan as of December 31, 1996, in the form of substantially  equal
annual,  quarterly or monthly installments over a period not to  exceed  your
(or  your beneficiary's) life expectancy.  If you were a participant  in  the
Transport Plan, the period also may be over a period not to exceed the  joint
life expectancy of you and your spouse.

       D.     Valuation of Accounts for Distribution

       For  purposes of any distribution from the AFG RASP, your accounts are
valued  as of the most recent Valuation Date (each business day of  the  Plan
Year) coinciding with or preceding the payment.
                                   - 34 -
<PAGE>
       E.     Procedure for Designating a Beneficiary

       Your  surviving spouse will automatically be your beneficiary   unless
your spouse consents in writing to the designation of another beneficiary  or
beneficiaries.  Such written approval must be witnessed by a notary public.

       If  you  are  not married or if you are married and you have  received
spousal  consent,  you  may  designate,  on  a  form  provided  by  the  Plan
Administrator, the beneficiary or beneficiaries to receive your  interest  in
the  AFG  RASP  in the event of your death.  The beneficiary or beneficiaries
may  be  changed by you during your lifetime.  If you are unmarried  and  you
fail  to  designate  a  beneficiary, or if all your designated  beneficiaries
predecease or die simultaneously with you, distribution will be made to  your
estate.   You can obtain designation of beneficiary forms by calling AFG  In-
Touch.

X.     FORFEITURES AND REINSTATEMENT

       If  your  employment terminates and you are not (and  do  not  become)
fully vested in the value of your accounts, you will be entitled to receive a
distribution  of  the  vested  portion  of  your  accounts  (subject  to  the
provisions  described in the Section above in Distributions After  Employment
Ends)  and the remainder will be treated as a forfeiture.  If  you forfeit  a
portion  of   your accounts and are later reemployed by an Employer,  or  any
nonparticipating subsidiary  of the Company, prior to incurring five  consecu
tive one-year periods of severance, the portion forfeited will be restored if
you repay to the AFG RASP the full amount of the distribution.

XI.    SPECIAL RULES FOR SECTION 16 PARTICIPANTS

       If  you  are  a  participant who is subject  to  the  requirements  of
Section  16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"),  as  a  result  of  your relationship with the  Company  ("Section  16
participants") you are restricted as described below:


                                   - 35 -
<PAGE>
       Rules  promulgated  under  Section 16 establish  exemptions  from  the
short-swing  profit recovery provision described above. Under  one  of  these
exemptions,  Section 16 participants may generally acquire or dispose  of  an
issuer's  equity securities under company-sponsored "tax-conditioned  plans."
The  AFG  RASP qualifies as a tax-conditioned plan. Accordingly,  Section  16
participants may generally acquire or dispose of Company Common  Stock  under
the AFG RASP to the same extent as participants who are not under Section 16.
However,  Section 16 participants are restricted in their ability to  conduct
what  are  known as "discretionary transactions." Discretionary  transactions
are  transactions by Section 16  participants under an employee benefit  plan
involving  voluntary fund switches or voluntary cash withdrawals relating  to
an  issuer  equity  securities fund. For a discretionary  transaction  to  be
exempt from Section 16 liability, it must be effected by an election made  at
least  six-months  following the date of the Section 16  participant's  most-
recent  "opposite-way"  election under any plan of  the  Company.  "Same-way"
elections, however, are not subject to this six-month condition, nor are non-
plan elections taken into consideration.

       With  respect to the Plan, Section 16(b) of the Exchange Act generally
provides  that if a Section 16 participant makes any purchase  and  sale,  or
sale and purchase, of shares for his or her  AFG Common Stock Fund and/or his
or  her  AFG Retirement Fund within a six month period, all profit  resulting
from  the  transactions  must be turned over to the  Company.   Although  the
acquisition  of  shares  from  the  AFG Common  Stock  Fund  and/or  the  AFG
Retirement Fund pursuant to the AFG RASP and the distribution of any of those
shares  to  a  Section  16  participant are exempt from  Section  16(b),  the
subsequent sale of the shares will constitute a "sale" for purposes  of  that
Section.

XII.   COSTS OF THE PLAN

       The  costs  associated  with operating the   AFG  RASP  are  allocated
proportionately to and paid out of each of the investment funds,  unless  the
Company elects to pay these expenses.

                                   - 36 -
<PAGE>
XIII.  TAX EFFECTS

       A.     Contributions

       For  purposes  of  calculating federal income taxes, you  may  exclude
from  your taxable income the 401(k) savings made by you in the year in which
such  contributions are made.  Employer contributions and earnings  allocated
to  your accounts will have no effect on your federal tax liability until you
receive a distribution from the AFG RASP.

       All  your  401(k)  savings,  retirement  contributions,  and  matching
contributions   to  the  Plan  are deductible  by  the  Employer  up  to  the
limitations of the Federal tax laws.  As previously mentioned, the  AFG  RASP
is  designed to qualify as a contributory profit sharing plan under  Sections
401(a) and 401(k) of the Code.

       B.     Distributions

       Upon distribution from the Plan, if  you have participated in the  AFG
RASP  for five years or more and attained age 59 1/2, you may elect to have  the
distribution of the entire amount in the AFG RASP  taxed under a special five-
year  averaging method.  If you meet the five-year participation  requirement
and  attained  age  50  before January 1, 1986, you may  elect  to  have  the
distribution of the entire amount in the Plan taxed under a special five-year
averaging method or under a special ten-year averaging method (using 1986 tax
rates).  These averaging methods afford special tax treatment and reduce your
income  taxes by treating all or part of the distribution as if it  had  been
received over a five-year or ten-year period.  These averaging methods may be
used  only  once.  These rules will not be effective for tax years  beginning
after  December  31, 1999.  However, the prior transition rules  for  certain
individuals  are  still in effect if you attained age 50  before  January  1,
1986.

       You  may  transfer all or part of the distribution from the  AFG  RASP
to  another qualified plan or to an individual retirement account or  annuity
("IRA")  within  60  calendar days after you receive the  distribution.   The
transferred portion of the
       
                                   - 37 -
<PAGE>
distribution is then not taxable until it is distributed from the IRA or
qualified plan.  However, if you roll a distribution over into an IRA, as
opposed to another qualified plan, you will not be eligible to qualify for
the special five-year (or ten-year, if applicable) averaging method when
withdrawing your benefits from the IRA at a later date.

       If  you  do  not  elect  the special five-year or  ten-year  averaging
method  and do not rollover all of the distribution of your entire amount  in
the  AFG  RASP,  the  amount distributed to you will be subject  to  ordinary
income  tax.   In addition, the distribution may be subject to an  additional
10%  tax, if it was not made as a result of (i) death, (ii) disability, (iii)
separation  of service after age 55 or (iv) an in-service distribution  after
age 59 1/2.

       C.     Individual Retirement Account Deductions

       As  a  result  of the Tax Reform Act of 1986, if you are an  "eligible
participant"  in  the  AFG  RASP, you cannot make a  full  $2,000  deductible
contribution to an IRA unless your adjusted gross income is $25,000  or  less
if  you  are  single, or $40,000 or less if you are married.   Allowable  IRA
contributions  are  phased out for a single participant with  adjusted  gross
income  between  $25,000  and  $35,000 and for  a  married  participant  with
adjusted gross income between $40,000 and $50,000.  To the extent you  cannot
make  a  deductible  IRA  contribution, you  may  make  a  nondeductible  IRA
contribution, the earnings on which will be tax-deferred.

XIV.   PROCEDURE FOR MAKING A CLAIM FOR BENEFITS

       In  order  to present a complaint regarding the nonpayment of  a  RASP
benefit or a portion thereof, you or your beneficiary must file such claim by
mailing  or  delivering a written statement to the Plan Administrator.   Upon
receipt of the claim, you will receive a written acknowledgment.

       If  a claim for benefits is denied, either in whole or in part, you or
your  beneficiary must be furnished a written notice of the  denial  together
with an explanation of the specific reason
       
                                   - 38 -
<PAGE>
or reasons why the claim was denied and the steps which can be taken to
perfect the claim.  This notice must be given within a reasonable time not to
exceed 90 days, unless special circumstances require an extension.

       You  or  your  beneficiary, may request a review of the  denied  claim
within 60 days of receipt of the written notice that the claim was denied  by
making  written application for review to the Plan Administrator.  If you  do
not  receive a written denial within 60 days, you may consider this a  denial
and  proceed with this process.  You may also review the pertinent  documents
and  submit comments in writing as well as be represented by counsel  at  the
participant's expense.

       A  decision must, in turn, be made by the Plan Administrator within 60
days  after  receipt of the request for review, unless special  circumstances
exist, but in no event later than 120 days after receipt of the request.  The
decision  must be set forth in writing and include reasons and references  to
those Plan provisions on which it is based.

XV.    NOTICES AND CORRESPONDENCE

       You  should direct all requests for forms and information to  AFG  In-
Touch  at  1-800-458-2387.  All notices and other correspondence to the  Plan
Administrator  should  be  sent to the attention of the  Administrative  Plan
Committee,   American  Financial  Group,  Inc.,  One  East   Fourth   Street,
Cincinnati, Ohio 45202; telephone (513) 579-2121.

XVI.   AMENDMENT AND TERMINATION OF PLAN

       Although  the  AFG  RASP  has no termination  date  and  may  continue
indefinitely, the AFG RASP may be amended, modified or terminated at any time
by a written amendment of the Board of Directors of the Company and signed by
an officer of the Company.  Any amendment, modification or termination may be
done without the consent of any other Employer.  Further, with the consent of
the  Company,  any Employer may withdraw from the AFG RASP.  No amendment  to
the  AFG  RASP,  however,  may operate directly or  indirectly  to  give  any
Employer any interest in the assets of the
       
                                   - 39 -
<PAGE>
AFG RASP, to permit those assets to be used for purposes other than the
exclusive benefit of you and the other participants or to deprive you or any
other participant of your  vested interest in the AFG RASP at that time.

       If  the AFG RASP is terminated, all of your accounts will become fully
vested. The Company may direct either (i) that benefits be distributed in one
lump  sum  payment  after the Internal Revenue Service  determines  that  the
termination  does not adversely affect the AFG RASP's qualification  or  (ii)
that  the trust continue and benefits be distributed at the same time and  in
the  same  manner  as  if the AFG RASP had not terminated  (but  without  any
additional contributions).

       If  an Employer is dissolved, liquidated or adjudged bankrupt, the AFG
RASP  will  automatically terminate with respect to that Employer.   The  AFG
RASP will also terminate upon the merger, consolidation or reorganization  of
an  Employer  or  the  sale of substantially all of its  assets,  unless  the
successor  or  purchasing  entity,  whichever  is  the  case,  agrees  to  be
substituted  for the Employer and to assume all of the Employer's obligations
under the AFG RASP.

XVII.  TOP HEAVY RULES

       Federal  tax  laws require that, in the event the Plan  should  become
"top heavy" (which occurs if the sum of the account balances of key employees
for  any  Plan  Year exceeds 60% of all account balances), 100% vesting  must
occur after three years of service and a minimum contribution must be made to
the  AFG  RASP  equal  to  the lesser of 3% of compensation  or  the  highest
percentage contributed for key employees.  The rules are very complex.  It is
unlikely  the  Plan will become top heavy, but if it does, AFG will  let  you
know.

XVIII.  ESOP PROVISIONS
       
       The  terms  of the AFG RASP permit the RASP to borrow funds on  behalf
of  the  AFG  RASP  (referred to as an ESOP if borrowing  is  done)  for  the
exclusive benefit of you and other participants.  In the event the  AFG  RASP
makes any such loans (called "ESOP
       
                                   - 40 -
<PAGE>
Loans"),  certain  provisions  of the RASP will  become  effective  for  your
benefit. These special rules include a requirement that the assets of the AFG
RASP  be  invested primarily in Employer equity securities (that is, the  AFG
Retirement  Fund  described  above  in  the  Section  called  Investment   of
Contribution) and other requirements regarding distributions and investments.
More information about this is available in the Plan Document.

XIX.   RIGHTS UNDER ERISA

       The  terms of the AFG RASP are designed to comply with ERISA.  The AFG
RASP  is  subject  to  many of the provisions of Title I  and  II  of  ERISA,
including  those  dealing with reporting, disclosure, participation,  vesting
and  fiduciary  responsibilities.   As a "defined  contribution"  "individual
account"  plan, the AFG RASP is not subject to the minimum funding provisions
of Title I and Title II of ERISA or the plan termination insurance provisions
of  Title  IV of ERISA.  Therefore, the benefits under the AFG RASP  are  not
insured by the Pension Benefit Guaranty Corporation.

       Neither  the Company, its officers, employees or members of the  Board
of  Directors, nor the Trustee or any other Plan fiduciary, may guarantee  in
any  manner  the  payment  of benefits under the  AFG  RASP,  or  warrant  or
represent  that  the market value of any securities held  in  the  investment
funds under the AFG RASP will increase or will not decrease.

       You  and  the other participants in the Plan are entitled  to  certain
rights and protections under ERISA.  ERISA provides that all participants are
entitled to:

       (a)    Examine,  without  charge, at the Plan  Administrator's  office
               and   at   other  specified  locations,  all  Plan  Documents,
               including copies of all documents filed by the Plan  with  the
               U. S. Department of Labor, such as detailed annual reports and
               Plan descriptions.
       
       (b)    Obtain  copies of all Plan Documents and other Plan information
               on  written  request  to  the  Plan  Administrator.  The  Plan
               Administrator may make a reasonable charge for copies.

                                   - 41 -
<PAGE>
       (c)    Receive  a summary of the Plan's annual financial report.   The
               Plan   Administrator  is  required  by  law  to  furnish  each
               participant with a copy of this summary annual report.

       (d)    Obtain  a statement once a year setting forth the value of  the
               participant's  accounts  under  the  Plan  and   whether   the
               participant  is  vested in any portion  of  Employer  matching
               contributions.

       In  addition  to creating rights for Plan participants, ERISA  imposes
duties  on  those people who are responsible for the operation of  the  Plan.
Those  who  operate the Plan, called "fiduciaries," have  a  duty  to  do  so
prudently and in the interest of Plan participants and beneficiaries.

       No  one  may  prevent  a  participant  from  obtaining  a  benefit  or
exercising a right under ERISA by firing or otherwise discriminating  against
a participant in any manner.

       If  a  claim  for a benefit is denied, in whole or in part,  you  must
receive a written explanation of the reason for the denial.  In addition, you
have the right to have the Plan Administrator review and reconsider a claim.

       Under  ERISA,  there are steps a participant may take to  enforce  the
above  rights.  For instance, if you request materials from the Plan  and  do
not  receive them within 30 days, you may file suit in a federal  court.   In
such  a  case,  the court may require the Plan Administrator to  provide  the
materials  and  pay  you  up to $100 a day until you receive  the  materials,
unless  the materials were not sent because of reasons beyond the control  of
the Plan Administrator.  A participant who has a claim for benefits denied or
ignored, in whole or in part, may file suit in a state or federal court.  You
may seek assistance from the U. S. Department of Labor or may file suit in  a
federal  court if  you are discriminated against or if it should happen  that
Plan fiduciaries misuse the Plan's money.


                                   - 42 -
<PAGE>
       The  court  will decide who should pay court costs and legal  fees  in
such  a  proceeding.  If you are successful, the court may order  the  person
sued  to pay these costs and fees.  If you lose, the court may order  you  to
pay these costs and fees, for example, if it finds the claim to be frivolous.

       A  participant  who  has questions about the Plan should  contact  the
Plan Administrator.  A participant who has questions about this statement  or
about rights under ERISA should contact the nearest area office of the U.  S.
Department of Labor-Management Services Administration, Department of Labor.

XX.    RESTRICTIONS ON RESALE OF AFG STOCK

       If  you are a participant who is an "affiliate" of the Company, shares
of  the Company's Common Stock or any other securities of AFG or a subsidiary
of  AFG  received  from  the RASP may not be resold unless  you  comply  with
Commission Rule 144 or otherwise comply with the Securities Act of 1933.   An
affiliate  is  generally described as a person who, directly  or  indirectly,
possesses  the  power to direct the policies and management of  the  Company,
whether  through the ownership of stock, by contract or otherwise.  Directors
and Executive Officers of AFG and principal AFG shareholders are affiliates.


XXI.   INCORPORATION OF DOCUMENTS BY REFERENCE

       The following documents filed with the Commission are incorporated  by
reference herein:

       (a)    The  Company's  Annual Reports for the year ended December  31,
               1995 filed on Form 10-K, as amended;

       (b)    All  other  reports  filed by the Company pursuant  to  Section
               13(a) or 15(d) of the Exchange Act since January 1, 1996; and

       (c)    The  descriptions of the securities offered hereby contained in
               the  following documents, as they may have been  amended  from
               time to time, filed by the Company:

                                   - 43 -
<PAGE>
               (i)    Common  Stock  -- Registration Statement  on  Form  8-B
                      filed on April 17, 1995 under the Exchange Act.

       In  addition, all documents subsequently filed by the Company and  the
AFG RASP pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior  to  the filing of a post-effective amendment which indicates that  all
securities  offered have been sold or which deregisters all  securities  then
remaining unsold, shall be deemed to be incorporated by reference herein  and
to be a part hereof from the date of filing of such documents.

       The  Company  will provide you without charge, a copy of any  document
(not  including exhibits) incorporated by reference as well as a copy of  any
other  document  required to be delivered pursuant  to  Rule  428(b)  of  the
Securities  Act  of 1933, as amended (including the Company's Annual  Report,
proxy statements and all other reports and communications distributed to  the
Company's  security holders generally) or any Form 11-K filed by any  of  the
Consolidated  Plans.   A  request, which may be oral  or  written,  for  such
documents  should  be addressed to the Company at the address  and  telephone
number given on the cover of this document.




                                   - 44 -






 <PAGE>
                              TABLE OF CONTENTS
                                                              Page

I.        GENERAL INFORMATION                                  1

II.       ADMINISTRATION                                       1

III.      ELIGIBILITY REQUIREMENTS                             3

IV.       ENROLLMENT AND PARTICIPATION IN THE PLAN             4

V.        CONTRIBUTIONS AND ACCOUNTS                           5

VI.       INVESTMENT OF CONTRIBUTIONS                          8

VIII.     DISTRIBUTIONS WHILE STILL EMPLOYED                  15

IX.       DISTRIBUTIONS AFTER EMPLOYMENT ENDS                 19

X.        FORFEITURES AND REINSTATEMENT                       22

XI.       SPECIAL RULES FOR SECTION 16 PARTICIPANTS           22

XII.      COSTS OF THE PLAN                                   23

XIII.     TAX EFFECTS                                         23

XIV.      PROCEDURE FOR MAKING A CLAIM FOR BENEFITS           24

XV.       NOTICES AND CORRESPONDENCE                          25

XVI.      AMENDMENT AND TERMINATION OF PLAN                   25

XVII.     TOP HEAVY  RULES                                    25

XVIII.    ESOP PROVISIONS                                     26

XIX.      RIGHTS UNDER ERISA                                  26

XX.       RESTRICTIONS ON RESALE OF AFG STOCK                 27

XXI.      INCORPORATION OF DOCUMENTS BY REFERENCE             28



                                   - 45 -
                                      



EXHIBIT 5


                              October 28, 1996


Direct Dial:  (513) 579-2540

American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio  45202

Dear Sir or Madam:

       I  have  acted as counsel to American Financial Group, Inc.,  an  Ohio
corporation  (the  "Company")  in  connection  with  the  preparation  of   a
Registration  Statement on Form S-8 filed by the Company with the  Securities
and  Exchange Commission.  The Registration Statement relates to the issuance
and  sale  of up to 500,000 shares of Common Stock, $1.00 par value,  of  the
Company pursuant to the American Financial Group Retirement and Savings  Plan
(the "Plan").

       In  connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
such  documents as I have deemed necessary or appropriate as a basis for  the
opinions  set forth below including (i) the Registration Statement, (ii)  the
Restated and Amended Articles of Incorporation and Code of Regulations of the
Company,  each  as amended to the date hereof, and (iii) resolutions  of  the
Board  of  Directors  of the Company relating to the approval  of  the  Plan,
issuance of shares of Common Stock pursuant to the Plan and the filing of the
Registration Statement.

       Based  upon  and subject to the foregoing, I am of the  opinion  that,
when (i) the Registration Statement has become effective under the Securities
Act  of 1933 and (ii) the shares of Common Stock, when issued as contemplated
by  the  Plan,  will  constitute duly issued, fully paid  and  non-assessable
shares of Common Stock of the Company.

        I  hereby consent to the filing of this opinion as Exhibit 5  to  the
Registration Statement.

                                       Very truly yours,

                                       Karl J. Grafe
                                       ----------------------------
                                       Karl J. Grafe
                                        Assistant General Counsel and
                                         Assistant Secretary














                                   - 46 -


EXHIBIT 23.2



                       CONSENT OF INDEPENDENT AUDITORS

We  consent  to the incorporation by reference in the Registration  Statement
(Form  S-8) and related Prospectus pertaining to the American Financial Group
Savings  and  Retirement Plan for the registration of 500,000 shares  of  its
common  stock  of  our  report dated March 15,  1996,  with  respect  to  the
consolidated financial statements and schedules of American Financial  Group,
Inc.  included  in its Annual Report (Form 10-K) for the year ended  December
31, 1995, filed with the Securities and Exchange Commission.






                                                    ERNST & YOUNG LLP


Cincinnati, Ohio
October 28, 1996





































                                   - 47 -




EXHIBIT 23.3



                       CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement on
Form  S-8 of American Financial Group, Inc., for the registration of  500,000
shares  of its common stock of (a) the report of Deloitte & Touche LLP  dated
February 15, 1995 (March 23, 1995 with respect to the acquisition of American
Financial  Corporation  as discussed in Note 2 to the  financial  statements)
relating  to  the  consolidated  financial  statements  of  American  Premier
Underwriters, Inc. and (b) the report of Deloitte & Touche dated February 18,
1994  relating  to  the consolidated financial statements  of  General  Cable
Corporation,  both  appearing  in the American Financial  Corporation  Annual
Report on Form 10-K for the year ended December 31, 1994.






                                                    DELOITTE & TOUCHE LLP


Cincinnati, Ohio
October 28, 1996





























                                   - 48 -
[{"type": "S-8", "sequence": "1", "description": "TO REGISTER 500,000 SHARES", "secsgml_size_bytes": 102885}]
{"company-data": {"conformed-name": "AMERICAN FINANCIAL GROUP INC /OH/", "cik": "0000933537", "assigned-sic": "6331", "irs-number": "311422526", "state-of-incorporation": "OH", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-14935", "film-number": "96648674"}, "business-address": {"street1": "ONE E FOURTH ST", "street2": "SUITE 919", "city": "CINCINNATI", "state": "OH", "zip": "45202", "phone": "5135796600"}, "mail-address": {"street1": "ONE EAST FOURTH STREET", "street2": "SUITE 919", "city": "CINCINNATI", "state": "OH", "zip": "45202"}, "former-company": {"former-conformed-name": "AMERICAN PREMIER GROUP INC", "date-changed": "19941208"}}
As filed with the Securities and Exchange Commission on October 28, 1996
                                               Registration No. 333-
--------------------------------------------------------------------------

                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
                      ---------------------------------
                                      
                                  FORM S-8
                           REGISTRATION STATEMENT
                                    UNDER
                         THE SECURITIES ACT OF 1933
                     -----------------------------------

Incorporated          AMERICAN FINANCIAL GROUP, INC.        I.R.S. Employer
Under the Laws           ONE EAST FOURTH STREET             Identification No.
of Ohio                  CINCINNATI, OHIO 45202             31-1422526

                       AMERICAN FINANCIAL GROUP, INC.
                         RETIREMENT AND SAVINGS PLAN
                 ------------------------------------------
                                      
                           James C. Kennedy, Esq.
                     Deputy General Counsel & Secretary
                       American Financial Group, Inc.
                           One East Fourth Street
                           Cincinnati, Ohio  45202
                               (513) 579-2538
                       (Agent for Service of Process)

                          CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------
Proposed          Proposed
                                             Maximum           Maximum
Title of                Amount               Offering          Aggregate          Amount of
Securities              To Be                Price             Offering           Registration
To Be Registered        Registered (1)       Per Share (2)     Price (2)          Fee(3)
-----------------------------------------------------------------------------------------------

Common Stock,           500,000              $34.5625          $17,281,250           $5,960.00
par value $1.00         Shares
per share

(1)    This  Registration  Statement  is  filed  for  up  to  500,000  shares
       issuable  pursuant  to  the American Financial  Group  Retirement  and
       Savings Plan.

(2)    Estimated solely for purposes of calculating the registration fee.

(3)    The  registration  fee  has been calculated pursuant  to  Rule  457(h)
       based  on  the average of the high and low prices of the Common  Stock
       as  reported  on the New York Stock Exchange on October  22,  1996  of
       $34.5625 per share.
Page 1 of 48 Pages
                           Exhibit Index on Page 3

                                   PART II

             INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.Incorporation of Documents by Reference

       The  following documents filed by American Financial Group, Inc.  (the
"Company"  or  "Registrant") with the Securities and Exchange Commission  are
incorporated herein by reference and made a part hereof:

       
       1.     The  Company's  Annual Report on Form 10-K for the  year  ended
              December 31, 1995;

       2.     The  Company's Quarterly Reports on Form 10-Q for the  quarters
              ended March 31, 1996 and June 30, 1996;
       
       3.     The  Company's  Current Reports on Form 8-K dated February  12,
              1996, September 20, 1996 and October 21, 1996; and

       4.     The  description of the Company's Common Stock contained in the
              Registration  Statement on Form 8-B filed on  April  17,  1995
              under the Securities Exchange Act of 1934.

       All  reports  and  other documents filed by the  Company  pursuant  to
Sections  13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of  1934,
prior  to  the filing of a post-effective amendment which indicates that  all
Common Stock offered has been sold or which deregisters all Common Stock then
remaining  unsold,  shall be deemed to be incorporated by reference  in  this
Registration Statement and to be a part hereof from the date of  filing  such
documents.

Item 4.  Description of Securities

       Not applicable.

Item 5.  Interests of Named Experts and Counsel

       The  legality of the Common Stock offered hereby will be  passed  upon
for  the  Company  by  Karl  J. Grafe, Esq., Assistant  General  Counsel  and
Assistant  Secretary of the Company.  Mr. Grafe beneficially owns 485  shares
of the Company's Common Stock.

Item 6.  Indemnification of Directors and Officers

       Ohio  Revised Code Section 1701.13(E), allows indemnification  by  the
Registrant  to  any  person made or threatened to be  made  a  party  to  any
proceedings, other than a proceeding by or in the right of the Registrant, by
reason  of the fact that such person is or was a director, officer,  employee
or  agent of the Registrant, against expenses, including judgment and  fines,
if  such person acted in good faith and in a manner reasonably believed to be
in  or  not opposed to the best interests of the Registrant and, with respect
to  criminal actions, in which such person had no reasonable cause to believe
that  such conduct was unlawful.  Similar provisions apply to actions brought
by or in the right of the Registrant, except that no indemnification shall be
made in such cases when the person shall have been adjudged to be liable  for
negligence  or  misconduct to the Registrant unless deemed otherwise  by  the
court.   Indemnifications are to be made by a majority vote of  a  quorum  of
disinterested directors or the written opinion of independent counsel  or  by
the  shareholders  or  by the court.  The Registrant's  Code  of  Regulations
extends such indemnification.

                                    - 2 -
The  Registrant  maintains,  at its expense,  Directors  and  Officers
Liability  and Company Reimbursement Liability Insurance.  The Directors  and
Officers  Liability portion of such policy covers all directors and  officers
of  the  Registrant and of the companies which are, directly  or  indirectly,
more  than  50% owned by the Registrant.  The policy provides for payment  on
behalf  of  the  directors and officers, up to the policy  limits  and  after
expenditure of a specified deductible, all Loss (as defined) from claims made
against  them  during  the  policy period for defined  wrongful  acts,  which
include errors, misstatements or misleading statements, acts or omissions and
neglect or breach of duty by directors and officers in the discharge of their
individual or collective duties as such.  The insurance includes the cost  of
investigations and defenses, appeals and bonds and statements and  judgments,
but  not fines or penalties imposed by law.  The insurance does not cover any
claim arising out of acts alleged to have been committed prior to October 24,
1978.  The insurer limit of liability under the policy is $50,000,000 in  the
aggregate  for  all  losses  each  year subject  to  certain  individual  and
aggregate  deductibles.  The policy contains various exclusions and reporting
requirements.

       The  Registrant also has entered into indemnification agreements  with
its  executive  officers and directors providing for indemnification  against
certain liabilities to the fullest extent provided by Ohio law.

Item 7.  Exemption from Registration Claimed

       Not applicable.

Item 8.  Exhibits

        4     American Financial Group Retirement and Savings Plan

        5     Opinion of Karl J. Grafe, Esq.

       23.1   Consent of Karl J. Grafe, Esq. (contained on Exhibit 5).

       23.2   Consent of Independent Auditor

       23.3   Consent of Independent Auditor

       24     Powers of Attorney (contained on the signature page).

Item 9. Undertakings

       9.1     The  undersigned Registrant hereby undertakes to  file  during
any  period  in  which  offers  or sales are  being  made,  a  post-effective
amendment  to  this  Registration Statement (i)  to  include  any  prospectus
required  by Section 10(a)(3) of the Securities Act of 1933, (ii) to  reflect
in  the  prospectus any facts or events arising after the effective  date  of
this  Registration  Statement  (or the most recent  post-effective  amendment
thereof)  which,  individually or in the aggregate, represent  a  fundamental
change   in  the  information  set  forth  in  this  Registration  Statement.
Notwithstanding  the  foregoing,  any  increase  or  decrease  in  volume  of
securities  offered (if) the total dollar value of securities  offered  would
not  exceed that which was registered) and any deviation from the low or high
end  of the estimated maximum offering range may be reflected in the form  of
prospectus  filed  with the Commission pursuant to Rule  424(b)  if,  in  the
aggregate, the changes in volume and price represent no more than 20%  change
in  the  maximum  aggregate offering price set forth in the  "Calculation  of
Registration Fee" table in the effective Registration Statement and (iii)  to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change  to
such  information in the Registration Statement; provided, however, that  (i)
and (ii) shall not apply if the information required to be included in a post-
effective amendment is

                                    - 3 -
contained in periodic reports filed by the Registrant pursuant to Section  13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this Registration Statement.

       9.2     The  undersigned Registrant hereby undertakes  that,  for  the
purpose  of determining any liability under the Securities Act of 1933,  each
such  post-effective  amendment shall be deemed  to  be  a  new  Registration
Statement  relating to the securities offered therein, and  the  offering  of
such  securities  at that time shall be deemed to be the  initial  bona  fide
offering thereof.

       9.3     The  undersigned Registrant hereby undertakes to  remove  from
registration  by  means of a post-effective amendment any of  the  securities
being registered which remain unsold at the termination of the offering.

       9.4      The  undersigned  Registrant  hereby  undertakes  that,   for
purposes of determining any liability under the Securities Act of 1933,  each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d)  of  the  Securities  Exchange Act of  1934  that  is  incorporated  by
reference  in  the  Registration Statement  shall  be  deemed  to  be  a  new
registration  statement relating to the securities offered therein,  and  the
offering  of  such securities at that time shall be deemed to be the  initial
bona fide offering thereof.

       9.5     Insofar as indemnification for liabilities arising  under  the
Securities  Act  of  1933  may  be  permitted  to  directors,  officers   and
controlling  persons of the Registrant pursuant to the foregoing  provisions,
or  otherwise,  the Registrant has been advised that in the  opinion  of  the
Securities  and  Exchange Commission such indemnification is  against  public
policy  as  expressed  in the Act and is, therefore, unenforceable.   In  the
event  that a claim for indemnification against such liabilities (other  than
the  payment  by the Registrant of expenses incurred or paid by  a  director,
officer or controlling person of the Registrant in the successful defense  of
any  action,  suit, or proceeding) is asserted by such director,  officer  or
controlling  person in connection with the securities being  registered,  the
Registrant  will, unless in the opinion of its counsel the  matter  has  been
settled   by   controlling  precedent,  submit  to  a  court  of  appropriate
jurisdiction  the  question whether such indemnification  by  it  is  against
public  policy  as  expressed in the Act and will be governed  by  the  final
adjudication of such issue.
       
       

                                    - 4 -

                                 SIGNATURES

       Pursuant  to  the  requirements of the Securities  Act  of  1933,  the
Registrant certifies that it has reasonable grounds to believe that it  meets
all  of  the  requirements for filing on Form S-8 and has  duly  caused  this
Registration  Statement  to  be  signed on its  behalf  by  the  undersigned,
thereunto duly authorized, in Cincinnati, Ohio, on October 28, 1996.

                                     AMERICAN FINANCIAL GROUP, INC.

                                     By: Carl H. Lindner
                                         -----------------------------------
                                         Carl H. Lindner
                                         Chairman of the Board and
                                         Chief Executive Officer

       Pursuant  to  the  requirements of the Securities Act  of  1933,  this
Registration  Statement  has  been signed by the  following  persons  in  the
capacities as of the dates indicated.  Persons whose names are marked with an
asterisk  (*)  below hereby designate James C. Kennedy or Karl  J.  Grafe  as
their  attorneys-in-fact to sign all amendments, including any post-effective
amendments, to this Registration Statement.

        Signature           Capacity                          Date
 

 *Carl H. Lindner           Chairman of the Board and Chief   October 28, 1996
 ---------------------      Executive Officer (Principal
 Carl H. Lindner            Executive Officer)

 *Carl H. Lindner III       Director                          October 28, 1996
 ---------------------
 
 *S. Craig Lindner          Director                          October 28, 1996
 ---------------------
 S. Craig Lindner
 
 *Keith E. Lindner          Director                          October 28, 1996
 ---------------------
 Keith E. Lindner
 
*James E. Evans             Director                          October 28, 1996
 ---------------------
 James E. Evans
 
 *Thomas M. Hunt            Director                          October 28, 1996
 ---------------------
 Thomas M. Hunt
 
 *William R. Martin         Director                          October 28, 1996
 ---------------------
 William R. Martin
 
 Fred J. Runk              Senior Vice President and          October 28, 1996
 ---------------------     Treasurer (Principal Accounting
 Fred J. Runk              Officer and Principal Financial
                           Officer)
 
 
                                    - 5 -
EXHIBIT 4
                            AMERICAN FINANCIAL GROUP

                          RETIREMENT AND SAVINGS PLAN

       This  document  describes the American Financial Group Retirement  and
Savings  Plan  (the  "AFG RASP" or the "RASP").  The AFG RASP  offers  a  tax
advantaged  means  by which eligible employees of American  Financial  Group,
Inc.  (the  "Company"  or  "AFG")  and  its  participating  subsidiaries  may
accumulate  capital  on a regular and long-term basis  for  their  retirement
income needs.

       This  Prospectus  relates to 500,000 shares of  the  Company's  Common
Stock,  $1.00  par value (the "AFG Common Stock"), which may be purchased  by
the Trustee under the RASP.  AFG Common Stock may be purchased for the RASP's
AFG  Common Stock Fund.  AFG Common Stock is registered on the New York Stock
Exchange.

       Additional  information regarding the AFG RASP and its  administrators
may  be  obtained by contacting the Company or the Plan Administrator at  the
Company's  principal  executive offices, One East Fourth Street,  Cincinnati,
Ohio  45202, attention:  Human Resources.  The Company's telephone number  is
(513) 579-2121.

                    THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
                         SECURITIES THAT HAVE BEEN REGISTERED UNDER THE
                                    SECURITIES ACT OF 1933.

       This document is also the Summary Plan Description of the Plan
   under the Employee Retirement Income Security Act of 1974, as amended.

                                     Dated January 1, 1997

                                    - 6 -
I.     GENERAL INFORMATION

       The  AFG  RASP  was established by the Company, effective  January  1,
1997, to offer you and other employees a way to develop personal savings  for
retirement  and  to  provide an opportunity to make various  investments  for
retirement,  including investment in AFG Common Stock.  The  AFG  RASP  is  a
consolidation of the following plans:

       -      American      Financial     Corporation     Employee      Stock
               Ownership/Retirement Plan ("AFC ESORP");

       -      American  Financial Corporation 401(k) Retirement Savings  Plan
               ("AFC 401(k) Plan");

       -      American  Premier  Employee  Stock  Ownership  Retirement  Plan
               ("APU ESORP");

       -      American Premier Retirement and Savings Plan ("Staff RASP");

       -      American  Premier  Group Retirement and  Savings  Plan  ("Group
               RASP");

       -      Profit  Sharing  Retirement Plan and Trust of  Leader  National
               Corporation ("Leader Plan");  and

       -      Transport  Companies Employees' Profit Sharing  and  Retirement
               Plan ("Transport Plan").

       These  plans  are sometimes collectively referred to in this  document
as the "Consolidated Plans".

       The  AFG  RASP is designed to qualify as a contributory profit sharing
plan  under Sections 401(a) and 401(k) of the Internal Revenue Code  of  1986
(the  "Code").  This permits you to defer receipt of, and income taxes on,  a
portion  of cash compensation by having it contributed to the RASP.  See  the
Section  on  Tax Effects of Participation in the Plan.  The  AFG  RASP  is  a
"defined
       
                                    - 7 -
contribution" type of plan under the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").  See the Section on Rights under ERISA.

       This  document  does not describe completely all of the provisions  of
the  RASP.   In  the  case of any conflict or apparent conflict  between  the
following description of the RASP and the full text of the AFG RASP, the Plan
Document   will control.  Copies of the Plan Document are available from  the
Plan Administrator, and will be provided to you upon written request.

II.    ADMINISTRATION

       A.     Employers

       Employees  of  the  Company  and  certain  of  its  subsidiaries   may
participate in the AFG RASP.  The Company and each of these subsidiaries  are
sometimes  referred  to  as  an "Employer."  A  complete  list  of  Employers
participating  in  the  AFG RASP may be obtained by written  request  to  the
Company, and is also available for inspection at the Company, at the  address
given on the cover of this document.

       The  Company's  IRS Employer Identification Number is  31-1422526  and
the Plan Identification Number is 001.

       B.     Plan Administrator

       The Plan Administrator is:

                              Administrative Plan Committee
                              American Financial Group, Inc.
                              One East Fourth Street
                              Cincinnati, Ohio  45202
                              (513) 579-2121

       The  AFG RASP is administered by a committee (the "Administrative Plan
Committee"  or  the "Plan Administrator").  The members of the committee  are
selected from time to time by
       
                                    - 8 -
the  Company's  Board of Directors.  The Administrative  Plan  Committee  may
adopt  rules  and regulations necessary to carry out and administer  the  AFG
RASP  and  has  full power and authority to construe and interpret  the  Plan
Document.   Under  the  AFG  RASP,  decisions  and  determinations   of   the
Administrative  Plan Committee are final and binding on all  parties  to  the
extent permitted by law.

       The  Administrative Plan Committee, in its capacity as a fiduciary  of
the  AFG RASP, has general authority and discretion to manage and control the
assets  of the AFG RASP and to direct the Trustee as to their investment  and
reinvestment to the extent that such decisions are not participant  directed.
The  Administrative Plan Committee is also responsible to select  and  review
the performance of (and change, if necessary,) the investment funds available
under the RASP.  See the Section on Investment of Contributions.

       C.     Plan Trustee

       The  current  trustee  of  the AFG RASP is Wilmington  Trust  Company,
Rodney  Square  North, 1100 North Market Street, Wilmington, Delaware  19890-
0001  (the "Trustee").  The Board of Directors of the Company may remove  the
Trustee and appoint a successor trustee at any time.  The Trustee manages the
assets  of the AFG RASP and, in general, deals with these assets as  directed
by  the Administrative Plan Committee for the retirement account and matching
account and as directed by each participant for all other accounts.

       D.     Plan Records

       The  AFG  RASP  operates on, and all of its records  are  kept  on,  a
calendar  year basis beginning January 1 and ending December 31 of each  year
(a "Plan Year").

                                    - 9 -
E.     Service of Process

       The agent for service of process for the AFG RASP is:

                              Corporate Secretary
                              American Financial Group, Inc.
                              One East Fourth Street
                              Cincinnati, Ohio  45202

       Service  of process may also be made on the Trustee or any  member  of
the Administrative Plan Committee.

III.   ELIGIBILITY REQUIREMENTS

       A.     Participants in Consolidated Plans

       If  you  were  a  participant  in any of  the  Consolidated  Plans  on
December 31, 1996, you will continue as a participant in the AFG RASP  as  of
January  1,  1997.    You  must  still  be  employed  by  the  Company  or  a
participating subsidiary of the Company on January 1, 1997 to continue  as  a
participant.  If you are an employee  who was eligible as a participant  only
in  the  401(k) portion of the Group RASP, you will continue as a participant
in the  AFG RASP for purposes of 401(k) savings only and will become eligible
for the retirement account contribution as described below.

       B.     Other Participants

       Participants on January 1, 1997.  Subject to the exceptions below,  if
you  (i)  were not a participant in any of the Consolidated Plans, (ii)  have
completed  one  year  of  service (or for purposes  of  401(k)   savings  and
matching  contributions, 90 days of service) as of January 1,1997, and  (iii)
are  employed by the Company or a participating subsidiary of the Company  on
that date, you will be eligible to participate on January 1, 1997.

       Eligibility  for  401(k) Savings and Matching Contributions.   Subject
to  the exceptions below, you will become eligible to participate in the  AFG
RASP for 401(k) savings and matching
       
       
                                   - 10 -
contributions as soon as administratively feasible after completing 90 days
of service with the Company or a participating subsidiary of the Company (and
you are still employed on that date).

       Eligibility  for  Retirement Account Contributions.   Subject  to  the
exceptions  below, you will become eligible to participate in  the  AFG  RASP
for  retirement account contributions on the
January 1 or July 1 after completing one year of service with the Company  or
a  participating  subsidiary  of the Company (and you are still  employed  on
that date).

       Notwithstanding  the above, if you were hired on  or  before  December
31,  1996 and you were a participant from the Republic Plan, you will  become
eligible  to participate in the RASP for retirement account contributions  on
the  first January 1, April 1, July 1 or October 1 after completing one  year
of service with the Company or a participating subsidiary.

       Eligibility  for  Rollover Contributions.  Subject to  the  exceptions
below,  you  will be eligible to make a rollover contribution before  meeting
the  service  requirements, if you would otherwise be eligible to participate
in the RASP.

       Service.   "Service" is determined in completed years and  days,  with
each  consecutive  12-  month period beginning  on  your  date  of  hire  and
anniversaries  thereof constituting one year of service.  In addition,   each
consecutive  90 day period beginning on your date of hire are  considered  90
days  of  service  for purposes of making 401(k) contributions.   Periods  of
employment  with an Employer or a subsidiary, including periods during  which
you were considered eligible under the Consolidated Plans prior to January 1,
1997, will be recognized as service for the AFG RASP.

       Excluded  Employees.  You are not eligible to participate in  the  AFG
RASP if:

       -      you  are  included  in  a  unit  of  employees  covered  by   a
               collective  bargaining agreement if retirement  benefits  were
               the  subject  of  good faith bargaining between  the  employee
               representatives and the Employer;

                                   - 11 -
-      you are not a United States citizen or resident alien;

       -      you are a "leased employee" (as defined in the Plan Document);

       -      you are self-employed; or
       
       -      you  are covered by another qualified retirement plan sponsored
               by the Company or a subsidiary of the Company.

IV.    ENROLLMENT AND PARTICIPATION IN THE PLAN

       If  you are an eligible employee, you will become a participant in the
AFG  RASP and may begin making 401(k) contributions by following the election
procedures set forth in the Section below on 401(k) Contributions.   Even  if
you do not make 401(k) contributions,  you will automatically be eligible  to
receive  an  Employer contribution to the retirement account upon eligibility
to  participate in the AFG RASP (as described above by completing a  year  of
service).

       You  may  continue participation in the AFG RASP  until you  terminate
employment  with  all Employers.  If you are a former employee  (including  a
former participant from any of the Consolidated Plans), you will continue  as
a Member of the RASP for as long as you maintain an account.  If you transfer
to  a  non-participating Employer, you will not be eligible  to  receive  any
further   Employer  contributions,  make  salary  deferrals  or   receive   a
distribution from the AFG RASP, as long as you are in active service.

V.     CONTRIBUTIONS AND ACCOUNTS

       A.     Employer Contributions

       General.   All  retirement  account contributions  made  on  or  after
January  1,  1997 are required to be invested primarily in the AFG Retirement
Fund.   The  AFG  Retirement Fund is invested in AFG  securities  unless  the
Trustee is otherwise directed by the
       
                                   - 12 -
Administrative Plan Committee (See the Section below on the AFG Retirement
Fund).  All matching contributions to the 401(k) savings account made on or
after January 1, 1997, are required to be invested in the AFG Common Stock
Fund.

       Employer  Retirement Account Contributions.  The Company may,  in  the
discretion  of its Board of Directors, have each Employer make  a  retirement
account  contribution for any Plan Year.  The contribution, if  any,  may  be
made  in cash, in AFG Common Stock or other AFG securities.  The contribution
may  only be made on your behalf if you are actively employed by the Employer
on  the  last  day of that Plan Year.  If you die, retire or become  disabled
during the Plan Year, you are deemed to have been employed on the last day of
the  Plan Year.  The retirement account contribution is allocated to  you  in
proportion to your covered compensation (as described below in the Section on
Participant Contributions).

       Matching  Contributions.  The Company may, in the  discretion  of  its
Board  of  Directors, have each Employer make a  matching contribution.   The
contribution,  if any, may be made  in cash or  in AFG Common Stock  for  any
Plan  Year.  This contribution may be made on your behalf if you made  401(k)
contributions  during  the Plan Year, and you are actively  employed  by  the
Employer  on the last day of that Plan Year.    If you die, retire or  become
disabled  during the Plan Year, you are deemed to have been employed  on  the
last  day of the Plan Year.  Matching contributions will be allocated to your
matching account based on the amount of 401(k) contributions made by you  and
your covered compensation.

       B.     Participant Contributions

       401(k)   Contributions.   You  may  direct  the   Employer   to   make
contributions   from  your  covered  compensation  directly   as   a   401(k)
contribution  on  a pre-tax basis.  Payment of  your 401(k)  contribution  is
made  by  payroll  deduction  with the deducted amounts  contributed  by  the
Employer  to  the AFG RASP on your behalf.  Amounts you defer may  receive  a
matching contribution (see the Section above  on Matching Contributions).
       
                                   - 13 -
-       Election Procedure.  At any time throughout  the  year
               after  meeting the eligibility requirements, you may elect  to
               make  pre-tax  contributions to your 401(k)  savings  account.
               This election may be changed or stopped at any time.  The Plan
               Administrator  may  make rules and procedures  regarding  this
               election and any changes.
       
       -      Contribution Limit.  You may make 401(k) contributions  of  any
               percent  of your covered compensation in whole percentages  up
               to 13%.  Federal law imposes annual limits on the amounts that
               may  be deferred and these limits may be changed each year  as
               required by law or as determined by the Company.
       
                        -       Covered  Compensation.   The  term   "covered
               compensation"  means  the  amount paid  to  you  for  services
               rendered  as  regular  salary and/or  hourly  wages  including
               overtime   and   bonuses,  but  expense  account   allowances,
               settlement  payments, per diem payments, deferred compensation
               arrangements  and  long-term  incentive  bonus  pay  are   not
               included. Any elective deferrals under the AFG RASP or another
               plan  qualified under Sections 401(k), 125 or 402(h) or  other
               similar types of plans of the Employer are included as covered
               compensation.   Covered compensation does not include  amounts
               paid  before  you  are an eligible participant.   The  maximum
               amount  of covered compensation on which contributions may  be
               based  is limited by law and is subject to adjustment  by  the
               Secretary of the Treasury for increases in the cost of living.

       -      Change  in Rate of Contributions.  You may change the  rate  of
               your 401(k) savings by calling AFG In-Touch at 1-800-458-2387.
               Any  such change will be effective as soon as administratively
               feasible and will only apply to covered compensation  not  yet
               earned as of the date of the change.

                                   - 14 -
-      Termination  of  Contributions.   You  may  discontinue  making
               401(k)  contributions to the AFG RASP by calling AFG  In-Touch
               at  1-800-458-2387.   If you stop making 401(k) contributions,
               you   may  begin making contributions again only after calling
               AFG  In-Touch. If you stop making contributions, your existing
               accounts will remain invested as directed by you and  will  be
               held for you under the RASP.

       -      After-Tax  Contributions.  After-tax contributions to the  RASP
               are not permitted.  However, if you are a participant from the
               Staff  RASP  or  the  Group RASP, you  may  have  had  amounts
               transferred from such plan to your after-tax  account  in  the
               AFG RASP.

       -      Rollover  Contributions.   If you  are  a  participant,  or  an
               employee  who  has  not yet satisfied the  Plan's  eligibility
               requirements, but will otherwise be covered by the  AFG  RASP,
               you  may  make a rollover  contribution in cash or AFG  Common
               Stock  to the RASP  with the consent of the Plan Administrator
               and  Trustee  (which  will be granted in  a  nondiscriminatory
               manner).

       C.     Participant Accounts

       You may have the following accounts:

       Retirement  Account  to  which retirement  account  contributions are
allocated.   Included  in  this  account  are  the  amounts  transferred for
participants from the AFC ESORP, the APU ESORP and the Transport  Plan.  You
cannot direct the investment of funds in this account.

       401(k)  Savings  Account  to  which  your  401(k)  contributions  are
allocated.  You direct the investment of funds in this account.

                                   - 15 -
Matching   Account  to  which  Employer  matching  contributions   are
allocated.   You  cannot direct the investment of the funds in  this  account
since they are all invested in the AFG Common Stock Fund.   However,  if  you
are a participant from the Staff RASP, the Group RASP or the Leader Plan, you
may  direct  a  portion of the matching contributions  made  for  you  before
January 1, 1997.

       Rollover  Account  to  which  rollover  contributions  are  allocated.
Rollover  contributions may be made by you if you are  a  participant  or  an
employee  who  has  not yet satisfied the eligibility requirements,  but  who
would   otherwise be eligible to be covered by the AFG RASP.  You direct  the
investment of funds in this account.

       Prior  Profit  Sharing Account to which prior profit sharing  accounts
are  transferred  for you if you were a participant in the  Staff  RASP,  the
Group  RASP,  or the Leader Plan.  No future contributions will  be  made  to
this account.  You direct the investment of funds in this account in the same
way as in your prior plan as of December 31, 1996.

       After-Tax  Account  to which after-tax contributions  are  transferred
for you if you were a participant in the Staff RASP or the Group RASP and had
made   after-tax  contributions.   No  future  after-tax  contributions   are
permitted to be made to this account.  You direct the investment of funds  in
this account.

       Retirement Rollover Account to which the retirement rollover  accounts
are  transferred for you if you were a participant in the Staff RASP or   the
Group  RASP.   No  future contributions will be made to  this  account.   You
direct the investment of funds in this account.

       Your  accounts also have allocated to them the proportionate share  of
earnings  (or  losses) and appreciation (or depreciation) of  the  investment
funds  in  which  such  contributions  are  invested.   See  the  Section  on
Investment of Contributions.

                                   - 16 -
You  will receive a written statement of the value and status of  your
accounts  under  the AFG RASP  once each calendar quarter  during  each  Plan
Year.

       D.     Limitations on Contributions to the Plan

       Federal  tax  laws limit 401(k) savings and Employer contributions  as
follows:

       401(k)  Contributions.  Your 401(k) savings cannot exceed  limits  set
by  federal  law  in any calendar year.  (See the Section  above  on   401(k)
Contributions.)

       Federal  tax laws also establish formulas for determining the  maximum
percentage  of compensation which may be contributed to the AFG RASP  by  all
participants who are "highly compensated employees".  Amounts contributed  in
excess  of  the limitation are refunded.  In addition, the Company may  limit
the  amount a highly compensated employee may contribute during the  year  in
order to meet these limits.

       Overall Limitations on Contributions to the Plan.  Your annual  401(k)
savings,   Employer  contributions  (including  matching  contributions   and
retirement  contributions) and forfeitures are limited by federal  law.   Any
excess  401(k) savings are returned to you; any excess Employer contributions
or forfeitures are used to reduce contributions for the next Plan Year.

VI.    INVESTMENT OF CONTRIBUTIONS

       A.     Responsibility for Selection of Investment Options

       You  are responsible for allocating among the various investment funds
the  amounts in those accounts which you are entitled to direct.  Neither the
Trustee, the Plan Administrator nor any officer or employee of the Company or
other  Employer may advise you as to the manner in which your accounts should
be  invested.   The fact that an investment fund is available under  the  AFG
RASP  should  not  be  construed as a recommendation for investment  in  that
investment fund.

                                   - 17 -
You  should keep in mind that the investment alternatives of  the  AFG
RASP  are  subject  to normal market risks.  The proceeds realized  from  the
investments depend on the prevailing market price at a particular time, which
may be more or less than the amount invested.

       B.     Investment of Participant Contributions

       Participant  contributions to the AFG RASP  may  be  invested  by  the
participant  in  any one or more of the following investment  funds  selected
from time to time by the Plan Administrator:

       U.S. Treasury Fund of America

       Objective:                Seeks  to  protect your savings and  provide
                                 regular  income and liquidity  (the  ability
                                 to convert assets to cash).
       
       About the Fund:           The  fund invests solely in short-term  U.S.
                                 Treasury securities maturing in one year  or
                                 less.   These are direct obligations of  the
                                 U.S. government and therefore backed by  the
                                 government's "full faith and credit"  pledge
                                 to  repay  investors.  To  you,  that  means
                                 repayment  of  principal  and  interest   is
                                 guaranteed by the U.S. government.
       
       Risk vs. Return:          This    fund    is    best   described    as
                                 conservative.    Although  there  is  little
                                 risk  of  the participant losing savings  by
                                 investing  in  this fund,  there  is  little
                                 growth opportunity and higher risk that  the
                                 investment  will  not  sufficiently  outpace
                                 inflation.
       
       Bond Fund of America

       Objective:               Seeks  to  maximize current income (from  the
                                interest  payments made on its  bonds)  while
                                maintaining  liquidity  and  preserving   the
                                participant's savings.
       
                                   - 18 -
About the Fund:          The  fund  invests in a combination of  high-
                                grade  corporate bonds, U.S.  Treasury  bonds
                                and  asset-backed securities.  At times, non-
                                U.S.  bonds  and other lower-rated securities
                                may  also  be  part of the portfolio.   Since
                                the  fund  invests in more than one  type  of
                                security, it has the opportunity to seek  out
                                the   best  values  (generating  the  highest
                                returns)  in the bond market without  risking
                                principal.
       
       Risk vs. Return:         While   still   a   conservative   investment
                                choice,  the Bond Fund of America is actively
                                managed  to offer higher returns than  short-
                                term  bonds.   Because it includes  different
                                types of bonds, this fund is subject to  some
                                price swings.  The risk may be offset by  the
                                greater  growth potential and the  moderately
                                high income it provides.

       American Balanced Fund

       Objective:               Seeks  to  protect your savings  and  provide
                                both   high  current  returns  and  long-term
                                growth opportunity.
       
       About the Fund:          The  fund  invests over 50% of its assets  in
                                U.S.  company  stocks in key sectors  of  the
                                economy,  health, energy, banking,  utilities
                                and  telecommunications.   The  remainder  of
                                the   assets   are  invested  in   high-grade
                                corporate  and government bonds,  convertible
                                securities and cash equivalents.
       
       Risk vs. Return:         With  its mix of asset classes, this fund  is
                                well  diversified.  It's investment  strategy
                                offers moderately higher returns and a  long-
                                term  growth opportunity than the  first  two
                                funds.
       
                                   - 19 -
Seven Seas 500 Index

       Objective:               To  provide investors with income and growth,
                                the  fund invests exclusively in stocks.   It
                                seeks  to  replicate the performance  of  the
                                Standard  and  Poor's  500  Composite   Stock
                                Price  Index,  the most popular benchmark  of
                                stock market performance.
       
       About the Fund:          The  fund  attempts to mirror the performance
                                of  the  stock market as a whole by investing
                                in  the 500 stocks held in the index.   These
                                represent  each  major  sector  of  the  U.S.
                                economy   ,   from   consumer   services   to
                                technology to financial services.
       
       Risk vs. Return:         In  the  short term, this fund's  value  will
                                fluctuate   more  than  the  Balanced   Fund.
                                However,  since only a small portion  of  the
                                fund's  total assets is invested in a  single
                                stock, extreme price swings in any one  stock
                                are  minimized by the overall performance  of
                                all stocks in the fund.

       Fidelity Advisor Growth Fund

       Objective:              Seeks  to  provide  investors  with  long-term
                               capital appreciation.
       
       About the Fund:         The  fund  invests in common stock,  preferred
                               stock  and  securities convertible  to  common
                               stock  of  U.S.  and  international  companies
                               with   above-average  growth  in   sales   and
                               earnings.    In   addition  to  investing   in
                               company  stocks,  the  fund  also  invests  in
                               opportunities such as debt securities.
       
       
                                   - 20 -
Risk vs. Return:        The  fund offers the opportunity for long-term
                               gains.   Since  it  bears the  risk  that  the
                               companies  in  which  it  invests   will   not
                               perform  as  well  as expected,  there  is  no
                               guarantee  of a positive return  or  that  you
                               will not lose any principal.
       
       MFS Emerging Growth Fund

       Objective:               Like  the Fidelity Advisor Growth Fund,  this
                                fund   seeks  to  provide  long-term  capital
                                appreciation.
       
       About the Fund:          The  fund invests mostly in common stocks  of
                                start-up,  small- and medium- sized companies
                                in   a   variety  of  industries.   The  fund
                                chooses  companies with projected  growth  of
                                at  least 20% a year.  In addition, the  fund
                                may  invest  up  to  25%  of  its  assets  in
                                foreign securities.
       
       Risk vs. Return:         This    fund's    investment   strategy    is
                                aggressive,  it  takes chances  on  companies
                                with  relatively short track records.   These
                                shares  may  experience more dramatic  swings
                                in  short-term value.  In the long-term, such
                                aggressive  funds  tend  to  outperform  more
                                conservative  investments, but  this  is  not
                                guaranteed.   For investors willing  to  take
                                on   more   risk,  this  fund   offers   high
                                potential for long-term growth.
       
       Templeton Foreign Fund

       Objective:               This  fund seeks to provide long-term capital
                                growth  and  does  not  emphasize  short-term
                                growth or income.
       
       About the Fund:          Templeton  invests exclusively in stocks  and
                                bonds  of  governments and companies  outside
                                the  U.S.   The general strategy  focuses  on
                                investing  in  companies and  governments  of
                                emerging    countries,    where    investment
                                managers expect the most growth.
                                   - 21 -
Risk vs. Return:         This  fund  is best considered an  aggressive
                                and  risky  mutual  fund.   Since  this  fund
                                invests  in securities denominated in foreign
                                currencies,  the  short-term  value  of  this
                                fund  may  have more dramatic swings  than  a
                                fund  denominated in U.S. dollars.  The value
                                of  some  foreign currencies in dollar  terms
                                may  fluctuate  more over  short  periods  of
                                time.   Investments in securities  traded  in
                                these  markets are made in local  currencies,
                                the  performance of which is  linked  to  the
                                economic  and  political  stability  of  that
                                country.
       
       AFG Common Stock Fund

       Objective:               To   allow  participants  to  share  in   the
                                success  and  growth of AFG by owning  shares
                                in  AFG.   It  offers potential  for  capital
                                appreciation     (through    market     price
                                increases),  and  investment income  (through
                                dividends).
       
       About the Fund:          The  fund invests solely in AFG Common Stock,
                                except    for   temporary   investments    of
                                available   cash  held  pending   investment.
                                Cash  dividends  paid in  respect  of  shares
                                held  by  the Fund, and earnings on temporary
                                cash  investments of the Fund, less expenses,
                                are  invested in additional shares of  Common
                                Stock  and  are  credited proportionately  to
                                your  account in the Fund.  Similarly, Common
                                Stock received by the Trustee by reason of  a
                                stock   dividend,  stock  split  or   similar
                                transaction  is  credited proportionately  to
                                each    account    in    the    Fund.     The
                                Administrative  Plan  Committee  will  direct
                                the  Trustee on the voting of all  shares  of
                                Common   Stock  allocated  to  your  account.
                                Interests in
       
       
                                   - 22 -
AFG Common Stock Fund are valued
                                upon the closing price of the Capital Stock
                                on the New York Stock Exchange on the most
                                recent trading date coinciding with or
                                preceding the valuation date.
       
       Risk vs. Return:         Because  it  invests  in only  one  company's
                                stock, this fund has the highest risk of  the
                                investment  options in the AFG RASP.   It  is
                                not  a  mutual  fund and offers  no  built-in
                                diversification or liquidity.
       
       In  addition,  some  participants  may  have  part  of  their  account
invested  in  the Confederation Life Fund.  This fund has been  frozen  since
1994.   No  future contributions or loan repayments may be directed  to  this
fund,   nor  can  existing  account  balances  be  invested  in  this   fund.
Participants cannot transfer, withdraw (either while in-service or as a final
distribution)  or  borrow   from this fund.  This  fund  cannot  be  used  as
collateral for a loan.

       C.     Investment of Employer Contributions

       All  contributions  to the retirement account may be  made  either  in
cash,  in AFG Common Stock, or other AFG securities and will be allocated  to
the  AFG Retirement Fund unless otherwise directed by the Administrative Plan
Committee.   The AFG Retirement Fund invests in securities of AFG  and  other
subsidiaries, except for temporary investments of available cash held pending
investment.  All contributions to the matching account may be made either  in
cash  or  in  AFG Common Stock and will be allocated to the AFG Common  Stock
Fund   described   above  in  the  Section  on  Investment   of   Participant
Contributions.

       Cash  dividends  paid in respect of shares held by the AFG  Retirement
Fund  and  earnings on temporary cash investments of the Fund less  expenses,
are  invested  in  additional  shares of  AFG  securities  and  are  credited
proportionately  to your account in the Fund.  Similarly, stock  received  by
the Trustee by reason of a stock dividend, stock split or similar transaction
is credited
       
       
                                   - 23 -
proportionately to each account in the Fund.  The Administrative Plan
Committee will direct the Trustee on the voting of all shares of stock
allocated to your account.  Interests in the AFG Retirement Fund are valued
upon the closing price of the Stock on the applicable Stock Exchange on the
most recent trading date coinciding with or preceding the valuation date.

       D.     Diversification

       If  you have attained the age of 55 and are fully vested, you have the
right  to  diversify  a  portion of the assets  in  your  retirement  account
invested in the AFG Retirement Fund and your matching account invested in the
AFG  Common Stock Fund in the year after you turn age 55.  During  the  first
four  years  of  the  diversification period, you may  elect  to  direct  the
investment  of up to a total of 25% of the AFG Retirement Fund held  in  your
retirement  account  and  the AFG Common Stock Fund  held  in  your  matching
account.  In the fifth year, you may elect to direct the investment of up  to
an  overall  total  of 50% of that amount.  If you elect  to  diversify,  the
applicable  percentage of the AFG Retirement Fund and the  AFG  Common  Stock
Fund (on a pro rata basis) is transferred as you direct.  The earnings on any
amount  you  elect  to  diversify will automatically  be  reinvested  as  you
directed.   In  addition,  the  total dollar amount  you  may  diversify  may
increase each year because of earnings attributed to the AFG Retirement  Fund
and the AFG Common Stock Fund.

       For  example, assume you had a total account balance of $50,000.  This
includes $25,000 in the AFG Retirement Fund, $10,000 in the AFG Common  Stock
Fund  attributable  to matching contributions and $15,000 invested  in  other
funds.   In the year after you reach age 55, you may diversify up to  25%  of
your AFG Retirement Fund ($25,000) and AFG Common Stock Fund ($10,000).  That
would  amount  to $8,750 (25% of $35,000) being available to  direct  to  the
other investment funds.  If you chose not to diversify the entire 25% in  the
first  year, you could still choose to do so until the fourth year.   In  the
fifth  year,  you could diversify an additional 25% (or another $8,750)  from
those two funds for a total of 50% diversification.  Please note this example
does not reflect additional amounts that may be diversified each year because
of earnings from the funds.

                                   - 24 -
E.     Changes in Investments

       You  may change the investment of future contributions and/or transfer
prior  contributions  among Investment Funds by calling  AFG  In-Touch.   The
change in investment decision becomes effective as soon as practicable  after
such  notice is given.  You may change the investment of future contributions
as  of any day of the calendar quarter.  You may only elect to transfer prior
contributions  already  invested  once  each  calendar  quarter.   Except  as
previously  noted,  you may not transfer assets allocated to your  Retirement
Account and Matching Account (See the Section above on Diversification).

       F.     Management of the Funds

       The  Trustee,  the  Plan  Administrator and  any  Investment  Managers
appointed by the Plan Administrator manage the investment funds for the  sole
and  exclusive benefit of you and all the participants.  Neither the  Company
nor  any other Employer has any right, title or interest in contributions  to
the  Plan,  although any excess or other contributions made by a  mistake  of
fact  by  an Employer may be returned to the Employer.  Each investment  fund
may  be  charged any fees, commissions or other expenses associated with  the
investment  transactions of the investment fund.  No charges are incurred  if
and  when securities are purchased from the Company for the AFG Common  Stock
Fund  and  the  AFG  Retirement Fund.  The Plan  Administrator  may,  in  its
discretion, change any investment fund at any time.

       The  Plan Administrator may, in its discretion and at any time, change
the  investment  guidelines for any investment fund, appoint  or  change  any
Investment Manager selected for a fund, or change any investment fund or  any
mutual  fund.  In addition, the Plan Administrator may restrict transfers  to
and  from  the AFG Common Stock Fund, the AFG Retirement Fund,  or  any  fund
consisting of a guaranteed investment contract.
       
VII.   VESTING UNDER THE PLAN

       Any  amounts transferred from the Consolidated Plans that  were  fully
vested  before  the  consolidation  will continue  to  be  fully  vested  and
nonforfeitable.

                                   - 25 -
You  become vested in your retirement account and prior profit sharing
account in accordance with the following schedule:
               Years of Service                     Vested Percentage

               Less than 5 years                              0%
               5 years or more                              100%

       You  become  vested  in your matching account in accordance  with  the
following schedule:

               Years of Service                     Vested Percentage

               1 year but less than 2 years           25%
               2 years but less than 3 years          50%
               3 years but less than 4 years          75%
               4 years or more                       100%

       You  become  automatically vested in the full value of your retirement
account,  matching  account  and  prior  profit  sharing  account  upon   the
occurrence of any of the following:

               -       attainment of age 60 (the normal retirement age  under
               the AFG RASP);

               -      total disability or death while an active employee;

               -      complete discontinuation of Employers' contributions to
               or termination of the AFG RASP; or

               -       attainment  of age 55 with 5 years of  service  (early
               retirement age) if you were a participant in the Staff RASP or
               the Group RASP on or before January 1, 1997 (you will be fully
               vested in your retirement account and matching account).

       Notwithstanding  the above, if you were a participant  in  the  Leader
Plan  as  of  December  31, 1996, you will always be  fully  vested  in  your
retirement  account, matching account and prior profit sharing  account.   If
your  prior  profit sharing account was transferred from the Group  RASP,  it
will always be fully vested.
       
                                   - 26 -
If you were an employee of American Premier as of December 31, 1996
who would have become a participant in the Staff RASP or the Republic Plan
which was merged into the APU ESORP, you will become vested in your
retirement account in accordance with the following schedule:

               Years of Service                     Vested Percentage

               Less than 3 years                          0%
               3 years but less than 4 years             20%
               4 years but less than 5 years             40%
               5 years or more                          100%

       Service  is  determined  from your date of  hire.   You  will  receive
credit for a year of service for each 12 consecutive month period you work.
       
       Please   note  that  you  are  always   fully  vested   and   have   a
nonforfeitable interest in the full value of the following accounts:

       -       401(k) savings account (your pre-tax contribution);

       -       after-tax account;

       -       retirement rollover account; and

       -       rollover account.

VIII.  DISTRIBUTIONS WHILE STILL EMPLOYED

       A.     In-service Withdrawals

       General.   You  may only request one in-service withdrawal  every  six
months  during  any  calendar year and such withdrawals must  come  from  the
accounts in the order set out below.

       Regular  Withdrawal.  By calling AFG In-Touch, you  may  request,  for
any  reason, an in-service withdrawal in cash from your after-tax account (if
any) and your rollover account.  In
       
                                   - 27 -
addition, if you were a participant of the Staff RASP or the Group RASP, you
can withdraw from your vested matching account from the prior plan, excluding
contributions made in the last 24 months.

       Age  59  1/2 Withdrawal.  By calling AFG In-Touch, if you are  age  59
1/2, you may request an in-service withdrawal of the amount available under a
regular  withdrawal plus the value in your 401(k) account.  In  addition,  if
you  were a participant of the Staff RASP or the Group RASP, you can withdraw
the  remaining vested balance in your matching account from the  prior  plan.
If  you  were  a  participant in the Leader Plan, you can also  withdraw  the
vested  balance in your matching account from the prior plan.  An age 59  1/2
withdrawal can be paid in cash or AFG Common Stock (to the extent invested in
the AFG Common Stock Fund), as you elect.

Amounts  withdrawn  are  subject to income tax  and  may  be  subject  to  an
additional excise tax if you are not age 59 1/2.

       B.     Loans From Plan

       You,  or  an employee who has made a rollover contribution, may,  with
the approval of the Plan Administrator, borrow amounts (not less than $1,000)
from  any  of  your  accounts except your retirement account,   prior  profit
sharing account, and retirement rollover account.  The Plan Administrator may
require  that a request for a loan be submitted within a certain time  period
prior  to  such  date.   Each loan will be made as soon  as  administratively
possible  after such request.  You may not have any more than two outstanding
loans  at any time (however, all existing loans will be transferred from  the
Consolidated Plans to the AFG RASP regardless of the number).

       Loans  are  made in accordance with the participant loan  program,  as
set  forth  in  a  separate written document which identifies  the  person(s)
authorized  to  administer the program and specifies the procedure  for  loan
applications, the basis on which loans are approved or denied, limitations on
the  types  and amount of loans, the procedure for determining  a  reasonable
rate of
       
                                   - 28 -
interest, the types of collateral which may secure a loan and the events
constituting a loan default.  A copy of the loan package may be obtained by
calling AFG In-Touch.  The loan program may be modified or amended from time
to time, and the Plan Administrator may establish other rules relating to
loans.  Each loan, however, is subject to the following principal conditions:

       1.     The  term  of the loan may not exceed 54 months (120 months  in
               the  case  of a loan used for the purchase or construction  of
               your  principal residence) and shall be due and  payable  upon
               your termination of employment;

       2.     The loan must bear a reasonable rate of interest;

       3.     The  loan must be evidenced by a promissory note and secured by
               your  account;

       4.     Loans  must  be repaid in level payments over the term  of  the
               loan, and made only through payroll withholding; however,  the
               Plan  Administrator may allow prepayment of the entire balance
               by other means;

       5.     If  a  loan  is  secured by your account that is subject  to  a
               qualified  joint and survivor annuity form of benefit, you and
               your  spouse (if any) must consent to the loan and the  amount
               of security; and

       6.     The maximum amount of the loan is the lesser of:

               a.     $50,000   reduced  by  the  highest  outstanding   loan
                      balance in the preceding twelve-month period;
               b.     50%  of  the  total  value  of  the  401(k),  matching,
                      rollover,  after-tax,  retirement  rollover  and  Staff
                      RASP profit-sharing accounts; or

               c.     the  value  of  the  after-tax,  rollover,  401(k)  and
                      vested matching accounts.

7.     Loans  may  not be used to purchase securities or to maintain,  reduce
       or retire another debt originally used to purchase securities.

                                   - 29 -
To  the extent that your loan is unpaid at the time of distribution from your
accounts, the unpaid loan amount will not be part of the distributed  amount,
but will be taxed to you as if it had been distributed.

       C.     Hardship Withdrawals

       Under certain limited circumstances and with the approval of the  Plan
Administrator, you may withdraw amounts from your after-tax account, rollover
account  (but  not your retirement rollover account), 401(k) savings  account
(but not the income earned on 401(k) savings after December 31, 1988) and the
vested portion of your matching account, less the outstanding balance of  all
loans  made to you.  To assure that savings will be used for long-term needs,
such  as  retirement,  and to conform to federal law,  the  Plan  limits  the
availability of these withdrawals.

       Hardship  withdrawals  may  only be  made  (a)  in  the  event  of  an
immediate and heavy financial need and (b) if the withdrawal is necessary  to
satisfy  that  need  because the expenses cannot be paid for  out  of  liquid
assets  or  current cash flow or otherwise reasonably financed.  An immediate
and  heavy financial need is limited (under IRS regulations) to the following
situations:
       
               -      purchase of your primary residence;

               -      post-secondary education for a person in your immediate
               family for the next 12 month period;

               -       expenses previously incurred by you,  your  spouse  or
               any  dependents because of medical expenses or  necessary  for
               those persons to obtain medical care; and

               -      funds needed to prevent eviction from or foreclosure on
               your primary residence.

       Your  request  for a hardship withdrawal will be deemed  necessary  to
satisfy the financial need if all of the following requirements are met:

                                   - 30 -
-       the withdrawal does not exceed the amount necessary to
               satisfy   the   need  (including  anticipated  federal   taxes
               resulting from the distribution); and

               -      you have obtained all other available distributions and
               nontaxable loans under the AFG RASP.

       In  addition,  the following restrictions will be applied  after  your
hardship withdrawal if any portion of the withdrawal is paid from your 401(k)
savings account:

               -       your  401(k) savings will be suspended for  12  months
               after receipt of the withdrawal; and

               -      your 401(k) savings in the Plan Year following the year
               of  the  hardship  withdrawal may not  exceed  the  difference
               between the maximum amount that may be deferred for that  plan
               year and the amount of  your 401(k) savings in the year of the
               withdrawal.

       The Plan Administrator reviews each withdrawal request and decides  if
it  meets these requirements. Hardship withdrawals are subject to income  tax
and  may also be subject to an additional 10% penalty tax if the distribution
occurs  before age 59 1/2.  No hardship withdrawal may  be less than  $1,000  or
exceed  the  balance  of  your after-tax account,  rollover  account,  vested
matching account and 401(k) savings account.

       D.     Assignment of Benefits

       Your  interest in the AFG RASP may not be sold, transferred, assigned,
pledged,  garnished or encumbered in any way, and any attempt  to  do  so  is
void,  except  in  the case of a court order granted under  certain  domestic
relations laws and participant loans (see section above on Loans from Plan).

IX.    DISTRIBUTIONS AFTER EMPLOYMENT ENDS

       A.     Distributions    Upon   Retirement,   Death,   Disability    or
               Termination of Employment

       Upon  your  retirement or after age 60 (or, if you were a  participant
in the Staff RASP or the Group RASP on or before
                                   - 31 -
January 1, 1997, age 55 with 5 years of service) or your total disability or
death, the full value of all of your accounts is distributed to you upon your
request, or to your beneficiary in the case of your death.  If your
employment terminates for any other reason, you may receive the full value of
your 401(k) savings, after-tax contributions, retirement rollover and
rollover contributions accounts (if any) plus the vested portion of your
retirement account, matching account and prior profit sharing account.

       B.     Commencement of Distributions

       Generally,  distributions from your 401(k) savings,  matching,  after-
tax,  prior  profit sharing, retirement rollover and rollover  accounts  will
begin  as soon as practicable after your termination of employment.  However,
distributions  from your retirement account (except amounts  if  you  were  a
participant  from  the Republic portion of the APU ESORP) may  only  be  made
after  you have had five consecutive one-year periods of severance.   A  one-
year  period  of  severance  occurs when you  are  not  employed  for  a  12-
consecutive month period.  You  may elect to defer distribution no later than
your 65th birthday.

       C.     Forms of Distributions

       Distributions from the AFG RASP are paid as follows:

               -      401(k) savings account, matching account
                      (before   January  1,  1997),  prior   profit   sharing
                      account,  rollover  account,  after-tax  account,   and
                      retirement rollover account will be paid in either:

                         -    a single lump sum in cash
                              or  in  AFG Common Stock to the extent invested
                              in the AFG Common Stock Fund; or

               -      by  a  direct rollover to an individual
                      retirement account or annuity (an "IRA") or to  another
                      qualified plan that accepts rollovers.

                                   - 32 -
-      Retirement account and matching account (amounts after
                      January 1, 1997), will be paid in:

               -      the  form of AFG Common Stock,  to  the
                      extent  invested  in  the AFG Retirement  Fund  or  AFG
                      Common  Stock Fund  (except a participant from the  APU
                      ESORP may elect a distribution from those accounts  for
                      amounts  prior to January 1, 1997 in a single lump  sum
                      in cash); or

               -     by   a   direct  rollover  to  an   individual
                     retirement account or annuity (an "IRA")  or to  another
                     qualified plan that accepts rollovers.

       In  addition, if you were a participant in the Staff RASP,  the  Group
RASP (excluding the participants from Republic) or the Leader Plan (prior  to
July  1,  1988)  you  may  elect  to receive distribution  of  your  accounts
transferred from such plans as follows:

               -       If  you are married on the date your benefits  are  to
               commence, you may elect distribution of  your benefits in  the
               form of a qualified joint and survivor annuity and if you  are
               not  married,  you may elect distribution in  the  form  of  a
               single life annuity option.

               A  qualified  joint and survivor annuity provides payments  to
               you  for life and, after your death, provides payments to your
               surviving  spouse for life.  For this purpose, your spouse  is
               entitled  to  benefits only if  he or she is your spouse  when
               benefits  began; if you remarry subsequent to  the  time  when
               benefits begin, your new spouse is not covered.  The amount of
               each  annuity payment to your surviving spouse is 50%  of  the
               amount  of each annuity payment during the joint lives of  you
               and your spouse.

               If  you elect a qualified joint and survivor annuity but  then
               change  your  mind,  you  may waive the  qualified  joint  and
               survivor annuity during a 90-day election period ending on the
               date your benefit payments
               
                                   - 33 -
commence.  During the election period, you may revoke a
               waiver.  A waiver will not be effective unless your spouse
               gives notarized consent in accordance with the plan
               requirements, or you establish that you are not married.  If
               you are married and wish to take a single life annuity
               contract, you will be required to follow this waiver
               procedure.

               If  you  die  before the distribution of your  benefits,  your
               spouse may receive a qualified preretirement survivor annuity.
               This  type  of annuity provides payments for the remainder  of
               your spouse's life.

               -        If  you  were  such  a  participant,  you  may  elect
               distribution  in the form of a single life annuity  option,  a
               joint  and  survivor  annuity  option  or  installment  method
               (either 60, 120 or 240 months); provided, however, no benefits
               will  be  payable  over a period exceeding the  life  of  your
               beneficiary.

       If  you  are a participant for whom a retirement rollover account  was
established, you may elect to have all or a part of your accounts transferred
from  the Group RASP and the Staff RASP (in multiples of 10%) and transferred
to  and  paid from the American Premier Underwriters, Inc. Retirement  Income
Guarantee Plan in accordance with the terms of that plan (if the plan accepts
such a transfer).

       Finally,  if  you  were  a  participant in  the  Leader  Plan  or  the
Transport Plan, you  also may elect to receive distribution of your  accounts
under  that plan as of December 31, 1996, in the form of substantially  equal
annual,  quarterly or monthly installments over a period not to  exceed  your
(or  your beneficiary's) life expectancy.  If you were a participant  in  the
Transport Plan, the period also may be over a period not to exceed the  joint
life expectancy of you and your spouse.

       D.     Valuation of Accounts for Distribution

       For  purposes of any distribution from the AFG RASP, your accounts are
valued  as of the most recent Valuation Date (each business day of  the  Plan
Year) coinciding with or preceding the payment.
                                   - 34 -
E.     Procedure for Designating a Beneficiary

       Your  surviving spouse will automatically be your beneficiary   unless
your spouse consents in writing to the designation of another beneficiary  or
beneficiaries.  Such written approval must be witnessed by a notary public.

       If  you  are  not married or if you are married and you have  received
spousal  consent,  you  may  designate,  on  a  form  provided  by  the  Plan
Administrator, the beneficiary or beneficiaries to receive your  interest  in
the  AFG  RASP  in the event of your death.  The beneficiary or beneficiaries
may  be  changed by you during your lifetime.  If you are unmarried  and  you
fail  to  designate  a  beneficiary, or if all your designated  beneficiaries
predecease or die simultaneously with you, distribution will be made to  your
estate.   You can obtain designation of beneficiary forms by calling AFG  In-
Touch.

X.     FORFEITURES AND REINSTATEMENT

       If  your  employment terminates and you are not (and  do  not  become)
fully vested in the value of your accounts, you will be entitled to receive a
distribution  of  the  vested  portion  of  your  accounts  (subject  to  the
provisions  described in the Section above in Distributions After  Employment
Ends)  and the remainder will be treated as a forfeiture.  If  you forfeit  a
portion  of   your accounts and are later reemployed by an Employer,  or  any
nonparticipating subsidiary  of the Company, prior to incurring five  consecu
tive one-year periods of severance, the portion forfeited will be restored if
you repay to the AFG RASP the full amount of the distribution.

XI.    SPECIAL RULES FOR SECTION 16 PARTICIPANTS

       If  you  are  a  participant who is subject  to  the  requirements  of
Section  16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"),  as  a  result  of  your relationship with the  Company  ("Section  16
participants") you are restricted as described below:

                                   - 35 -
Rules  promulgated  under  Section 16 establish  exemptions  from  the
short-swing  profit recovery provision described above. Under  one  of  these
exemptions,  Section 16 participants may generally acquire or dispose  of  an
issuer's  equity securities under company-sponsored "tax-conditioned  plans."
The  AFG  RASP qualifies as a tax-conditioned plan. Accordingly,  Section  16
participants may generally acquire or dispose of Company Common  Stock  under
the AFG RASP to the same extent as participants who are not under Section 16.
However,  Section 16 participants are restricted in their ability to  conduct
what  are  known as "discretionary transactions." Discretionary  transactions
are  transactions by Section 16  participants under an employee benefit  plan
involving  voluntary fund switches or voluntary cash withdrawals relating  to
an  issuer  equity  securities fund. For a discretionary  transaction  to  be
exempt from Section 16 liability, it must be effected by an election made  at
least  six-months  following the date of the Section 16  participant's  most-
recent  "opposite-way"  election under any plan of  the  Company.  "Same-way"
elections, however, are not subject to this six-month condition, nor are non-
plan elections taken into consideration.

       With  respect to the Plan, Section 16(b) of the Exchange Act generally
provides  that if a Section 16 participant makes any purchase  and  sale,  or
sale and purchase, of shares for his or her  AFG Common Stock Fund and/or his
or  her  AFG Retirement Fund within a six month period, all profit  resulting
from  the  transactions  must be turned over to the  Company.   Although  the
acquisition  of  shares  from  the  AFG Common  Stock  Fund  and/or  the  AFG
Retirement Fund pursuant to the AFG RASP and the distribution of any of those
shares  to  a  Section  16  participant are exempt from  Section  16(b),  the
subsequent sale of the shares will constitute a "sale" for purposes  of  that
Section.

XII.   COSTS OF THE PLAN

       The  costs  associated  with operating the   AFG  RASP  are  allocated
proportionately to and paid out of each of the investment funds,  unless  the
Company elects to pay these expenses.

                                   - 36 -
XIII.  TAX EFFECTS

       A.     Contributions

       For  purposes  of  calculating federal income taxes, you  may  exclude
from  your taxable income the 401(k) savings made by you in the year in which
such  contributions are made.  Employer contributions and earnings  allocated
to  your accounts will have no effect on your federal tax liability until you
receive a distribution from the AFG RASP.

       All  your  401(k)  savings,  retirement  contributions,  and  matching
contributions   to  the  Plan  are deductible  by  the  Employer  up  to  the
limitations of the Federal tax laws.  As previously mentioned, the  AFG  RASP
is  designed to qualify as a contributory profit sharing plan under  Sections
401(a) and 401(k) of the Code.

       B.     Distributions

       Upon distribution from the Plan, if  you have participated in the  AFG
RASP  for five years or more and attained age 59 1/2, you may elect to have  the
distribution of the entire amount in the AFG RASP  taxed under a special five-
year  averaging method.  If you meet the five-year participation  requirement
and  attained  age  50  before January 1, 1986, you may  elect  to  have  the
distribution of the entire amount in the Plan taxed under a special five-year
averaging method or under a special ten-year averaging method (using 1986 tax
rates).  These averaging methods afford special tax treatment and reduce your
income  taxes by treating all or part of the distribution as if it  had  been
received over a five-year or ten-year period.  These averaging methods may be
used  only  once.  These rules will not be effective for tax years  beginning
after  December  31, 1999.  However, the prior transition rules  for  certain
individuals  are  still in effect if you attained age 50  before  January  1,
1986.

       You  may  transfer all or part of the distribution from the  AFG  RASP
to  another qualified plan or to an individual retirement account or  annuity
("IRA")  within  60  calendar days after you receive the  distribution.   The
transferred portion of the
       
                                   - 37 -
distribution is then not taxable until it is distributed from the IRA or
qualified plan.  However, if you roll a distribution over into an IRA, as
opposed to another qualified plan, you will not be eligible to qualify for
the special five-year (or ten-year, if applicable) averaging method when
withdrawing your benefits from the IRA at a later date.

       If  you  do  not  elect  the special five-year or  ten-year  averaging
method  and do not rollover all of the distribution of your entire amount  in
the  AFG  RASP,  the  amount distributed to you will be subject  to  ordinary
income  tax.   In addition, the distribution may be subject to an  additional
10%  tax, if it was not made as a result of (i) death, (ii) disability, (iii)
separation  of service after age 55 or (iv) an in-service distribution  after
age 59 1/2.

       C.     Individual Retirement Account Deductions

       As  a  result  of the Tax Reform Act of 1986, if you are an  "eligible
participant"  in  the  AFG  RASP, you cannot make a  full  $2,000  deductible
contribution to an IRA unless your adjusted gross income is $25,000  or  less
if  you  are  single, or $40,000 or less if you are married.   Allowable  IRA
contributions  are  phased out for a single participant with  adjusted  gross
income  between  $25,000  and  $35,000 and for  a  married  participant  with
adjusted gross income between $40,000 and $50,000.  To the extent you  cannot
make  a  deductible  IRA  contribution, you  may  make  a  nondeductible  IRA
contribution, the earnings on which will be tax-deferred.

XIV.   PROCEDURE FOR MAKING A CLAIM FOR BENEFITS

       In  order  to present a complaint regarding the nonpayment of  a  RASP
benefit or a portion thereof, you or your beneficiary must file such claim by
mailing  or  delivering a written statement to the Plan Administrator.   Upon
receipt of the claim, you will receive a written acknowledgment.

       If  a claim for benefits is denied, either in whole or in part, you or
your  beneficiary must be furnished a written notice of the  denial  together
with an explanation of the specific reason
       
                                   - 38 -
or reasons why the claim was denied and the steps which can be taken to
perfect the claim.  This notice must be given within a reasonable time not to
exceed 90 days, unless special circumstances require an extension.

       You  or  your  beneficiary, may request a review of the  denied  claim
within 60 days of receipt of the written notice that the claim was denied  by
making  written application for review to the Plan Administrator.  If you  do
not  receive a written denial within 60 days, you may consider this a  denial
and  proceed with this process.  You may also review the pertinent  documents
and  submit comments in writing as well as be represented by counsel  at  the
participant's expense.

       A  decision must, in turn, be made by the Plan Administrator within 60
days  after  receipt of the request for review, unless special  circumstances
exist, but in no event later than 120 days after receipt of the request.  The
decision  must be set forth in writing and include reasons and references  to
those Plan provisions on which it is based.

XV.    NOTICES AND CORRESPONDENCE

       You  should direct all requests for forms and information to  AFG  In-
Touch  at  1-800-458-2387.  All notices and other correspondence to the  Plan
Administrator  should  be  sent to the attention of the  Administrative  Plan
Committee,   American  Financial  Group,  Inc.,  One  East   Fourth   Street,
Cincinnati, Ohio 45202; telephone (513) 579-2121.

XVI.   AMENDMENT AND TERMINATION OF PLAN

       Although  the  AFG  RASP  has no termination  date  and  may  continue
indefinitely, the AFG RASP may be amended, modified or terminated at any time
by a written amendment of the Board of Directors of the Company and signed by
an officer of the Company.  Any amendment, modification or termination may be
done without the consent of any other Employer.  Further, with the consent of
the  Company,  any Employer may withdraw from the AFG RASP.  No amendment  to
the  AFG  RASP,  however,  may operate directly or  indirectly  to  give  any
Employer any interest in the assets of the
       
                                   - 39 -
AFG RASP, to permit those assets to be used for purposes other than the
exclusive benefit of you and the other participants or to deprive you or any
other participant of your  vested interest in the AFG RASP at that time.

       If  the AFG RASP is terminated, all of your accounts will become fully
vested. The Company may direct either (i) that benefits be distributed in one
lump  sum  payment  after the Internal Revenue Service  determines  that  the
termination  does not adversely affect the AFG RASP's qualification  or  (ii)
that  the trust continue and benefits be distributed at the same time and  in
the  same  manner  as  if the AFG RASP had not terminated  (but  without  any
additional contributions).

       If  an Employer is dissolved, liquidated or adjudged bankrupt, the AFG
RASP  will  automatically terminate with respect to that Employer.   The  AFG
RASP will also terminate upon the merger, consolidation or reorganization  of
an  Employer  or  the  sale of substantially all of its  assets,  unless  the
successor  or  purchasing  entity,  whichever  is  the  case,  agrees  to  be
substituted  for the Employer and to assume all of the Employer's obligations
under the AFG RASP.

XVII.  TOP HEAVY RULES

       Federal  tax  laws require that, in the event the Plan  should  become
"top heavy" (which occurs if the sum of the account balances of key employees
for  any  Plan  Year exceeds 60% of all account balances), 100% vesting  must
occur after three years of service and a minimum contribution must be made to
the  AFG  RASP  equal  to  the lesser of 3% of compensation  or  the  highest
percentage contributed for key employees.  The rules are very complex.  It is
unlikely  the  Plan will become top heavy, but if it does, AFG will  let  you
know.

XVIII.  ESOP PROVISIONS
       
       The  terms  of the AFG RASP permit the RASP to borrow funds on  behalf
of  the  AFG  RASP  (referred to as an ESOP if borrowing  is  done)  for  the
exclusive benefit of you and other participants.  In the event the  AFG  RASP
makes any such loans (called "ESOP
       
                                   - 40 -
Loans"),  certain  provisions  of the RASP will  become  effective  for  your
benefit. These special rules include a requirement that the assets of the AFG
RASP  be  invested primarily in Employer equity securities (that is, the  AFG
Retirement  Fund  described  above  in  the  Section  called  Investment   of
Contribution) and other requirements regarding distributions and investments.
More information about this is available in the Plan Document.

XIX.   RIGHTS UNDER ERISA

       The  terms of the AFG RASP are designed to comply with ERISA.  The AFG
RASP  is  subject  to  many of the provisions of Title I  and  II  of  ERISA,
including  those  dealing with reporting, disclosure, participation,  vesting
and  fiduciary  responsibilities.   As a "defined  contribution"  "individual
account"  plan, the AFG RASP is not subject to the minimum funding provisions
of Title I and Title II of ERISA or the plan termination insurance provisions
of  Title  IV of ERISA.  Therefore, the benefits under the AFG RASP  are  not
insured by the Pension Benefit Guaranty Corporation.

       Neither  the Company, its officers, employees or members of the  Board
of  Directors, nor the Trustee or any other Plan fiduciary, may guarantee  in
any  manner  the  payment  of benefits under the  AFG  RASP,  or  warrant  or
represent  that  the market value of any securities held  in  the  investment
funds under the AFG RASP will increase or will not decrease.

       You  and  the other participants in the Plan are entitled  to  certain
rights and protections under ERISA.  ERISA provides that all participants are
entitled to:

       (a)    Examine,  without  charge, at the Plan  Administrator's  office
               and   at   other  specified  locations,  all  Plan  Documents,
               including copies of all documents filed by the Plan  with  the
               U. S. Department of Labor, such as detailed annual reports and
               Plan descriptions.
       
       (b)    Obtain  copies of all Plan Documents and other Plan information
               on  written  request  to  the  Plan  Administrator.  The  Plan
               Administrator may make a reasonable charge for copies.

                                   - 41 -
(c)    Receive  a summary of the Plan's annual financial report.   The
               Plan   Administrator  is  required  by  law  to  furnish  each
               participant with a copy of this summary annual report.

       (d)    Obtain  a statement once a year setting forth the value of  the
               participant's  accounts  under  the  Plan  and   whether   the
               participant  is  vested in any portion  of  Employer  matching
               contributions.

       In  addition  to creating rights for Plan participants, ERISA  imposes
duties  on  those people who are responsible for the operation of  the  Plan.
Those  who  operate the Plan, called "fiduciaries," have  a  duty  to  do  so
prudently and in the interest of Plan participants and beneficiaries.

       No  one  may  prevent  a  participant  from  obtaining  a  benefit  or
exercising a right under ERISA by firing or otherwise discriminating  against
a participant in any manner.

       If  a  claim  for a benefit is denied, in whole or in part,  you  must
receive a written explanation of the reason for the denial.  In addition, you
have the right to have the Plan Administrator review and reconsider a claim.

       Under  ERISA,  there are steps a participant may take to  enforce  the
above  rights.  For instance, if you request materials from the Plan  and  do
not  receive them within 30 days, you may file suit in a federal  court.   In
such  a  case,  the court may require the Plan Administrator to  provide  the
materials  and  pay  you  up to $100 a day until you receive  the  materials,
unless  the materials were not sent because of reasons beyond the control  of
the Plan Administrator.  A participant who has a claim for benefits denied or
ignored, in whole or in part, may file suit in a state or federal court.  You
may seek assistance from the U. S. Department of Labor or may file suit in  a
federal  court if  you are discriminated against or if it should happen  that
Plan fiduciaries misuse the Plan's money.

                                   - 42 -
The  court  will decide who should pay court costs and legal  fees  in
such  a  proceeding.  If you are successful, the court may order  the  person
sued  to pay these costs and fees.  If you lose, the court may order  you  to
pay these costs and fees, for example, if it finds the claim to be frivolous.

       A  participant  who  has questions about the Plan should  contact  the
Plan Administrator.  A participant who has questions about this statement  or
about rights under ERISA should contact the nearest area office of the U.  S.
Department of Labor-Management Services Administration, Department of Labor.

XX.    RESTRICTIONS ON RESALE OF AFG STOCK

       If  you are a participant who is an "affiliate" of the Company, shares
of  the Company's Common Stock or any other securities of AFG or a subsidiary
of  AFG  received  from  the RASP may not be resold unless  you  comply  with
Commission Rule 144 or otherwise comply with the Securities Act of 1933.   An
affiliate  is  generally described as a person who, directly  or  indirectly,
possesses  the  power to direct the policies and management of  the  Company,
whether  through the ownership of stock, by contract or otherwise.  Directors
and Executive Officers of AFG and principal AFG shareholders are affiliates.

XXI.   INCORPORATION OF DOCUMENTS BY REFERENCE

       The following documents filed with the Commission are incorporated  by
reference herein:

       (a)    The  Company's  Annual Reports for the year ended December  31,
               1995 filed on Form 10-K, as amended;

       (b)    All  other  reports  filed by the Company pursuant  to  Section
               13(a) or 15(d) of the Exchange Act since January 1, 1996; and

       (c)    The  descriptions of the securities offered hereby contained in
               the  following documents, as they may have been  amended  from
               time to time, filed by the Company:

                                   - 43 -
(i)    Common  Stock  -- Registration Statement  on  Form  8-B
                      filed on April 17, 1995 under the Exchange Act.

       In  addition, all documents subsequently filed by the Company and  the
AFG RASP pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior  to  the filing of a post-effective amendment which indicates that  all
securities  offered have been sold or which deregisters all  securities  then
remaining unsold, shall be deemed to be incorporated by reference herein  and
to be a part hereof from the date of filing of such documents.

       The  Company  will provide you without charge, a copy of any  document
(not  including exhibits) incorporated by reference as well as a copy of  any
other  document  required to be delivered pursuant  to  Rule  428(b)  of  the
Securities  Act  of 1933, as amended (including the Company's Annual  Report,
proxy statements and all other reports and communications distributed to  the
Company's  security holders generally) or any Form 11-K filed by any  of  the
Consolidated  Plans.   A  request, which may be oral  or  written,  for  such
documents  should  be addressed to the Company at the address  and  telephone
number given on the cover of this document.

                                   - 44 -
TABLE OF CONTENTS
                                                              Page

I.        GENERAL INFORMATION                                  1

II.       ADMINISTRATION                                       1

III.      ELIGIBILITY REQUIREMENTS                             3

IV.       ENROLLMENT AND PARTICIPATION IN THE PLAN             4

V.        CONTRIBUTIONS AND ACCOUNTS                           5

VI.       INVESTMENT OF CONTRIBUTIONS                          8

VIII.     DISTRIBUTIONS WHILE STILL EMPLOYED                  15

IX.       DISTRIBUTIONS AFTER EMPLOYMENT ENDS                 19

X.        FORFEITURES AND REINSTATEMENT                       22

XI.       SPECIAL RULES FOR SECTION 16 PARTICIPANTS           22

XII.      COSTS OF THE PLAN                                   23

XIII.     TAX EFFECTS                                         23

XIV.      PROCEDURE FOR MAKING A CLAIM FOR BENEFITS           24

XV.       NOTICES AND CORRESPONDENCE                          25

XVI.      AMENDMENT AND TERMINATION OF PLAN                   25

XVII.     TOP HEAVY  RULES                                    25

XVIII.    ESOP PROVISIONS                                     26

XIX.      RIGHTS UNDER ERISA                                  26

XX.       RESTRICTIONS ON RESALE OF AFG STOCK                 27

XXI.      INCORPORATION OF DOCUMENTS BY REFERENCE             28

                                   - 45 -
                                      

EXHIBIT 5

                              October 28, 1996

Direct Dial:  (513) 579-2540

American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio  45202

Dear Sir or Madam:

       I  have  acted as counsel to American Financial Group, Inc.,  an  Ohio
corporation  (the  "Company")  in  connection  with  the  preparation  of   a
Registration  Statement on Form S-8 filed by the Company with the  Securities
and  Exchange Commission.  The Registration Statement relates to the issuance
and  sale  of up to 500,000 shares of Common Stock, $1.00 par value,  of  the
Company pursuant to the American Financial Group Retirement and Savings  Plan
(the "Plan").

       In  connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
such  documents as I have deemed necessary or appropriate as a basis for  the
opinions  set forth below including (i) the Registration Statement, (ii)  the
Restated and Amended Articles of Incorporation and Code of Regulations of the
Company,  each  as amended to the date hereof, and (iii) resolutions  of  the
Board  of  Directors  of the Company relating to the approval  of  the  Plan,
issuance of shares of Common Stock pursuant to the Plan and the filing of the
Registration Statement.

       Based  upon  and subject to the foregoing, I am of the  opinion  that,
when (i) the Registration Statement has become effective under the Securities
Act  of 1933 and (ii) the shares of Common Stock, when issued as contemplated
by  the  Plan,  will  constitute duly issued, fully paid  and  non-assessable
shares of Common Stock of the Company.

        I  hereby consent to the filing of this opinion as Exhibit 5  to  the
Registration Statement.

                                       Very truly yours,

                                       Karl J. Grafe
                                       ----------------------------
                                       Karl J. Grafe
                                        Assistant General Counsel and
                                         Assistant Secretary

                                   - 46 -

EXHIBIT 23.2

                       CONSENT OF INDEPENDENT AUDITORS

We  consent  to the incorporation by reference in the Registration  Statement
(Form  S-8) and related Prospectus pertaining to the American Financial Group
Savings  and  Retirement Plan for the registration of 500,000 shares  of  its
common  stock  of  our  report dated March 15,  1996,  with  respect  to  the
consolidated financial statements and schedules of American Financial  Group,
Inc.  included  in its Annual Report (Form 10-K) for the year ended  December
31, 1995, filed with the Securities and Exchange Commission.

                                                    ERNST & YOUNG LLP

Cincinnati, Ohio
October 28, 1996

                                   - 47 -

EXHIBIT 23.3

                       CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement on
Form  S-8 of American Financial Group, Inc., for the registration of  500,000
shares  of its common stock of (a) the report of Deloitte & Touche LLP  dated
February 15, 1995 (March 23, 1995 with respect to the acquisition of American
Financial  Corporation  as discussed in Note 2 to the  financial  statements)
relating  to  the  consolidated  financial  statements  of  American  Premier
Underwriters, Inc. and (b) the report of Deloitte & Touche dated February 18,
1994  relating  to  the consolidated financial statements  of  General  Cable
Corporation,  both  appearing  in the American Financial  Corporation  Annual
Report on Form 10-K for the year ended December 31, 1994.

                                                    DELOITTE & TOUCHE LLP

Cincinnati, Ohio
October 28, 1996

                                   - 48 -