
<PAGE> 1

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                    FORM 10-K
                       ANNUAL REPORT PURSUANT TO SECTION 13
                      OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 1994
                          Commission file number 1-5704

                         Aetna Life and Casualty Company
                         _______________________________
          (Exact name of registrant as specified in its charter)

          Connecticut                              06-0843808        
_______________________________                 _____________________
(State or other jurisdiction of                  (I.R.S. Employer
 incorporation)                                   Identification No.)

     151 Farmington Avenue,
     Hartford, Connecticut                         06156             
_______________________________                 _____________________
     (Address of principal                       (ZIP Code)
       executive offices)

Registrant's telephone number, including area code:  (203) 273-0123
Securities registered pursuant to Section 12(b) of the Act:

                                            Name of each exchange on
       Title of each class                     which registered      
       ___________________                  _________________________

Common Capital Stock without par value      New York Stock Exchange
                                            Pacific Stock Exchange
                                            Various Swiss Exchanges

9 1/2% Cumulative Monthly Income            New York Stock Exchange
  Preferred Securities, Series A
  (issued by a subsidiary)

Securities registered pursuant to Section 12(g) of the Act:  None
                                                                     
_____________________________________________________________________

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

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

The aggregate market value of the voting stock held by 
non-affiliates of the registrant as of February 28, 1995 was 
$6,056,533,552.

As of February 28, 1995, 112,698,701 shares of the registrant's 
Common Capital Stock without par value were outstanding.

                    DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's 1994 annual report to shareholders 
(the "Annual Report").  (Parts I, II and IV)

Portions of the registrant's proxy statement filed on or about 
March 17, 1995 (the "Proxy Statement").  (Parts III and IV)


<PAGE> 2


                        TABLE OF CONTENTS

                                                                          Page
                                                                          ____

PART I

Item  1.   Business.
           A.  Organization of Business                                      3
           B.  Financial Information about Industry Segments                 4
           C.  Description of Business Segments
               1.  Aetna Health Plans                                        4
               2.  Large Case Pensions                                       7
               3.  Aetna Life Insurance & Annuity                            9
               4.  Property-Casualty                                        12
               5.  Reserves Related to Property-Casualty Operations         17
               6.  International                                            21
               7.  Corporate                                                22
               8.  General Account Investments                              22
                   a.  Investments Related to Life, Health, Annuity and
                       Pension Operations                                   22
                   b.  Investments Related to Property-Casualty
                       Operations                                           25
               9.  Other Matters
                   a.  Regulation                                           27
                   b.  NAIC IRIS Ratios                                     29
                   c.  Ratios of Earnings to Fixed Charges and Earnings
                       to Combined Fixed Charges and Preferred Stock
                       Dividends                                            30
                   d.  Miscellaneous                                        31
Item  2.   Properties.                                                      31
Item  3.   Legal Proceedings.                                               32
Item  4.   Submission of Matters to a Vote of Security Holders.             33
Executive Officers of Aetna Life and Casualty Company                       34

PART II

Item  5.   Market for Registrant's Common Equity and Related
           Stockholder Matters.                                             37
Item  6.   Selected Financial Data.                                         37
Item  7.   Management's Discussion and Analysis of Financial
           Condition and Results of Operations.                             37
Item  8.   Financial Statements and Supplementary Data.                     37
Item  9.   Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure.                             37

PART III

Item 10.   Directors and Executive Officers of the Registrant.              38
Item 11.   Executive Compensation.                                          38
Item 12.   Security Ownership of Certain Beneficial Owners and Management.  38
Item 13.   Certain Relationships and Related Transactions.                  38

PART IV

Item 14.   Exhibits, Financial Statement Schedules and Reports
           on Form 8-K.                                                     38
Index to Financial Statement Schedules                                      42
Signatures                                                                  57


<PAGE> 3

                              PART I

Item 1.  Business.

A.  Organization of Business

Aetna Life and Casualty Company was organized in 1967 as a 
Connecticut insurance corporation.  Aetna Life and Casualty 
Company and its subsidiaries (collectively, "Aetna" or the 
"company") constitute one of the nation's largest 
insurance/financial services organizations in the United States 
based on its assets at December 31, 1993.  Based on 1993 premium 
rankings, the company also is one of the nation's largest stock 
insurers of property-casualty lines and one of the largest writers 
of health care products, and group life, annuity and pension 
products.  Although the company offers insurance and financial 
services products in foreign countries, 90% of its total revenue 
in 1994 was derived from domestic sources.

The company's reportable segments have been changed to better 
reflect the way the businesses are managed and prior years' 
results have been restated to conform to the new segments.  The 
new reportable segments are Aetna Health Plans, Large Case 
Pensions, Aetna Life Insurance & Annuity, Property-Casualty, 
International and Corporate.  The principal products included in 
such segments (other than Corporate) are:


Aetna Health Plans:
     Health care
     Group insurance
     Specialty health

Large Case Pensions:
     Group retirement and other savings products


Aetna Life Insurance & Annuity:
     Individual life
     Retirement and other savings and investment products
       (including individual and group annuities)
     Financial and administrative services
     Mutual funds


Property-Casualty:
     Automobile
     Fidelity and surety
     Fire and allied lines
     General liability
     Homeowners
     Marine
     Multiple peril
     Workers' compensation


International:
     Life insurance and financial services


<PAGE> 4

B.  Financial Information about Industry Segments

Revenue, income (loss) from continuing operations before income taxes, 
extraordinary item and cumulative effect adjustments, net income 
(loss), and assets by industry segment are set forth in Note 15 to the 
Financial Statements, which is incorporated herein by reference to the 
Annual Report.  Revenue and income (loss) from continuing operations 
before extraordinary item and cumulative effect adjustments 
attributable to each industry segment are incorporated herein by 
reference to the Selected Financial Data in the Annual Report.

Certain reclassifications have been made to 1993 and 1992 financial 
information to conform to 1994 presentation.

C.  Description of Business Segments

1.  Aetna Health Plans

Principal Products
__________________

Group health products and services are offered through two business 
units, health care and specialty health, of the Aetna Health Plans 
segment ("AHP").  These products and services are marketed primarily 
to employers for the benefit of employees and their dependents.  The 
health care business unit provides managed care and traditional 
indemnity health care plans.  The specialty health business unit 
provides behavioral health, pharmacy, dental and occupational managed 
care plans.  Plans may be insured, whereby Aetna assumes all or a 
portion of health care cost and utilization risk, or self-funded, 
whereby employers assume all or a significant portion of such risks.  
AHP also provides administrative and claim services and, in many 
cases, partial insurance protection, for an appropriate fee or premium 
charge.

Group insurance consists of group life, disability and long-term care 
insurance plans and is marketed in the same manner as group health 
products and services.  Group life insurance consists principally of 
renewable term coverage, the amounts of which frequently are linked to 
individual employee wage levels.  The company also offers group 
universal life and whole life products.  Group disability insurance 
includes coverage for disabled employees' income replacement benefits.

Continuing concern over the rising costs of health care and the need 
for quality assurance have resulted in a continuation of a market 
shift away from traditional forms of health benefit coverage to a 
variety of "managed care" products.  Managed care products, which may 
be sold on a stand-alone basis or in combination with traditional 
indemnity products, vary from traditional indemnity products primarily 
through the use of health care networks (physicians and hospitals) and 
the implementation of medical management procedures designed to 
enhance the quality and reduce the cost of medical services provided.  
Such procedures, including negotiated contracts with health care 
providers, development and implementation of guidelines for 
appropriate utilization of health care resources and working with 
health care providers to review treatment patterns in order to improve 
consistency and quality, are designed to enable managed care companies 
and their customers to control medical costs more effectively.  
Beginning in 1993, the company, in an effort to further contain health 
care costs and to improve quality and access, initiated a program to 
acquire or develop ownership or management interests in primary care 
physician practices.  AHP expects to invest substantial amounts in 
acquisition or development of physician practices and in other 
programs which the company believes will improve its ability to 
control health care costs and enhance quality.

<PAGE> 5

The company offers a broad spectrum of traditional indemnity and 
managed care products.  The latter include preferred provider 
("PPO") arrangements, which offer enhanced coverage benefits for 
services received from participating providers; point-of-service 
("POS") plans, which typically combine strong HMO-style medical 
management with an option to seek health care outside of the 
provider network; and health maintenance organizations ("HMOs"), 
which arrange for non-emergency services exclusively through the 
HMO's network of providers.  The company's health care network 
physicians and hospitals have traditionally been independent 
contractors.  As previously indicated, in 1993, the company began 
to develop and manage primary care physician practices as a means 
of increasing network access and overall product integration.  As 
of year-end 1994, the company owned and managed 21 physician 
practices in six cities.

At year-end 1994, Aetna operated various types of managed care 
networks in approximately 229 Standard Metropolitan Statistical 
Areas with enrollment of approximately 7 million.  The number of 
members covered under all arrangements, including traditional 
health plans, was approximately 16 million at December 31, 1994.  
AHP units continue to develop a wide range of products and 
services tailored to help employers manage their employee benefit 
plan costs effectively.

The company ceased selling individual health insurance products in 
mid-1990 and transferred this business to another company in 1991.

For additional information regarding products offered by AHP, see 
Management's Discussion and Analysis of Financial Condition and 
Results of Operations ("MD&A") - Aetna Health Plans in the Annual 
Report.

The following table summarizes group health and group life and 
disability premiums for the years indicated:

<TABLE>

<CAPTION>

(Millions)                     1994        1993        1992        1991        1990
                               ____        ____        ____        ____        ____

<S>                            <C>         <C>         <C>         <C>         <C>

Group health (1)...........    $4,456.0    $3,553.3    $3,387.6    $3,257.5    $2,905.9
Group life and
 disability (2)............     1,155.5     1,147.3     1,199.1     1,209.8     1,284.2
                               ________    ________    ________    ________    ________
    Total..................    $5,611.5    $4,700.6    $4,586.7    $4,467.3    $4,190.1
                               ________    ________    ________    ________    ________
                               ________    ________    ________    ________    ________

<FN>

(1) Includes managed health care.

(2) Decrease in 1993 premiums reflects increased refunds on retrospectively rated
    policies due to favorable experience.

</TABLE>


<PAGE> 6

Competition
___________

The markets for AHP products are highly competitive.  In addition 
to competition among insurance companies, competition in the 
health field arises from organizations such as Blue Cross and Blue 
Shield, from various specialty service providers, from local and 
regional HMOs and other types of medical and dental provider 
organizations, from integrated health care delivery organizations 
and, in certain coverages, from the federal and state governments.  
Additionally, in recent years, some large employers have moved to 
totally self-funded and self-administered benefit plans.  
Competition largely is based upon product features and prices and, 
in the case of managed health care plans, upon the quality of 
services provided, the geographic scope of the provider networks 
and the medical specialties available in such networks.  Based on 
1993 written premiums, Aetna is one of the largest insurance 
company providers of group health and life benefits in the United 
States.

Method of Distribution
______________________

Products are sold principally through salaried field 
representatives and home office marketing personnel who often work 
with independent consultants and brokers who assist in the 
production and servicing of business.

Reserves
________

For group life products, policy reserve liabilities are 
established as premiums are received to reflect the present value 
of expected future obligations net of the present value of 
expected future premiums.  Policy reserves for group paid-up life 
insurance generally reflect long-term fixed obligations and are 
computed on the basis of assumed or guaranteed yield and benefit 
payments.  Assumptions are based on Aetna's experience, which is 
periodically reviewed against published industry data.  For long 
term disability products, reserves are established for (i) lives 
currently in payment status (using standard industry morbidity and 
interest rate assumptions), (ii) lives who have not satisfied the 
waiting period (using a percentage of premiums based on Aetna's 
experience) and (iii) claims that have been incurred but not 
reported.  For group health products, reserves reflect estimates 
of the ultimate cost of claims including (i) claims that have been 
reported but not settled, and (ii) claims that have been incurred 
but have not yet been reported.  Health care and group life claim 
reserves are based on factors derived from past experience.  
Reserves for most of these products reflect retrospective 
experience rating, except for smaller group insurance cases and 
HMOs, which generally are not retrospectively experience rated.

Reinsurance
___________

Aetna utilizes a variety of reinsurance agreements with non-
affiliated insurers to share insurance risks on health care and 
group life business as directed by the insured and to control its 
exposure to large losses.  Generally, these agreements are 
established on a case-by-case basis to reflect the circumstances 
of specific group insurance risks.

For additional information on reinsurance, see Note 16 of Notes to 
Financial Statements in the Annual Report.


<PAGE> 7

Group Life Insurance In Force and Other Statistical Data
________________________________________________________

The following table summarizes changes in group life insurance in 
force before deductions for reinsurance ceded to other companies 
for the years indicated:

<TABLE>
<CAPTION>

(Amounts in millions except number of policies and contracts in force)

                                1994         1993         1992         1991         1990
                                ____         ____         ____         ____         ____

<S>                             <C>          <C>          <C>          <C>          <C>
Sales and additions.........    $ 13,496     $ 22,781     $ 30,131     $ 37,876     $ 51,900
                                ________     ________     ________     ________     ________
                                ________     ________     ________     ________     ________

Terminations:  (1)
  Lapses ...................    $ 18,850     $ 22,991     $ 26,087     $ 17,522     $ 15,707
  All other terminations....       6,096        6,864        2,235        3,036       23,476
                                ________     ________     ________     ________     ________
    Total...................    $ 24,946     $ 29,855     $ 28,322     $ 20,558     $ 39,183
                                ________     ________     ________     ________     ________
                                ________     ________     ________     ________     ________

In force, end of year.......    $288,546     $299,996     $307,070     $305,261     $287,943
                                ________     ________     ________     ________     ________
                                ________     ________     ________     ________     ________

Number of policies and
 contracts in force, end of
  year:  (2)
  Group life contracts......      23,268       24,440       24,496       25,737       26,061
  Group conversion
   policies (3).............      37,513       38,431       39,567       40,370       41,207

<FN>

(1) The increases in 1993 and 1992 terminations resulted primarily from the non-renewal
    and termination of certain large contracts in each year.

(2) Due to the diversity of coverages and size of covered groups, statistics are not
    provided for average size of policies in force.

(3) Reflects conversion privileges exercised by insureds under group life policies to
    replace those policies with individual life policies.

</TABLE>


2.  Large Case Pensions

Principal Products
__________________

Business units in the Large Case Pensions segment manage a variety 
of retirement and other savings products (including pension and 
annuity products), and offer investment management advisory 
services to non-pension customers.  Some of these products provide 
a variety of investment guarantees, funding and benefit payment 
distribution options and other services.  (For additional 
information regarding the products offered by Large Case Pensions, 
see MD&A - Large Case Pensions in the Annual Report.)

The majority of Large Case Pensions' products that utilize 
Separate Accounts provide contractholders with a vehicle for 
investments under which the contractholders assume the investment 
risks as well as the benefit of favorable performance.  Large Case 
Pensions earns a management fee on these Separate Accounts or on 
the mutual funds in which certain of the Separate Accounts invest.  
Various investment advisory services also are offered through a 
number of wholly owned subsidiaries that are registered investment 
advisors.

In January 1994, the company announced its decision to discontinue 
the sale of its fully guaranteed large case pension products.  
(For additional information, see MD&A - Large Case Pensions in the 
Annual Report.)


<PAGE> 8

At December 31, assets under management, including Separate 
Accounts, were $46.3 billion in 1994, $52.8 billion in 1993, $53.4 
billion in 1992, $52.8 billion in 1991, and $50.6 billion in 1990.  
Under Financial Accounting Standard No. 115 ("FAS 115"), assets 
under management at December 31, 1994 and 1993 included net 
unrealized gains (losses) of approximately $(540.0) million and 
$750.0 million, respectively.

The following table summarizes premiums and deposits for the years 
indicated:

<TABLE>
<CAPTION>

(Millions)                   1994          1993          1992          1991          1990
                             ____          ____          ____          ____          ____
<S>                          <C>           <C>           <C>           <C>           <C>

Premiums................     $   234.4     $   185.9     $   204.2     $   292.4     $   597.0
Deposits (1)............       2,121.5       3,207.2       3,553.1       4,357.8       5,716.2
                             _________     _________     _________     _________     _________
  Total.................     $ 2,355.9     $ 3,393.1     $ 3,757.3     $ 4,650.2     $ 6,313.2
                             _________     _________     _________     _________     _________
                             _________     _________     _________     _________     _________

<FN>

(1) Under Financial Accounting Standard No. 97 ("FAS 97"), certain deposits
    are not included in premiums or revenue.

</TABLE>


Competition
___________

In the pension and annuity markets, competition arises from other 
insurance companies, banks, bank trust departments, mutual funds 
and other investment managers.  Principal competitive factors are 
cost, service, level of investment performance and the perceived 
financial strength of the investment manager.

Method of Distribution
______________________

Group pension products are sold principally through salaried field 
representatives and home office marketing personnel, who often 
work with independent consultants and brokers who assist in the 
production and servicing of business.

Reserves
________

As a result of discontinuing fully guaranteed large case pension 
products, the company established a reserve that represents the 
present value of anticipated net cash flow shortfalls as the 
liabilities from such products are run off.  Such net cash flow 
shortfalls include anticipated losses from negative interest 
margins (i.e., the amount by which interest credited to holders of 
such contracts exceeds interest earned on investment assets 
supporting the contracts), future capital losses, and operating 
expenses and other costs expected to be incurred as the 
liabilities are run off.


<PAGE> 9

In addition to the reserve described above, the company maintains 
reserves for guaranteed investment contracts equal to the amount 
on deposit for such contracts plus credited interest thereon.  
Reserves for annuity contracts reflect the present value of 
benefits based on actuarial assumptions established at the time of 
contract purchase.  Such assumptions are based on Aetna's 
experience, which is periodically reviewed against published 
industry data.  Reserves for experience rated contracts reflect 
cumulative deposits, less withdrawals and charges, plus credited 
interest thereon, plus/less net realized capital gains/losses 
(which the company seeks to recover through credited rates) and 
net unrealized capital gains/losses.


3.  Aetna Life Insurance & Annuity

Principal Products
__________________

Business units in the Aetna Life Insurance & Annuity segment 
("ALIAC") market a variety of life insurance, retirement and other 
savings and investment products (including individual and group 
annuities) financial and administrative services and mutual funds 
to individuals, pension plans, small businesses and employer-
sponsored groups.  ALIAC's universal life product accounted for 
approximately 89% of individual life sales in 1994.  (For 
additional information regarding the products offered by ALIAC, 
see MD&A - Aetna Life Insurance & Annuity in the Annual Report.)

Life insurance products typically require high costs to acquire 
business.  Retention, an important driver of profitability, is 
encouraged through product features.  For example, the company's 
universal and interest-sensitive whole life insurance contracts 
typically impose a surrender charge on policyholder balances 
withdrawn within 7 to 20 years of the contract's inception or for 
variable life within 10 years.  The period of time and level of 
the charge vary by product.  In addition, more favorable credited 
rates and policy loan terms may be offered after policies have 
been in force more than 10 years.  To further encourage retention, 
life insurance agents are typically paid renewal commissions or 
service fees.

Product retention is also a key driver of profitability for 
annuity products.  To encourage product retention, annuity 
contracts typically impose a surrender charge on policyholder 
balances withdrawn in the first 5 to 7 years after deposit.  The 
period of time and level of the charge vary by product.  In 
addition, a new approach being incorporated into recent variable 
contracts with fixed interest account investment options allows 
contractholders to receive of an incremental interest rate if 
withdrawals from the fixed account are spread over a period of 
five years.  Further, more favorable credited rates and policy 
loan terms may be offered after policies have been in force for 
more than 10 years.  Existing tax penalties on annuity 
distributions prior to age 59-1/2 provide an additional 
disincentive to premature surrenders of annuity balances, but do 
not impede transfers of those balances to other insurance 
carriers.


<PAGE> 10

Certain of the ALIAC life insurance and annuity products allow for 
customers to borrow against their policies.  At December 31, 1994, 
approximately 23% of outstanding policy loans were on individual 
annuity policies and had fixed interest rates ranging from 1% to 
3%.  Approximately 72% of outstanding policy loans at December 31, 
1994 were on individual life policies and had fixed interest rates 
ranging from 5% to 8%.  The remaining 5% of outstanding policy 
loans had variable interest rates averaging 8% at December 31, 
1994.  Investment income from policy loans was $23 million for the 
year ended December 31, 1994.

The company's variable products (variable universal life, variable 
life and variable annuity contracts) utilize Separate Accounts to 
provide contractholders with a vehicle for investments under which 
the contractholders assume the investment risks as well as the 
benefit of favorable performance.  Assets held under these 
products are invested, as designated by the contractholder or 
participant under a contract, in Separate Accounts which in turn 
invest in shares of mutual funds that are managed by ALIAC or 
other selected mutual funds that are not managed by ALIAC.  ALIAC 
is compensated by the Separate Accounts for bearing mortality and 
expense risks pertaining to these variable life and annuity 
contracts.  ALIAC also receives fees for serving as investment 
advisor, providing shareholder services, and promoting sales.  
Various investment advisory services also are offered through a 
number of affiliates that are registered investment advisors.

At December 31, assets under management, including Separate 
Accounts, were $19.4 billion in 1994, $18.2 billion in 1993, $15.0 
billion in 1992, $13.2 billion in 1991 and $10.9 billion in 1990.  
Under FAS 115, assets under management at December 31, 1994 and 
1993 included net unrealized gains (losses) of approximately 
$(390.0) million and $750.0 million, respectively.

The following table summarizes premiums and deposits for the years 
indicated:

<TABLE>
<CAPTION>

(Millions)                   1994        1993        1992        1991        1990
                             ____        ____        ____        ____        ____
<S>                          <C>         <C>         <C>         <C>         <C>
Premiums................     $   168.3   $   125.7   $   111.9   $   174.5   $   272.9
Deposits (1)............       3,375.7     2,797.6     1,937.3     1,871.0     1,645.6
                             _________   _________   _________   _________   _________
                             $ 3,544.0   $ 2,923.3   $ 2,049.2   $ 2,045.5   $ 1,918.5
                             _________   _________   _________   _________   _________
                             _________   _________   _________   _________   _________
<FN>
(1) Under FAS 97, certain deposits are not included in premiums or revenue.
</TABLE>


Competition
___________

The markets for individual life insurance products are highly 
competitive among insurance companies.  Competition largely is 
based upon product features and prices.

In the retirement and other savings and investment products 
markets, competition arises from other insurance companies, banks, 
mutual funds and other investment managers.  Principal competitive 
factors are cost, service, level of investment performance and the 
perceived financial strength of the investment manager or sponsor.


<PAGE> 11

Method of Distribution
______________________

Individual life insurance products are marketed by independent 
agents and brokers, career agents and registered representatives 
of selected broker-dealers.

Retirement products are sold through pension professionals, stock 
brokers and third party administrators who work closely with 
salaried field office employees.  Annuity products and mutual 
funds are distributed primarily through dedicated career agents 
and registered life brokers.

Reserves
________

Reserves for universal life and interest-sensitive whole life 
products (which are all experience rated) are equal to cumulative 
deposits less withdrawals and charges plus credited interest 
thereon,  plus/less net realized capital gains/losses (which ALIAC 
reflects through credited rates on an amortized basis).  These 
reserves also reflect unrealized capital gains/losses related to 
FAS No. 115.  Reserves for all other fixed individual life 
contracts are computed on the basis of assumed investment yield, 
mortality, morbidity and expenses (including a margin for adverse 
deviation), which generally vary by plan, year of issue and policy 
duration.

Reserves for limited payment contracts (immediate annuities with 
life contingent payout) are computed on the basis of assumed 
investment yield, mortality, morbidity and expenses (including a 
margin for adverse deviation), which generally vary by plan, year 
of issue and policy duration.  Reserves for investment contracts 
(deferred annuities and immediate annuities without life 
contingent payouts) are equal to cumulative deposits plus credited 
interest less charges thereon.  Reserves for experience rated 
contracts reflect cumulative deposits, less withdrawals and 
charges, plus credited interest thereon, plus/less net realized 
capital gains/losses (which ALIAC reflects through credited rates 
on an amortized basis).  These reserves also reflect unrealized 
capital gains/losses related to FAS No. 115.

The above-indicated reserves are computed amounts that, with 
additions from premiums and deposits to be received, and with 
interest on such reserves compounded annually at assumed rates, 
are expected to be sufficient to meet the company's policy 
obligations at their maturities or in the event of an insured's 
death, retirement or other withdrawal requests.

Reinsurance
___________

ALIAC retains no more than $10 million of risk per individual life 
insured.  Amounts in excess of the retention limit are reinsured 
with unaffiliated companies.

For additional information on reinsurance, see Note 16 of Notes to 
Financial Statements in the Annual Report.


<PAGE> 12

Individual Life Insurance In Force and Other Statistical Data
_____________________________________________________________

The following table summarizes changes in individual life 
insurance in force before deductions for reinsurance ceded to 
other companies for the years indicated:

<TABLE>
<CAPTION>

(Amounts in millions, except number of policies and average size of policies in force)

                                1994         1993         1992         1991         1990
                                ____         ____         ____         ____         ____
<S>                             <C>          <C>          <C>          <C>          <C>
Sales and additions:
  Permanent:
    Non-participating.......    $  3,348     $  2,656     $  3,107     $  2,930     $  3,836
    Participating...........           -            -            -            -            1
  Term:
    Non-participating.......         595          247           92          114          142
    Participating...........       1,800        1,851          761        1,222        1,921
                                ________     ________     ________     ________     ________
     Total..................    $  5,743     $  4,754     $  3,960     $  4,266     $  5,900
                                ________     ________     ________     ________     ________
                                ________     ________     ________     ________     ________

Terminations:
  Surrenders and conversions    $  1,494     $  1,692     $  2,004     $  1,976     $  1,930
  Lapses....................       1,973        2,151        2,372        2,752        2,953
  Other ....................         306          321          371          358          402
                                ________     ________     ________     ________     ________
     Total..................    $  3,773     $  4,164     $  4,747     $  5,086     $  5,285
                                ________     ________     ________     ________     ________
                                ________     ________     ________     ________     ________

In force, end of year:
  Permanent.................    $ 31,879     $ 31,139     $ 31,270     $ 31,263     $ 31,981
  Term......................      10,853        9,623        8,902        9,696        9,798
                                ________     ________     ________     ________     ________
     Total..................    $ 42,732     $ 40,762     $ 40,172     $ 40,959     $ 41,779
                                ________     ________     ________     ________     ________
                                ________     ________     ________     ________     ________

Number of policies in force,
 end of year:
  Non-participating.........     551,381      569,322      580,846      605,233      626,420
  Participating.............     120,967      127,319      135,440      146,308      157,309
                                ________     ________     ________     ________     ________
     Total..................     672,348      696,641      716,286      751,541      783,729
                                ________     ________     ________     ________     ________
                                ________     ________     ________     ________     ________

Average size of policies in
 force, end of year:
  Non-participating.........    $ 61,121     $ 56,639     $ 55,281     $ 52,983     $ 53,194
  Participating.............      74,658       66,887       59,528       60,775       60,124

</TABLE>


4.  Property-Casualty

Principal Products
__________________

The business units in the Property-Casualty segment provide most 
types of commercial and personal property-casualty insurance, 
bonds, and insurance-related services for businesses, government 
units and associations and individuals.

Commercial and personal coverages accounted for 70% and 30%, 
respectively, of Aetna's 1994 property-casualty net written 
premiums.  Commercial coverages are sold for risks of all sizes 
and include fire and allied lines, multiple peril, marine, 
workers' compensation, general liability (including product 
liability), commercial automobile, certain professional liability, 
and fidelity and surety bonds.  In addition, Aetna offers various 
services to businesses that choose to self-insure certain 
exposures.  Aetna also reinsures various property and liability 
risks, primarily through agreements with non-affiliated insurers, 
on both a treaty and facultative basis.  Personal coverages 
include auto and homeowners insurance.  (For additional 
information regarding the products offered by Property-Casualty, 
see MD&A - Property-Casualty in the Annual Report.)


<PAGE> 13

Approximately 87% of Aetna's 1994 net property-casualty business 
written was voluntary.  The remainder was written by various 
assigned risk plans, facilities and pools of which Aetna is a 
member.  These organizations are formed to meet statutory 
requirements relating to the writing of certain types of property-
casualty risks or to spread particularly large loss exposures 
among insurers pursuant to a prearranged allocation formula.  
Participation is mandatory, and underwriting decisions are made by 
such facilities independent of their membership.

For a significant portion of the commercial property-casualty 
business, Aetna uses advisory or compulsory rate structures and, 
in some instances, forms that were developed by agencies and 
bureaus in which insurance companies are authorized to participate 
through state regulation.  However, in recent years, Aetna has 
emphasized the development of independent coverages designed for 
sale to specific market segments.

The following table sets forth the premium revenue, underwriting 
results and net investment income, fees and other income and net 
realized capital gains of Property-Casualty for the years 
indicated:

<TABLE>
<CAPTION>
(Dollar amounts in millions)   1994          1993          1992          1991          1990
                               ____          ____          ____          ____          ____
<S>                            <C>           <C>           <C>           <C>           <C>
Statutory:
  Net written premiums.....    $ 4,400.5     $ 4,517.0     $ 4,916.3     $ 5,810.6     $ 6,290.8
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________

  Premiums earned..........    $ 4,321.9     $ 4,656.2     $ 5,046.9     $ 5,973.0     $ 6,403.2
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________

  Loss ratios..............         87.5%         90.1%         92.5%         83.7%         83.3%
  Expense ratios...........         35.2          34.4          32.9          30.7          29.2
                               _________     _________     _________     _________     _________

  Combined ratios:
    Before policyholder
    dividends..............        122.7%        124.5%        125.4%        114.4%        112.5%
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________
    After policyholder
    dividends..............        123.3%        125.2%        126.1%        115.4%        113.4%
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________
    After policyholder
    dividends, adjusted
    for discounting........        123.3%        116.4% (1)    126.1%        115.4%        113.4%
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________

GAAP:  (2)

  Net written premiums.....    $ 4,431.2     $ 4,465.2     $ 4,916.3     $ 5,810.6     $ 6,290.8
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________

  Premiums earned..........    $ 4,390.8     $ 4,653.2     $ 5,076.3     $ 6,010.4     $ 6,447.2
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________
  Adjusted underwriting
   loss (pretax) (3).......    $  (795.2)    $  (989.8)    $(1,291.6)    $  (850.3)    $  (821.1)
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________
  Net investment income,
   fees and other income
   and net realized
   capital gains...........    $   948.1     $ 1,247.7     $ 1,437.2     $ 1,323.3     $ 1,389.9
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________

  Loss ratios..............         84.9%         89.6%         93.0%         83.7%         83.0%
  Expense ratios...........         32.2          32.3          32.7          30.4          29.3

  Combined ratios:
    Before policyholder
    dividends..............        117.1%        121.9%        125.7%        114.1%        112.3%
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________
    After policyholder
    dividends..............        117.7%        122.5%        126.4%        115.0%        113.3%
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________
    After policyholder
    dividends, adjusted for
    discounting............        117.7%        113.6% (1)    126.4%        115.0%        113.3%
                               _________     _________     _________     _________     _________
                               _________     _________     _________     _________     _________
<FN>
(1) Has been adjusted for the cumulative effect benefit of discounting of workers'
    compensation life table indemnity reserves ($250.0 million, after-tax).

(2) Generally Accepted Accounting Principles.

(3) Includes a charge of $83.6 million in 1991 related to the company's withdrawal from
    the Massachusetts personal automobile insurance market pursuant to an agreement with
    the Massachusetts Division of Insurance.
</TABLE>

<PAGE> 14

Property-casualty underwriting profitability generally is 
expressed in terms of combined ratios.  When the combined ratio is 
under 100%, underwriting results are considered profitable; when 
the ratio is over 100%, underwriting results are considered 
unprofitable.  The combined ratio is the sum of (i) the percentage 
of earned premiums that is paid or reserved for losses and related 
loss adjustment expenses (the "loss ratio"), (ii) the percentage 
of earned premiums that is paid or reserved for dividends to 
policyholders, and (iii) the percentage of written premiums that 
is paid or reserved for sales commissions, premium taxes, 
administrative and other underwriting expenses (the "expense 
ratio").  The combined ratio does not reflect net investment 
income, fees and other income, net realized capital gains/losses 
or federal income taxes.  The statutory combined ratio does not 
reflect adjustments to underwriting results in accordance with 
GAAP.

Adjusted underwriting income/loss reflects GAAP adjustments 
(primarily the establishment of a reserve for severance and 
facilities charges, deferred policy acquisition costs and pre-1992 
salvage and subrogation) to underwriting results.

The following table sets forth for major domestic Property-
Casualty coverages for the years indicated (a) the percentage of 
Property-Casualty statutory net written premiums (NWP) and (b) 
statutory combined ratios before policyholders' dividends:

PERCENTAGE DISTRIBUTION OF STATUTORY NET WRITTEN PREMIUMS
AND COMBINED RATIOS

<TABLE>
<CAPTION>
                          1994             1993             1992             1991            1990
                          ____             ____             ____             ____            ____
                              COMBINED         COMBINED         COMBINED         COMBINED        COMBINED
                        NWP    RATIO     NWP    RATIO     NWP    RATIO     NWP    RATIO    NWP    RATIO
                        ___    _____     ___    _____     ___    _____     ___    _____    ___    _____

<S>                     <C>     <C>      <C>    <C>       <C>    <C>       <C>    <C>      <C>    <C>
Auto liability:
  Bodily injury.......   15.6%  111.6   17.7%   119.3    17.1%   127.7    18.3%   133.0    17.9%  131.4
  Property damage.....    5.7    95.9    6.5     70.0     6.5     81.2     7.2    101.8     7.1   101.8
Auto physical damage..    8.2    99.4    9.2     91.8     9.6     94.9    11.8     90.3    12.7    93.6
Fidelity and surety...    3.8    80.4    3.7     92.9     3.0     91.8     3.0     99.4     2.9   100.1
Fire and allied lines.    4.7   116.5    4.3    123.7     3.2    127.0     3.2    127.0     3.0    95.3
General liability.....   12.4   177.9   12.4    150.5    13.2    166.8    11.0    118.7    11.3   107.7
Homeowners............    9.0   136.1    9.1    124.0     7.9    132.6     8.8    112.4     9.6   108.0
Marine................    3.1    97.0    3.0     94.1     2.6     90.6     2.3    105.6     2.4    95.3
Multiple peril........   18.5   112.0   17.2    115.6    15.0    115.2    12.2    110.0    11.4   108.1
Workers' compensation.   17.5   117.1   17.9    171.1    20.8    138.2    21.2    120.0    20.7   125.8
Other (1).............    1.5     N/M*  (1.0)     N/M*    1.1      N/M*    1.0      N/M*    1.0     N/M*
                        _____          _____            _____            _____            _____
  Total before
   policyholders'
   dividends..........  100.0%  122.7  100.0%   124.5   100.0%   125.4   100.0%   114.4   100.0%  112.5
                        _____   _____  _____    _____   _____    _____   _____    _____   _____   _____
                        _____   _____  _____    _____   _____    _____   _____    _____   _____   _____
  Total after
   policyholders'
   dividends..........          123.3           125.2            126.1            115.4           113.4
                                _____           _____            _____            _____           _____
                                _____           _____            _____            _____           _____
  Total after
   policyholders'
   dividends, adjusted
   for discounting....          123.3           116.4 (2)        126.1            115.4           113.4
                                _____           _____            _____            _____           _____
                                _____           _____            _____            _____           _____
<FN>

(1) Net written premiums in 1993 reflect a refund of $115 million related to a
    Texas Catastrophe Insurance Association reinsurance contract.

(2) Has been adjusted for the cumulative effect benefit of discounting of workers'
    compensation life table indemnity reserves ($250.0 million, after-tax).

*   Not meaningful.

</TABLE>


<PAGE> 15

The following table summarizes Property-Casualty statutory net 
written premiums for the years indicated:

<TABLE>
<CAPTION>
(Millions)                      1994         1993         1992         1991         1990
                                ____         ____         ____         ____         ____
<S>                             <C>          <C>          <C>          <C>          <C>
Auto liability:
 Bodily injury...............   $  685.9     $  798.9     $  841.6     $1,061.0    $ 1,126.0
 Property damage.............      251.1        295.1        322.0        420.1        448.0
Auto physical damage.........      359.6        414.3        472.1        686.2        800.3
Fidelity and surety..........      169.3        166.8        146.9        174.4        184.9
Fire and allied lines........      206.0        192.6        156.4        186.2        191.1
General liability............      544.2        560.6        647.4        641.7        710.8
Homeowners...................      394.9        412.7        389.5        509.0        604.6
Marine.......................      137.7        134.0        125.8        135.6        150.2
Multiple peril...............      815.3        776.1        738.0        707.5        717.4
Workers' compensation........      768.8        808.4      1,021.4      1,231.3      1,298.3
Other (1)....................       67.7        (42.5)        55.2         57.6         59.2
                                ________     ________     ________     ________     ________
   Total.....................   $4,400.5     $4,517.0     $4,916.3     $5,810.6     $6,290.8
                                ________     ________     ________     ________     ________
                                ________     ________     ________     ________     ________
_____________________
<FN>
(1) Net written premiums in 1993 reflect a refund of $115 million related to a
    Texas Catastrophe Insurance Association reinsurance contract.
</TABLE>


The following table sets forth Aetna's percentage distributions of 
Property-Casualty direct written premiums in various jurisdictions 
for the years indicated:

        GEOGRAPHIC DISTRIBUTION OF DIRECT WRITTEN PREMIUMS

<TABLE>
<CAPTION>
                              1994       1993       1992       1991       1990
                              ____       ____       ____       ____       ____
<S>                           <C>        <C>        <C>        <C>        <C>

California (1,2)........       7.8%       9.2%       9.6%       9.2%       9.4%
Connecticut.............       5.9        5.8        6.0        6.0        5.9
Florida.................       5.4        4.7        4.1        4.1        4.5
Georgia.................       1.6        1.6        1.7        2.1        2.1
Illinois................       2.8        2.8        2.7        2.7        2.6
Louisiana...............       1.0        1.2        2.1        2.5        2.3
Massachusetts (3).......       5.4        6.2        7.5        8.3        8.1
New Jersey..............       5.6        5.1        4.4        3.9        3.4
New York................      17.9       17.7       17.4       16.8       16.1
North Carolina..........       3.4        3.4        3.0        3.1        3.2
Ohio....................       2.2        2.0        1.7        1.7        1.9
Pennsylvania............       7.5        7.6        7.3        7.0        6.6
Tennessee...............       2.0        2.2        2.0        1.9        1.8
Texas...................       5.9        4.9        4.9        6.0        6.3
Virginia................       2.8        2.7        2.7        2.6        3.4
All other (4)...........      22.8       22.9       22.9       22.1       22.4
                             _____      _____      _____      _____      _____
   Total................     100.0%     100.0%     100.0%     100.0%     100.0%
                             _____      _____      _____      _____      _____
                             _____      _____      _____      _____      _____
_____________________
<FN>

(1) The reduction in direct written premiums in 1994 primarily reflects a
    $30.7 million settlement with the California Department of Insurance
    related to Proposition 103, which settlement did not have a material
    effect on earnings as a result of reserves previously established.

(2) In 1993, the company withdrew from the California personal automobile
    insurance market and in 1994, reduced its exposure in certain commercial
    property-casualty lines.

(3) In early 1992, the company reached an agreement with the Massachusetts
    Division of Insurance and the Commonwealth Automobile Reinsurers ("CAR")
    under which Aetna withdrew from the Massachusetts personal automobile
    insurance market.  Beginning in 1992, all Massachusetts premium revenue
    is ceded to CAR.

(4) All other jurisdictions, none of which accounted for more than 2% in
    any year.

</TABLE>


<PAGE> 16

Competition
___________

Property-casualty insurance is highly competitive in the areas of 
price, service, agent relationships and, in the case of personal 
property-casualty business, method of distribution (i.e., use of 
independent agents, captive agents and/or employees).  There are 
approximately 3,900 property-casualty insurance companies in the 
United States.  Of those companies, approximately 900 operate in 
all or most states and write the vast majority of the business 
while over 2,300 offer one or more personal property-casualty 
products similar to those marketed by Aetna.  In addition, an 
increasing amount of commercial risks are covered by purchaser 
self-insurance, risk-purchasing groups, risk-retention groups and 
captive companies.  Based on 1993 written premiums, Aetna is one 
of the largest underwriters of commercial and personal property-
casualty coverages in the United States.

Method of Distribution
______________________

Aetna's property-casualty coverages are sold through approximately 
4,500 independent agents and brokers supervised and serviced by 22 
district offices with over 70 other points of service throughout 
the country.

Reserves
________

See Reserves Related to Property-Casualty Operations on pages 17 
through 20.

Reinsurance
___________

Approximately one-third of the property-casualty reinsurance ceded 
by Aetna arises in connection with its servicing relationships 
with various pools (frequently involuntary pools).  Aetna services 
or writes a portion of the pool's individual policies, handling 
all premium and loss transactions.  These "service" premiums and 
losses are then 100% ceded (net of an expense reimbursement) to 
the pools, whose members are jointly liable to Aetna as a 
servicer.

In addition to the above, Aetna utilizes a variety of reinsurance 
agreements, primarily with non-affiliated insurers, to control its 
exposure to large property-casualty losses.  These agreements, 
most of which are renegotiated annually as to coverage, limits and 
price, are structured either on a treaty basis (where all risks 
meeting prescribed criteria are automatically covered) or on a 
facultative basis (where the circumstances of specific individual 
insurance risks are reflected).  The amount of risk retained by 
Aetna depends on the underwriter's evaluation of the specific 
account, subject to maximum limits based on risk characteristics 
and the type of coverage.  The principal catastrophe reinsurance 
agreement currently in force covers approximately 90% of specified 
property losses between $150 million and $400 million.  The 
company also has in place for 1995 an aggregate excess of loss 
arrangement with respect to all of its property-casualty lines for 
accident year 1995, providing up to additional net protection of 
approximately $250 million.

For additional information on reinsurance, see MD&A - Property-
Casualty Reserves and Note 16 of Notes to Financial Statements in 
the Annual Report.


<PAGE> 17

Aetna has internal property-casualty reinsurance arrangements 
under which the risks and premiums of virtually all coverages 
written by the company's property-casualty subsidiaries (other 
than fidelity and surety bonds beginning in 1995) are 
redistributed among those subsidiaries on a percentage basis.  The 
percentages are adjusted from time to time to reflect the relative 
underwriting capacities and other capital needs of participants in 
the reinsurance agreement.

5.  Reserves Related to Property-Casualty Operations

Aetna establishes reserve liabilities designed to reflect 
estimates of the ultimate cost, to the extent reasonably 
estimable, of claims (including claim adjustment expenses).  Such 
liabilities for workers' compensation life table indemnity claims 
are discounted.  Estimating the ultimate cost of claims is a 
complex and uncertain process that relies on actuarial and 
statistical methods of analysis.  The company's reserves include:  
(i) claims that have been reported but not settled ("case" 
reserves), and (ii) claim costs that have been incurred but have 
not yet been reported ("IBNR" reserves).  The establishment of 
case reserves is dependent upon, among other things, the extent to 
which coverage was provided, the extent of injury or damage, and, 
in the case of a contested claim, an estimate of the likely 
outcome of the adjudication process (to the extent such outcome is 
estimable).  IBNR reserves, established to reflect events and 
occurrences that are not known to the company but, based on 
actuarial and historical data (adjusted for the effects of current 
social, economic and legal developments, trends and factors), are 
likely to result in claims, also include provision for development 
on case reserves.  As claims are reported and valued by the 
company, IBNR reserves are reduced by the amount of the reported 
claim cost.  IBNR reserves also are adjusted as the estimates of 
losses for a given accident year develop.  The length of time 
between occurrence and settlement of a claim varies depending on 
the coverage and type of claim involved.  Estimates become more 
difficult to make (and are, therefore, more subject to change) as 
the length of time increases.  Actual claim costs are dependent 
upon a number of complex factors including social and economic 
trends and changes in doctrines of legal liability and damage 
awards.

Reserves for property-casualty coverage are recomputed 
periodically using a variety of actuarial and statistical 
techniques for producing current estimates of actual claim costs, 
claim frequency, and other economic and social factors.  A 
provision for inflation in the calculation of estimated future 
claim costs is implicit since reliance is placed on both actual 
historical data that reflect past inflation and on other factors 
which are judged to be appropriate modifiers of past experience.  
Adjustments to reserves are reflected in the net income of the 
period in which such adjustments are made.

Aetna also establishes unearned premium reserves that are 
calculated on a pro rata basis and reserves for additional 
premiums or refunds on retrospectively rated policies based on 
experience.  This means that when a loss which will produce an 
additional premium payment is incurred on a retrospectively rated 
policy, the premium is recorded at the same time.  Likewise when 
loss experience is favorable, reserves for premium refunds are 
established.

For additional information on property-casualty reserves, including 
reserves for environmental-related claims, workers' compensation 
claims (including discounting) and asbestos-related claims, see 
MD&A - Property Casualty Reserves in the Annual Report.

<PAGE> 18

The following represents changes in aggregate reserves, net of 
reinsurance, for the combined property-casualty experience:  (1,2)

<TABLE>

<CAPTION>

(Millions)                                  1994         1993         1992
                                            ____         ____         ____

<S>                                         <C>          <C>          <C>

Net unpaid claims and claim adjustment
 expenses, net of discount, at
 beginning of year....................      $11,438      $11,747      $11,407

Incurred claims and claim
 adjustment expenses:

  Provision for insured events of
   the current year...................        3,631        3,724        4,407

  Increases in provision for insured
   events of prior years..............          252          574 (3)      466

  Cumulative effect of discounting....            -         (514)           -
                                            _______      _______      _______

Total incurred claims and claim
 adjustment expenses..................        3,883        3,784        4,873
                                            _______      _______      _______

Payments:

  Claims and claim adjustment expenses
   attributable to insured events of
   the current year...................        1,375        1,204        1,560

  Claims and claim adjustment expenses
   attributable to insured events of
   prior years........................        2,783        2,889        2,973
                                            _______      _______      _______

Total payments........................        4,158        4,093        4,533
                                            _______      _______      _______

Net unpaid claims and claim
 adjustment expenses, net of discount,
 at end of the year...................       11,163       11,438       11,747

Reinsurance recoverables, end of year.        4,629        4,410        4,233
Deductible amounts recoverable from
 policyholders, end of year (4).......          352            -            -
                                            _______      _______      _______

Gross unpaid claims and claim
 adjustment expenses, at end of year...     $16,144      $15,848      $15,980
                                            _______      _______      _______
                                            _______      _______      _______

<FN>

(1) Accident and health business is excluded.

(2) Includes International.

(3) Includes increases in provision for insured events of prior years of $674 million,
    offset by the current year effect of the change in accounting to report workers'
    compensation life table indemnity claims on a discounted basis of $(100) million
    related to the provision for insured events of prior years.

(4) FASB Interpretation No. 39, Offsetting of Amounts Related to Certain Contracts,
    was adopted in 1994.

</TABLE>


<PAGE> 19

The following table reconciles, as of year end, reserves 
determined in accordance with accounting principles and practices 
prescribed or permitted by insurance regulatory authorities 
("statutory basis reserves") to reserves determined in accordance 
with generally accepted accounting principles ("GAAP basis 
reserves"), for the property-casualty unpaid claims and claim 
adjustment expenses:  (1)

<TABLE>
<CAPTION>

(Millions)                                  1994         1993         1992
                                            ____         ____         ____
<S>                                         <C>          <C>          <C>
Statutory unpaid claims and
 claim adjustment expenses..........        $11,009      $11,253      $11,541

Adjustments:
  Subsidiary operations (2).........            154          185          206
  Reinsurance recoverables (3)......          4,629        4,410        4,233
  Deductible amounts recoverable
   from policyholders (4)...........            352            -            -
                                            _______      _______      _______

GAAP unpaid claims and
 claim adjustment expenses..........        $16,144      $15,848      $15,980
                                            _______      _______      _______
                                            _______      _______      _______

<FN>

(1) Accident and health business is excluded.

(2) These operations are accounted for on an equity basis for statutory purposes.

(3) FAS 113, Accounting and Reporting for Reinsurance of Short-Duration and
    Long-Duration Contracts, requires reporting claim liabilities gross of
    reinsurance recoverables.

(4) Information presented gross in 1994 due to the adoption of FASB Interpretation
    No. 39, Offsetting of Amounts Related to Certain Contracts, which requires reporting
    claim liabilities gross of deductible amounts recoverable from policyholders.

</TABLE>


The following reserve runoff table represents Aetna's combined 
property-casualty loss and loss expense experience, net of 
reinsurance recoverables and deductible amounts recoverable from 
policyholders.  Each column shows, for the year indicated:

    the reserve held at year-end;

    cumulative data for payments made in each subsequent year for
    that reserve year;

    liability reestimates made in each subsequent year for that
    reserve year;

    the redundancy (deficiency) represented by the difference
    between the original reserve held at the end of that year and
    the reestimated liability as of the end of 1994; and

    the change in redundancy (deficiency) from the end of each
    reserve year shown to the end of each subsequent reserve year.

The majority of increases to prior accident year reserves were for 
losses and related expenses for (i) workers' compensation claims; 
(ii) environmental-related liability risks; and (iii) asbestos and 
other product liability risks.

The table represents historical data; it would not be appropriate 
to use such data to project the company's future reserving 
activity or its future performance generally.


<PAGE> 20

<TABLE>
<CAPTION>

Year Ended                 1984   1985   1986   1987   1988   1989    1990    1991    1992    1993    1994
                           ____   ____   ____   ____   ____   ____    ____    ____    ____    ____    ____
(Millions)
<S>                        <C>    <C>    <C>    <C>    <C>    <C>     <C>     <C>     <C>     <C>     <C>
Net liability for unpaid
  claims and claim
  adjustment expenses net
  of discount  (1)........ $5,948 $6,560 $7,503 $8,708 $9,843 $10,557 $11,064 $11,407 $11,747 $11,438 $11,163

Paid (cumulative) as of:

  End of year..............     0      0      0      0      0       0       0       0       0       0       0
  One year later........... 1,844  2,067  2,180  2,552  3,134   3,069   3,080   2,973   2,889   2,783
  Two years later.......... 3,055  3,372  3,727  4,547  4,955   4,994   5,133   5,116   4,890
  Three years later........ 3,936  4,436  5,179  5,797  6,250   6,404   6,735   6,603
  Four years later......... 4,669  5,504  6,065  6,682  7,212   7,578   7,789
  Five years later......... 5,493  6,118  6,692  7,354  8,048   8,340
  Six years later.......... 5,942  6,571  7,197  7,991  8,584
  Seven years later........ 6,290  6,955  7,705  8,376
  Eight years later........ 6,597  7,375  8,002
  Nine years later......... 6,959  7,639
  Ten years later.......... 7,183

Net liability reestimated as of:

  End of year.............. 5,948  6,560  7,503  8,708  9,843  10,557  11,064  11,407  11,747  12,072  11,807
  One year later........... 6,013  6,778  7,746  9,022 10,015  10,644  11,109  11,873  12,421  12,311
  Two years later.......... 6,272  7,056  8,188  9,312 10,203  10,791  11,737  12,677  12,741
  Three years later........ 6,531  7,536  8,539  9,547 10,457  11,376  12,578  13,068
  Four years later......... 6,926  7,910  8,813  9,808 10,985  12,090  13,038
  Five years later......... 7,291  8,156  9,084 10,319 11,624  12,643
  Six years later.......... 7,515  8,422  9,577 10,860 12,169
  Seven years later........ 7,778  8,907 10,089 11,419
  Eight years later........ 8,250  9,398 10,652
  Nine years later......... 8,707  9,964
  Ten years later.......... 9,248

Effect of discounting:
  1993.....................  (235)  (274)  (317)  (362)  (417)   (473)   (528)   (577)   (614)   (634)
  1994.....................  (216)  (256)  (299)  (343)  (397)   (453)   (512)   (563)   (596)   (621)   (644)

Net liability reestimated,
  net of discounting:  (1)
  1993..................... 8,472  9,124  9,772 10,498 11,207  11,617  12,050  12,100  11,807  11,438
  1994..................... 9,032  9,708 10,353 11,076 11,772  12,190  12,526  12,505  12,145  11,690  11,163

Redundancy (Deficiency)....(3,084)(3,148)(2,850)(2,368)(1,929) (1,633) (1,462) (1,098)   (398)   (252)      0
Change in redundancy
  (deficiency).............   N/A    (64)   298    482    439     296     171     364     700     146     252

Gross liability,
  end of year (2,3)........                                                           $15,980 $15,848 $16,144
Reinsurance recoverables...                                                             4,233   4,410   4,629
Deductible amounts
  recoverable from
  policyholders............                                                                 -       -     352
                                                                                      _______ _______ _______
Net liability,
  end of year..............                                                           $11,747 $11,438 $11,163
                                                                                      _______ _______ _______
                                                                                      _______ _______ _______

Gross reestimated
  liability-latest (2).....                                                           $16,701 $16,237
Reestimated
  recoverable-latest.......                                                             4,556   4,547
                                                                                      _______ _______
Net reestimated
  liability-latest.........                                                           $12,145 $11,690
                                                                                      _______ _______
                                                                                      _______ _______

Gross cumulative deficiency                                                           $  (721)$  (389)
                                                                                      _______ _______
                                                                                      _______ _______
<FN>
(1) The reestimated liability at December 31, 1993 includes $574 million related to development
    in workers' compensation reserves in the fourth quarter of 1993.  This affected the reestimated
    liability by reserve year as follows:  $574 million in 1992; $565 million in 1991; $534 million
    in 1990; $484 million in 1989; $433 million in 1988; $396 million in 1987; $372 million in 1986;
    $346 million in 1985; and $308 million in 1984.
(2) Information presented gross in 1994 and 1993 due to the adoption of FAS No. 113, Accounting and
    Reporting for Reinsurance of Short-Duration and Long-Duration Contracts in 1993.  Adoption of
    FAS No. 113 had no impact on the 1993 net loss.
(3) Information presented gross in 1994 due to the adoption of FASB Interpretation No. 39, Offsetting
    of Amounts Related to Certain Contracts, which requires reporting claim liabilities gross of
    deductible amounts recoverable from policyholders.
</TABLE>

<PAGE> 21

6.  International

The International segment ("International"), through subsidiaries 
and joint venture operations, sells primarily life insurance and 
financial services products in non-U.S. markets including Canada, 
Mexico, Taiwan, Chile, Malaysia, Hong Kong, New Zealand, Peru, 
Argentina and Korea.  (For additional information regarding the 
products offered by International, see MD&A - International in the 
Annual Report.)  As part of the company's decision to realign its 
segments (please see "Organization of Business" on page 3), United 
Kingdom reinsurance operations, previously included within 
International, are now reflected in the Property-Casualty segment.  
International operations are subject to regulation in the various 
jurisdictions in which they do business.  In most of the 
geographic areas and markets in which International has 
operations, the competition is extensive.  Methods of distribution 
vary by country and by product, and include direct sales, sales 
through agents and brokers, and sales through joint ventures.

On June 30, 1993, the company completed the sale of its U.K. life 
and investment management operations.  The company realized an 
after-tax capital loss of $12 million on the sale as well as $37 
million of tax benefits from cumulative operating losses of the 
subsidiary not previously available for tax benefits.

The company completed the sale of its 43% interest in La Estrella 
S.A. de Seguros, a Spanish insurance company, to Banco Hispano 
Americano in May 1991.  The company realized a net capital gain of 
$33 million (after-tax) on the sale.

Operations outside the U.S. have added risks such as 
nationalization, expropriation, foreign currency fluctuations and 
the potential for restrictive capital regulations.  Despite these 
risks, management believes that its operations are sufficiently 
maturing and, therefore, such risks are not substantial to the 
company.

The following table sets forth International's premium revenue, 
net investment income, other income and net realized capital 
gains/losses and life insurance in force, before deductions for 
reinsurance ceded to other companies:

<TABLE>
<CAPTION>

(Millions)                          1994         1993         1992         1991         1990
                                    ____         ____         ____         ____         ____
<S>                                 <C>          <C>          <C>          <C>          <C>

Premiums..........................  $  887.1     $  909.5     $  814.8     $  500.0     $  415.9
                                    ________     ________     ________     ________     ________
                                    ________     ________     ________     ________     ________
Net investment income, other
 income and net realized capital
 gains/losses.....................  $  409.9     $  369.8     $  387.6     $  390.2     $  257.0
                                    ________     ________     ________     ________     ________
                                    ________     ________     ________     ________     ________
Life insurance in force, end
  of year.........................  $ 45,126     $ 44,186     $ 37,172     $ 30,083     $ 21,238
                                    ________     ________     ________     ________     ________
                                    ________     ________     ________     ________     ________

</TABLE>


Premium reduction in 1994 resulted from the company's 1994 change 
in its accounting for an affiliate from the consolidated basis of 
accounting to the equity basis of accounting (recorded premiums 
were $79 million and $136 million in 1994 and 1993, respectively) 
which was substantially offset by growth in the Pacific Rim 
operations.

Premium growth in 1992 included $128 million from the second 
quarter consolidation of a previously unconsolidated subsidiary as 
a result of an increase in the company's ownership percentage.


<PAGE> 22

7.  Corporate

The Corporate segment includes interest expense and other 
corporate net expenses, which are not directly related to the 
company's business segments.  Other corporate net expenses include 
operating expenses such as corporate staff areas, advertising and 
contributions, and net investment income.

8.  General Account Investments

The investment income and realized capital gains and losses from 
the investment portfolios of the company's insurance subsidiaries 
contribute to the results of the insurance operations described 
above. The company's investment objective is to fund policyholder 
and certain corporate liabilities in a manner which enhances 
shareholder and contractholder value, subject to appropriate risk 
constraints.  It is the company's intention that this investment 
objective be met by a mix of investments which matches the 
characteristics of the liabilities they support; diversifies the 
types of investment risks in its portfolios by interest rate, 
liquidity, credit and equity price risk; and achieves asset 
diversification by investment type, industry, issuer and 
geographic location.  The company regularly projects duration and 
cash flow characteristics of its liabilities and makes appropriate 
adjustments in the portfolios of assets which support the 
liabilities.  Using financial modeling and other techniques, the 
company regularly evaluates the appropriateness of the investments 
relative to the company's management-approved investment 
guidelines and the business objectives of the portfolios.  The 
company also utilizes futures and forward contracts, swap 
agreements and certain debt instruments with derivative 
characteristics in order to manage investment returns and to align 
maturities, interest rates, currency rates and funds availability 
with its obligations.  (See Note 18 of Notes to Financial 
Statements in the Annual Report for a discussion of the company's 
hedging activities.)

See MD&A - General Account Investments in the Annual Report for a 
further discussion of investments.

a.  Investments Related to Life, Health, Annuity and Pension 
Operations

Consistent with the nature of the contract obligations involved in 
the company's health care, group life and disability, individual 
life, annuity and pension operations, the majority of the general 
account assets attributable to such operations have been invested 
in intermediate and long-term, fixed-income obligations such as 
Treasury obligations, mortgage-backed securities, corporate debt 
securities and mortgage loans.

For information concerning the valuation of investments, see Notes 
1, 5, and 6 of Notes to Financial Statements in the Annual Report.


<PAGE> 23

The following table sets forth the distribution of invested 
assets, cash and cash equivalents and accrued investment income as 
of the end of the years indicated:  (1)

<TABLE>

<CAPTION>

(Millions)                                 1994 (2,3)   1993 (2,3) 1992       1991       1990
                                           ____         ____       ____       ____       ____

<S>                                        <C>          <C>        <C>        <C>        <C>
Debt securities:
  Bonds:
    United States Government and
      government agencies and
      authorities..................        $ 4,214.4    $ 4,800.8  $ 2,318.7  $ 1,443.1  $   585.7
    States, municipalities and
      political subdivisions.......            276.3        157.8      171.7      247.6      123.4
    Foreign(4).....................            846.1      2,538.5      846.5    1,410.6    1,526.9
    Public utilities...............          1,944.1      2,046.1    1,615.3    2,079.9    2,518.3
    Financial......................          3,999.7      3,643.0    2,188.6    2,477.3    2,985.7
    Transportation/Capital goods...          2,234.4      1,950.8    1,728.6    2,285.2    2,650.9
    Mortgage-backed securities.....          5,433.1      8,735.5   10,117.4    8,208.3    7,132.1
    Other loan-backed securities...          1,331.8         49.1          -          -          -
    Food and fiber.................            597.8        708.5      652.5      750.4      857.7
    Natural resources and services             686.8        842.0      600.4      738.5      800.0
    All other corporate bonds......          4,165.0      3,033.6    3,037.5    2,816.1    2,765.1
                                           _________    _________  _________  _________  _________
      Total bonds..................         25,729.5     28,505.7   23,277.2   22,457.0   21,945.8
  Redeemable preferred stocks......              3.2          1.3        1.8        3.3        1.6
                                           _________    _________  _________  _________  _________
      Total debt securities........         25,732.7     28,507.0   23,279.0   22,460.3   21,947.4
                                           _________    _________  _________  _________  _________

  Equity securities:
    Common stocks..................            277.4        210.5      108.8      101.1       73.2
    Non-redeemable preferred stocks             92.3        101.0      107.8      158.3      147.4
                                           _________    _________  _________  _________  _________
      Total equity securities......            369.7        311.5      216.6      259.4      220.6
                                           _________    _________  _________  _________  _________

  Short-term investments...........            261.8        413.5      838.7       73.3      883.1
  Mortgage loans...................          9,742.9     12,331.2   15,203.0   17,507.0   19,499.2
  Real estate (5)..................          1,162.2        944.1    1,116.3    1,022.2      728.7
  Policy loans.....................            481.3        448.3      427.4      414.2      404.1
  Other............................            319.3        242.3      319.9      229.4      593.8
                                           _________    _________  _________  _________  _________
      Total investments............        $38,069.9    $43,197.9  $41,400.9  $41,965.8  $44,276.9
                                           _________    _________  _________  _________  _________
                                           _________    _________  _________  _________  _________

Cash and cash equivalents..........        $ 2,158.4    $ 1,232.5  $ 1,516.3  $ 2,231.3  $ 1,037.8
                                           _________    _________  _________  _________  _________
                                           _________    _________  _________  _________  _________

Accrued investment income..........        $   552.9    $   529.7  $   523.6  $   575.8  $   630.4
                                           _________    _________  _________  _________  _________
                                           _________    _________  _________  _________  _________

<FN>

(1) Excludes International, Separate Accounts and investments in affiliates.

(2) The majority of debt securities are carried at fair value in 1994 and 1993 due to the
    adoption of FAS No. 115, Accounting for Certain Investments in Debt and Equity Securities,
    at December 31, 1993.

(3) Includes $11.9 billion and $14.7 billion of assets supporting discontinued products in
    1994 and 1993, respectively.

(4) "Foreign" includes foreign governments, foreign political subdivisions, foreign public
    utilities and all other bonds of foreign issuers.

(5) Includes acquisition of real estate through foreclosures (including in-substance
    foreclosures in 1994) of mortgage loans.

</TABLE>


<PAGE> 24

Mortgage-backed securities at December 31, 1994, 1993 and 1992 
included the following categories of collateralized mortgage 
obligations:  (1)

<TABLE>
<CAPTION>
(Millions)
                                    Amortized Cost     Fair Value       Yield (2)
                                    ______________     __________       _____
<S>                                 <C>                <C>              <C>
1994
Sequentials....................     $  775.7           $  765.3           9.4%
Planned Amortization Class.....      1,971.9            1,831.2           8.1
Interest Only..................         21.1               38.7          27.9
Principal Only.................         56.0               61.3          11.8
Z-Tranches.....................        300.6              271.0           9.1
Other..........................        124.5              123.8           8.6
                                    ________           ________
  Total........................     $3,249.8           $3,091.3           8.7
                                    ________           ________
                                    ________           ________

1993
Sequentials....................     $1,788.4           $1,890.9          10.3%
Planned Amortization Class.....      3,347.7            3,562.2           8.8
Interest Only..................         45.0               45.7          13.1
Principal Only.................         73.8              110.5          19.6
Z-Tranches.....................        276.8              319.6          10.2
Other..........................         66.1               65.4           6.9
                                    ________           ________
  Total........................     $5,597.8           $5,994.3           9.5
                                    ________           ________
                                    ________           ________

1992
Sequentials....................     $2,090.5           $2,213.6          10.2%
Planned Amortization Class.....      2,689.6            2,847.2           9.0
Interest Only..................        287.3              236.3           5.3
Principal Only.................        242.7              273.3          10.4
Z-Tranches.....................        661.6              714.5          10.4
Other..........................        204.9              205.1           7.9
                                    ________           ________
  Total........................     $6,176.6           $6,490.0           9.4
                                    ________           ________
                                    ________           ________
<FN>
(1) Excludes Separate Accounts.
(2) Based on fair value at year-end.
</TABLE>


The following table summarizes investment results of the company's 
life, health, disability, annuity and pension operations:  (1)

<TABLE>
<CAPTION>
(Dollar amounts in millions)
                        Net              Earned Net        Net Realized     Change in Net
                     Investment          Investment        Capital Gains    Unrealized Capital
                     Income (2)        Income Rate (3)     (Losses) (4)     Gains and Losses (5)
                     __________        _______________     _____________    ____________________
<S>                  <C>               <C>                 <C>              <C>
For the year:
1994...............  $3,327.7           8.1%               $  (50.8)        $ (821.3)
1993...............   3,653.0           8.8                   (40.8)           281.8
1992...............   3,835.9           8.9                  (111.7)           (26.9)
1991...............   4,202.7           9.7                  (373.0)            79.9
1990...............   4,258.9           9.9                  (171.8)           (29.3)
<FN>
(1) Excludes International, Separate Accounts and investments in affiliates.

(2) Net investment income excludes net realized capital gains and losses and is after
    deduction of investment expenses, but before deduction of federal income taxes.

(3) The Earned Net Investment Income Rate for any given year is equal to (a) net
    investment income divided by (b) the average of (i) cash, invested assets and
    investment income due and accrued less borrowed money at the beginning of the
    year, and (ii) cash, invested assets and investment income due and accrued less
    borrowed money at the end of the year, less net investment income.  Debt securities
    are reflected primarily at amortized cost for purposes of this calculation.
    Investments in affiliates have been eliminated for purposes of this calculation.

(4) Net realized capital gains (losses) are before federal income taxes and after
    gains and losses allocable to experience rated pension contractholders.
    Intercompany transactions between life, health, disability, annuity and pension
    operations and property-casualty operations have not been eliminated.

(5) Net unrealized capital gains (losses) are before federal income taxes and exclude
    changes in unrealized capital gains (losses) related to experience rated
    contractholders in all years and discontinued products in 1994 and 1993.
</TABLE>


<PAGE> 25

b.  Investments Related to Property-Casualty Operations

The investment strategies for assets related to property-casualty 
operations are designed to maximize yield with appropriate 
liquidity and preservation of principal, and to permit periodic 
adjustment of the portfolio mix, in order to reflect changes in 
underwriting results and thus maximize after-tax income.  Common 
stocks are held with the primary objective of achieving portfolio 
appreciation through capital gains and income.  The size of common 
stock holdings is controlled in relation to surplus levels.

For information concerning the valuation of investments, see Notes 
1, 5, and 6 of Notes to Financial Statements in the Annual Report.

The following table sets forth the distribution of invested 
assets, cash and cash equivalents and accrued investment income as 
of the end of the years indicated:  (1)

<TABLE>

<CAPTION>

(Millions)                               1994 (2)     1993 (2)    1992        1991        1990
                                         ____         ____        ____        ____        ____

<S>                                      <C>          <C>         <C>         <C>         <C>

Debt Securities:
  Bonds:
    United States Government
      and government agencies
      and authorities...............     $ 3,417.5    $ 3,341.9    $   895.7   $   828.2   $   622.9
    States, municipalities and
      political subdivisions........       1,408.1      2,086.9      2,210.0     2,953.1     4,114.4
    Foreign(3)......................         161.2        757.2        533.0       597.8       431.4
    Public utilities................         520.3        717.3        676.3       455.9       293.3
    Financial.......................         536.1      1,280.0        708.6       946.3       768.1
    Transportation/Capital goods....         616.3        215.9        290.3       256.2       225.1
    Mortgage-backed securities......       1,273.6      1,453.5      3,029.5     2,561.7     2,009.9
    Other loan-backed securities....         317.5            -            -           -           -
    Food and fiber..................         141.9        218.3        213.9       169.8       122.3
    Natural resources and services..         282.1        279.6        334.3       268.6       166.6
    All other corporate bonds.......         863.9        636.8        602.9       287.0       217.3
                                         _________    _________    _________   _________   _________
        Total bonds.................       9,538.5     10,987.4      9,494.5     9,324.6     8,971.3
    Redeemable preferred stocks.....          71.1         92.3        162.8       140.5       166.0
                                         _________    _________    _________   _________   _________
        Total debt securities.......       9,609.6     11,079.7      9,657.3     9,465.1     9,137.3
                                         _________    _________    _________   _________   _________

Equity securities:
  Common stocks.....................       1,038.5      1,169.5      1,015.0       645.9       484.2
  Non-redeemable preferred stocks...          17.3          7.2          7.8        14.4        21.0
                                         _________    _________    _________   _________   _________
        Total equity securities.....       1,055.8      1,176.7      1,022.8       660.3       505.2
                                         _________    _________    _________   _________   _________

Short-term investments..............         113.2        235.8        506.8       479.2       720.1
Mortgage loans......................       1,453.7      1,834.1      2,126.0     2,303.8     2,629.7
Real estate (4).....................         267.6        314.8        344.6       317.0       240.3
Other...............................         389.3        295.7        258.9       490.0       331.8
                                         _________    _________    _________   _________   _________
        Total investments...........     $12,889.2    $14,936.8    $13,916.4   $13,715.4   $13,564.4
                                         _________    _________    _________   _________   _________
                                         _________    _________    _________   _________   _________

Cash and cash equivalents...........     $   699.5    $   (11.0)   $   597.1   $   382.4   $   471.3
                                         _________    _________    _________   _________   _________
                                         _________    _________    _________   _________   _________

Accrued investment income...........     $   179.6    $   206.8    $   192.7   $   201.6   $   209.2
                                         _________    _________    _________   _________   _________
                                         _________    _________    _________   _________   _________

<FN>

(1) Excludes International and investments in affiliates.

(2) The majority of debt securities are carried at fair value in 1994 and 1993 due to the
    adoption of FAS No. 115, Accounting for Certain Investments in Debt and Equity Securities,
    at December 31, 1993.

(3) "Foreign" includes foreign governments, foreign political subdivisions, foreign public
    utilities and all other bonds of foreign issuers.

(4) Includes acquisition of real estate through foreclosures (including in-substance
    foreclosures in 1994) of mortgage loans.

</TABLE>


<PAGE> 26

Mortgage-backed securities at December 31, 1994, 1993 and 1992 
included the following categories of collateralized mortgage 
obligations:  (1)

<TABLE>
<CAPTION>
(Millions)
                                    Amortized Cost     Fair Value        Yield (2)
                                    ______________     __________        _____
<S>                                 <C>                <C>               <C>
1994
Sequentials....................     $  169.4           $  148.3           8.8%
Planned Amortization Class.....        143.5              129.8           9.1
                                    ________           ________
  Total........................     $  312.9           $  278.1           8.9
                                    ________           ________
                                    ________           ________


1993
Sequentials....................     $  102.4           $  102.4           6.7%
Planned Amortization Class.....        211.6              213.0           6.8
Principal Only.................         53.3               54.7           6.5
Z-Tranches.....................          7.0                7.0           4.8
Other..........................         10.3               10.2           8.9
                                    ________           ________
  Total........................     $  384.6           $  387.3           6.8
                                    ________           ________
                                    ________           ________


1992
Sequentials....................     $  468.9           $  488.4           7.9%
Planned Amortization Class.....        874.7              909.7           7.9
Principal Only.................         40.5               46.4           1.0
Z-Tranches.....................         11.1               11.5           6.8
Other..........................         80.1               80.9             -
                                    ________           ________
  Total........................     $1,475.3           $1,536.9           7.7
                                    ________           ________
                                    ________           ________

<FN>

(1) Excludes International.
(2) Based on fair value at year-end.

</TABLE>


The following table summarizes investment results of the company's 
property-casualty insurance operations:  (1)

<TABLE>
<CAPTION>
(Dollar amounts in millions)
                        Net         Earned Net        Net Realized       Change in Net
                     Investment     Investment        Capital Gains      Unrealized Capital
                     Income (2)   Income Rate (3)     (Losses) (4)       Gains and Losses (4)
                     __________   _______________     _____________      ____________________
<S>                  <C>               <C>            <C>                <C>
For the year:
1994...............  $  842.5          6.5%           $   (8.4)          $ (914.1)
1993...............     959.0          7.3               149.2              207.6
1992...............     946.1          7.2               217.4              200.6
1991...............   1,057.9          8.3                36.2              118.3
1990...............   1,136.0          8.8                53.8             (129.8)

<FN>

(1) Excludes International and investments in affiliates.

(2) Net investment income excludes net realized capital gains and losses and is after
    deduction of investment expenses, but before deduction of federal income taxes.

(3) The Earned Net Investment Income Rate for any given year is equal to (a) net
    investment income divided by (b) the average of (i) cash, invested assets and
    investment income due and accrued less borrowed money at the beginning of the
    year, and (ii) cash, invested assets and investment income due and accrued less
    borrowed money at the end of the year, less net investment income.  Debt
    securities are reflected primarily at amortized cost for purposes of this
    calculation.  Investments in affiliates have been eliminated for purposes of
    this calculation.

(4) Net realized and unrealized capital gains (losses) are before federal income
    taxes.  Intercompany transactions between life, health, disability, annuity and
    pension operations and property-casualty operations have not been eliminated.

</TABLE>


<PAGE> 27

9.  Other Matters

a.   Regulation

General

Aetna's insurance businesses are subject to comprehensive, 
detailed regulation throughout the United States and the foreign 
jurisdictions in which they do business.  The laws of the various 
jurisdictions establish supervisory agencies with broad authority 
to regulate, among other things, the granting of licenses to 
transact business, premium rates for certain coverages, trade 
practices, agent licensing, policy forms, underwriting and claims 
practices, reserve adequacy, insurer solvency, the maximum 
interest rates that can be charged on life insurance policy loans, 
and the minimum rates that must be provided for accumulation of 
surrender value.  Many also regulate investment activities on the 
basis of quality, distribution and other quantitative criteria.  
Further, many jurisdictions compel participation in, and regulate 
composition of, various residual market mechanisms.  Aetna's 
operations and accounts are subject to examination at regular 
intervals by domestic and other insurance regulators.

Although the federal government does not directly regulate the 
business of insurance, many federal laws do affect that business.  
Existing or recently proposed federal laws that may significantly 
affect or would affect, if passed, the insurance business cover 
such matters as employee benefits (including regulation of 
federally qualified HMOs), controls on medical care costs, medical 
entitlement programs (e.g., Medicare), environmental regulation 
and liability, product liability, civil justice procedural reform, 
earthquake insurance, removal of barriers preventing banks from 
engaging in the insurance and mutual fund businesses, the taxation 
of insurance companies (see Notes 1 and 10 of Notes to Financial 
Statements in the Annual Report), and the tax treatment of 
insurance products.

Health Care

In addition to regulations applicable to insurance companies 
generally (described above), Aetna's managed health care products 
are subject to varying levels of state insurance, HMO and/or 
health department regulation.  Among other things, these 
regulations address health care network composition, new product 
offerings, product and benefit contracts and the extent to which 
insurance companies may provide incentives to insureds to use 
services from "preferred" health care service providers or pay 
contractual and non-contractual health care providers unequally 
for equivalent services.  Some jurisdictions also regulate the 
extent to which managed health care plans may offer their 
enrollees the option of receiving health care services from non-
contracting providers.  Additionally, these plans are subject to 
state, and in some cases federal, regulation concerning solvency 
and other operational requirements.

Legislative proposals to change the health insurance system have 
been prominent at both the state and national levels.  (For 
additional discussion, see MD&A - Aetna Health Plans in the Annual 
Report.)


<PAGE> 28

Insurance and Insurance Holding Company Laws

Several states, including Connecticut, regulate affiliated groups 
of insurers such as Aetna under insurance holding company 
statutes. Under such laws, intercorporate asset transfers and 
dividend payments from insurance subsidiaries may require prior 
notice to or approval of the insurance regulators, depending on 
the size of such transfers and payments relative to the financial 
position of the affiliate making the transfer.  These laws also 
regulate changes in control, as do Connecticut corporate laws 
(which also apply to insurance corporations).  See Note 8 of Notes 
to Financial Statements in the Annual Report.

As a licensed Connecticut-domiciled insurer, the company is 
subject to Connecticut insurance laws.  These laws, among other 
things, enable insurers to redeem their stock from any shareholder 
who fails, in the good faith determination of the insurer's board 
of directors, to (i) meet the qualifications prescribed under 
Connecticut law for licensure, or (ii) to secure the regulatory 
approvals required under Connecticut law for ownership of such 
stock.

Securities Laws

The Securities and Exchange Commission ("SEC") and, to a lesser 
extent, the states regulate the sales and investment management 
activities and operations of broker-dealer and investment advisory 
subsidiaries of the company.  The SEC also regulates some of its 
pension, annuity, life insurance and other investment and 
retirement products.  Additionally, certain Separate Accounts and 
mutual funds of Aetna Life Insurance and Annuity Company are 
subject to SEC regulation under the Investment Company Act of 
1940.  As a stock company, Aetna also is subject to extensive 
reporting obligations under the Securities Exchange Act of 1934.

Property-Casualty

Over the past several years, the company's insurance businesses, 
particularly personal auto and property insurance and workers' 
compensation coverage, have been the target of various regulatory 
and legislative initiatives that management believes have limited 
the basis upon which the company conducts its activities.  Such 
initiatives have, among other things, sought to (1) freeze or 
reduce rates that may be charged for certain insurance products, 
(2) force the company to issue and renew insurance in markets 
where the company cannot achieve an acceptable rate of return, and 
(3) restructure residual or involuntary markets.  Residual or 
involuntary markets are established to provide coverage to 
insureds unable to obtain policies in the private marketplace.  As 
state-mandated rates are frequently inadequate, these markets are 
in effect often subsidized by the insurance industry.


<PAGE> 29

Insurance Company Guaranty Fund Assessments

Under insurance guaranty fund laws existing in all states, 
insurers doing business in those states can be assessed (up to 
prescribed limits) for certain obligations of insolvent insurance 
companies to policyholders and claimants.  The after-tax charges 
to earnings for guaranty fund obligations for the years ended 
December 31, 1993 and 1992 were $17 million and $49 million, 
respectively.  There were no such charges in 1994.  The level of 
the 1992 provision is principally related to insolvencies of 
certain large insurance companies.  The amounts ultimately 
assessed may differ from the amounts charged to earnings because 
such assessments may not be made for several years and will depend 
upon the final outcome of regulatory proceedings.

While the company has historically recovered more than half of 
guaranty fund assessments through statutorily permitted premium 
tax offsets and policy surcharges, significant increases in 
assessments could jeopardize future efforts to recover such 
assessments.  In addition, there have been some legislative 
efforts to limit or repeal the tax offset provisions, although 
these efforts have, for the most part, been unsuccessful.

The company has actively supported improved insurer solvency 
regulation, including measures that would facilitate earlier 
identification of troubled insurers, and amendments to guaranty 
fund laws that would reduce the costs of such insolvencies to 
solvent insurers such as Aetna.

See MD&A - Regulatory Environment in the Annual Report for 
additional discussion of regulatory matters.

b.   NAIC IRIS Ratios

The NAIC IRIS ratios cover 12 categories of financial data with 
defined usual ranges for each category.  The ratios are intended to 
provide insurance regulators "early warnings" as to when a given 
company might warrant special attention.  An insurance company may 
fall out of the usual range for one or more ratios and such variances 
may result from specific transactions that are in themselves 
immaterial or eliminated at the consolidated level.  In 1993, two of 
Aetna Life and Casualty Company's significant subsidiaries had more 
than two IRIS ratios that were outside of the NAIC usual ranges, as 
discussed below.

Aetna Life Insurance Company ("ALIC") fell outside the usual ranges 
in 1993 for:  (i) the Net Change in Capital and Surplus Ratio which 
is calculated by dividing the change in capital and surplus between 
the prior and the current year (net of any capital and surplus paid 
in) by the prior year capital and surplus; (ii) the Gross Change in 
Capital and Surplus Ratio which is calculated by dividing the change 
in capital and surplus between the prior and the current year by the 
prior year capital and surplus; (iii) the Adequacy of Investment 
Income Ratio which compares investment income to credited interest; 
and (iv) the Real Estate and Total Mortgage Loans to Cash and 
Invested Assets Ratio which measures the relative size of the real 
estate and mortgage loan portfolios.  The regulators were satisfied, 
after analysis, that ALIC did not warrant special attention.


<PAGE> 30

In 1993, The Aetna Casualty and Surety Company ("AC&S") fell outside 
of the usual ranges for: (i) the Two-year Overall Operating Ratio, 
which is a combination of a two-year combined ratio minus a two-year 
investment income ratio; (ii) the Change in Surplus which measures 
the improvement or deterioration in a company's financial condition 
during the year; (iii) the Ratio of Liabilities to Liquid Assets 
which measures the liquidity of a company; and (iv) the Two-Year 
Reserve Development to Surplus Ratio which measures the change in 
prior years' estimates calculated as a percentage of policyholders' 
surplus two years previous.  Significant additions to prior years' 
losses for asbestos bodily injury and environmental liability claims 
and the redeployment of capital by Aetna Life and Casualty Company 
from another of its subsidiaries to AC&S caused certain of the ratios 
described above to fall outside of the usual ranges.  The regulators 
were satisfied, after analysis, that AC&S did not warrant special 
attention.

Management expects that certain of the company's significant 
subsidiaries will have more than two IRIS ratios outside of the NAIC 
usual ranges for 1994.

c.   Ratios of Earnings to Fixed Charges and Earnings to Combined
     Fixed Charges and Preferred Stock Dividends

The following table sets forth Aetna's ratio of earnings to fixed 
charges and ratio of earnings to combined fixed charges and preferred 
stock dividends for the years ended December 31:

<TABLE>
<CAPTION>

(Millions)                             1994        1993       1992      1991      1990
                                       ____        ____       ____      ____      ____
<S>                                    <C>         <C>        <C>       <C>       <C>

Ratio of Earnings to Fixed Charges     4.60        (a)        .42 (b)   2.13      3.03
Ratio of Earnings to Combined Fixed
  Charges and Preferred Stock
  Dividends                            4.60        (a)        .42 (b)   2.13      3.03

<FN>

(a) Aetna reported a pretax loss from continuing operations in 1993 which was
    inadequate to cover fixed charges by $1.1 billion.

(b) Earnings were inadequate to cover fixed charges by $112.8 million in 1992.

</TABLE>


For purposes of computing both the ratio of earnings to fixed charges 
and the ratio of earnings to combined fixed charges and preferred 
stock dividends, "earnings" represent consolidated earnings from 
continuing operations before income taxes, cumulative effect 
adjustments and extraordinary items plus fixed charges and minority 
interest.  "Fixed charges" consist of interest (and the portion of 
rental expense deemed representative of the interest factor) and 
includes the dividends paid to preferred shareholders of a 
subsidiary.  (See Note 11 of Notes to Financial Statements in the 
Annual Report.)  For the years ended December 31, 1994, 1993, 1992, 
1991 and 1990 there was no preferred stock outstanding.  As a result, 
the ratios of earnings to combined fixed charges and preferred stock 
dividends were the same as the ratios of earnings to fixed charges.


<PAGE> 31

d.   Miscellaneous

Aetna had approximately 40,900 domestic employees at December 31, 
1994.

Management believes that the company's computer facilities, 
systems and related procedures are adequate to meet its business 
needs.  The company's data processing systems and backup and 
security policies, practices and procedures are regularly 
evaluated by the company's management and its internal auditors 
and are modified as considered necessary.

Portions of Aetna's insurance business are seasonal in nature.  
Reported claims under group health and certain property-casualty 
products are generally higher in the first quarter.  Sales, 
particularly of individual life products, are generally lowest in 
the first quarter and highest in the fourth quarter.

No customer accounted for 10% or more of Aetna's consolidated 
revenues in 1994.  In addition, no segment of Aetna's business is 
dependent upon a single customer or a few customers, the loss of 
which would have a significant effect on the segment.  See Note 15 
of Notes to Financial Statements regarding segment information in 
the Annual Report.

The loss of business from any one, or a few, independent brokers 
or agents would not have a material adverse effect on the company 
or any of its segments.  In general, the company is not 
contractually obligated or committed to accept a fixed portion of 
business submitted by any of its property-casualty agents or 
brokers.  The company generally reviews all of its policy 
applications, both new and renewal, for approval and acceptance.  
There are cases where the company has delegated limited 
underwriting authority to select agents generally for smaller 
business for specific classes of risks.  The risks accepted by the 
company under these conditions are reviewed by company 
underwriters.  This authority generally can be rescinded at any 
time at the discretion of the company and without prior notice to 
the agents.

Item 2.  Properties.

The home office of Aetna, owned by Aetna Life Insurance Company, 
is a building complex located at 151 Farmington Avenue, Hartford, 
Connecticut, with approximately 1.6 million square feet.  The 
company also owns or leases other space in the greater Hartford 
area as well as various field locations throughout the country.  
The company vacated certain of these facilities in 1994.  (Please 
see MD&A - Overview in the Annual Report.)

The foregoing does not include numerous investment properties held 
by Aetna in its general and separate accounts.


<PAGE> 32

Item 3.  Legal Proceedings.

In Re:  Stepak v. Aetna Life and Casualty Company, et al.

On October 22, 1990, a shareholder filed a lawsuit in United 
States District Court for the District of Connecticut ("District 
Court").  The suit, which was filed on behalf of a class of 
company shareholders, named as defendants Aetna Life and Casualty 
Company and certain present and former officers and directors 
thereof.

The suit alleges that the defendants fraudulently and in violation 
of federal securities laws failed, among other things, to 
adequately disclose alleged deterioration in the value of mortgage 
loan and real estate investment portfolios and that the plaintiff, 
acting in reliance upon such allegedly misleading public 
statements, purchased Aetna Life and Casualty Company common stock 
at artificially inflated prices.  The suit seeks certification of 
the class and compensatory and punitive damages.

In November 1990, the plaintiff filed an amended complaint.  The 
defendants moved to have the amended complaint dismissed.  The 
plaintiff subsequently filed a second amended complaint, and in 
August 1991 the District Court denied the defendants' motion to 
dismiss this complaint.  In the interim, the plaintiff dropped all 
but two of the original individual defendants.  Subsequently, a 
class was conditionally certified composed of purchasers of Aetna 
common stock during the period from February 16, 1989 through 
November 13, 1990, with some exceptions.

Aetna answered the complaint, denying all substantive averments, 
and the parties engaged in substantial discovery.  On August 29, 
1994, the District Court granted the defendants' motion for 
summary judgment and on September 8, 1994, entered a final 
judgment in favor of all defendants.  The plaintiff has filed an 
appeal from that judgment to the United States Court of Appeals 
for the Second Circuit.  Aetna believes that the suit is supported 
neither as a matter of fact nor as a matter of law and, with the 
other defendants, will continue to contest vigorously the 
litigation.


<PAGE> 33

In Re:  Attorneys General Antitrust Litigation

The description of this litigation is contained in Note 19 of Notes 
to Financial Statements in the Annual Report and is incorporated 
herein by reference.

Other Litigation

Aetna is continuously involved in numerous other lawsuits arising, 
for the most part, in the ordinary course of its business operations 
either as a liability insurer defending third-party claims brought 
against its insureds or as an insurer defending coverage claims 
brought against itself, including lawsuits related to issues of 
policy coverage and judicial interpretation.  One such area of 
coverage litigation involves legal liability for environmental and 
asbestos-related claims.  These lawsuits and other factors make 
reserving for these claims subject to significant uncertainties.  See 
MD&A - Property-Casualty Reserves in the Annual Report.

While the ultimate outcome of the litigation described herein 
cannot be determined at this time, such litigation (other than 
that related to environmental and asbestos-related claims, which 
is subject to significant uncertainties), net of reserves 
established therefor and giving effect to reinsurance probable of 
recovery, is not expected to result in judgments for amounts 
material to the financial condition of the company, although it 
may adversely affect results of operations in future periods.  The 
company is expected to be affected adversely in the future by 
losses for environmental and asbestos-related claims and related 
litigation expenses and such effect could be material to the 
company's future results, liquidity and/or capital resources.

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

None.



<PAGE> 34

EXECUTIVE OFFICERS OF AETNA LIFE AND CASUALTY COMPANY*

The Chairman of Aetna Life and Casualty Company is elected and all 
other executive officers listed below are appointed by the Board 
of Directors of the company at its Annual Meeting each year to 
hold office until the next Annual Meeting of the Board or until 
their successors are elected or appointed.  None of these officers 
have family relationships with any other executive officer or 
Director.

<TABLE>

<CAPTION>
                                                                    Business Experience
Name of Officer           Principal Position             Age *      During Past Five Years
_______________           __________________             ___        ______________________

<S>                       <C>                            <C>        <C>

Ronald E. Compton         Chairman and President         62          (1)

Richard L. Huber          Vice Chairman for
                          Strategy and Finance           58          (2)

Zoe Baird                 Senior Vice President and
                          General Counsel                42          (3)

Gary G. Benanav           Executive Vice President,
                          Property/Casualty**            49          (4)

Mary Ann Champlin         Senior Vice President,
                          Human Resources                47          (5)

Daniel P. Kearney         Executive Vice President,
                          Investments/Financial 
                          Services**                     55          (6)

James W. McLane           Executive Vice President,
                          Health/Group Life**            56          (7)

Vanda B. McMurtry         Senior Vice President,
                          Federal Government Relations   45          (8)

Robert E. Broatch         Senior Vice President,
                          Finance, and Corporate
                          Controller                     46          (9)

Brian E. Scott            Vice President and       
                          Senior Corporate Actuary       58         (10)

<FN>

*   As of March 1, 1995.

**  Executive Vice Presidents, in conjunction with certain other senior
    officers, are responsible for assisting the Chairman and Vice Chairman
    in setting policy and overall direction for the company.  In addition,
    each Executive Vice President is responsible for overseeing key initiatives
    and business decisions of the following businesses:
       Mr. Benanav -- property-casualty and international;
       Mr. Kearney -- investments, large case pensions and ALIAC;
       Mr. McLane  -- Aetna Health Plans.

</TABLE>


<PAGE> 35

(1)
Mr. Compton has served as Chairman since March 1, 1992.  He is 
also President, a position he has held since July 1988.

(2)
Mr. Huber has served in his current position since February 1995.  
From September 1994 to February 1995, he served as President and 
Chief Operating Officer of Grupo Wasserstein Perella.  From 1990 
to September 1994, he served as Vice Chairman of Continental Bank.  
From 1988 to 1990, he served as Executive Vice President and Head 
of Capital Markets and Foreign Exchange Sector, Chase Manhattan 
Bank.

(3)
Ms. Baird has served in her current position since April 1992.  
From July 1990 to April 1992 she served as Vice President and 
General Counsel.  From 1986 to July 1990 she was with General 
Electric Company, Fairfield, Connecticut, most recently as 
Counselor and Staff Executive.

(4)
Mr. Benanav has served in his current position since December 
1993.  From April 1992 to December 1993 he served as Group 
Executive responsible for International, individual life 
insurance, annuities, mutual funds, and small case pensions.  From 
April 1990 through April 1992, he served as Senior Vice President, 
International Insurance.  From August 1989 until April 1990, he 
served as Vice President, International Insurance Division.

(5)
Mrs. Champlin has served in her current position since November 
1992.  From February 1991 through November 1992 she served as Vice 
President, Aetna Human Resources.  From June 1989 through January 
1991 she served as Assistant Vice President, Corporate Management, 
Office of the Chairman.

(6)
Mr. Kearney has served in his current position since December 
1993.  From February 1991 to December 1993 he served as Group 
Executive responsible for investments and large case pensions.  
From 1990 to February 1991 he served as the principal of Daniel P. 
Kearney, Inc.  From 1989 to 1990 he served as President and Chief 
Executive Officer of the Oversight Board of the Resolution Trust 
Corporation.

(7)
Mr. McLane has served in his current position since December 1993.  
From April 1992 to December 1993, he served as Group Executive 
responsible for group health and life insurance including managed 
care operations.  From February 1991 through April 1992 he served 
as Chief Executive Officer, Aetna Health Plans; from 1985 through 
1991 he served as Senior Vice President, Global Insurance 
Division, Citicorp.


<PAGE> 36

(8)
Mr. McMurtry has served in his current position since November 
1992.  From February 1989 through November 1992 he served as Staff 
Director and Chief Counsel, Committee on Finance, United States 
Senate.

(9)
Mr. Broatch has served in his current position since December 
1993.  From May 1988 to December 1993, he served as Vice President 
and Corporate Controller.

(10)
Mr. Scott has served in his current position since November 1991.  
From April 1991 until November 1991, he served as Vice President, 
Standard Commercial Accounts.  From October 1988 through April 
1991, he served as Vice President, Standard Markets Department, 
Commercial Insurance Division.


<PAGE> 37

PART II

Item 5.  Market for Registrant's Common Equity
         and Related Stockholder Matters.

Aetna Life and Casualty Company's common stock is listed on the 
New York and Pacific Stock Exchanges, with unlisted trading 
privileges on other regional exchanges.  Its symbol is AET.  The 
common stock also is listed on the Swiss Stock Exchanges at Basel, 
Geneva and Zurich.  Call and put options on the common stock are 
traded on the American Stock Exchange.  As of February 28, 1995, 
there were 25,429 record holders of the common stock.

The dividends declared and the high and low sales prices with 
respect to Aetna Life and Casualty Company's common stock for each 
quarterly period for the past two years are incorporated herein by 
reference from "Quarterly Data" in the Annual Report.

Information regarding restrictions on the company's present and 
future ability to pay dividends is incorporated herein by 
reference from Note 8 of Notes to Financial Statements in the 
Annual Report.

Item 6.  Selected Financial Data.

The information contained in "Selected Financial Data" in the 
Annual Report is incorporated herein by reference.

Item 7.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.

The information contained in "Management's Discussion and Analysis 
of Financial Condition and Results of Operations" in the Annual 
Report is incorporated herein by reference.

Item 8.  Financial Statements and Supplementary Data.

The 1994 Consolidated Financial Statements and the report of the 
registrant's independent auditors and the unaudited information 
set forth under the caption "Quarterly Data" is incorporated 
herein by reference to the Annual Report.

Item 9.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure.

None.



<PAGE> 38

PART III

Item 10.  Directors and Executive Officers of the Registrant.

Information concerning Executive Officers is included in Part I 
pursuant to General Instruction G to Form 10-K.

Information concerning Directors and concerning compliance with 
Section 16 (a) of the Securities Exchange Act of 1934 is 
incorporated herein by reference to the Proxy Statement.

Item 11.  Executive Compensation.

The information under the caption "Executive Compensation" in the 
Proxy Statement is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners
          and Management.

The information under the caption "Security Ownership of Certain 
Beneficial Owners, Directors, Nominees and Executive Officers" in 
the Proxy Statement is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions.

The information under the caption "Certain Transactions and 
Relationships" in the Proxy Statement is incorporated herein by 
reference.

PART IV 

Item 14.  Exhibits, Financial Statement Schedules
          and Reports on Form 8-K.

(a)  The following documents are filed as part of this report:

1.  Financial statements:

The Consolidated Financial Statements and the report of the 
registrant's independent auditors are incorporated herein by 
reference to the Annual Report.

2.  Financial statement schedules:

The supporting schedules of the consolidated entity are included 
in this Item 14.  See Index to Financial Statement Schedules on 
page 42.


<PAGE> 39

3.  Exhibits: *

(3)  Articles of Incorporation and By-Laws.

Certificate of Incorporation of Aetna Life and Casualty Company, 
incorporated herein by reference to the company's 1992 Form 10-K, 
filed on March 17, 1993 (the "1992 Form 10-K").

By-Laws of Aetna Life and Casualty Company, incorporated by 
reference to the company's 1993 Form 10-K filed on March 18, 1994 
(the "1993 Form 10-K").

(4)  Instruments defining the rights of security holders,
     including indentures.

Conformed copy of Indenture, dated as of October 15, 1977, between 
Aetna Life and Casualty Company and Morgan Guaranty Trust Company 
of New York, Trustee, incorporated herein by reference to the 1992 
Form 10-K.

Conformed copy of Indenture, dated as of October 15, 1986, between 
Aetna Life and Casualty Company and The First National Bank of 
Boston, Trustee, incorporated herein by reference to the 1992 Form 
10-K.

Conformed copy of Indenture, dated as of August 1, 1993, between 
Aetna Life and Casualty Company and State Street Bank and Trust 
Company of Connecticut, National Association, as Trustee, 
incorporated herein by reference to the company's Registration 
Statement on Form S-3 (File No. 33-50427).

Conformed copy of Rights Agreement dated as of October 27, 1989, 
between Aetna Life and Casualty Company and First Chicago Trust 
Company of New York, incorporated herein by reference to the 1992 
Form 10-K.

Conformed copy of Summary of Rights to Purchase Preferred Stock, 
incorporated herein by reference to the 1992 Form 10-K.

Conformed copy of Written Action dated as of November 15, 1994, 
establishing the terms of Series A Preferred Securities of Aetna 
Capital L.L.C., incorporated herein by reference to the company's 
Form 8-K filed on November 22, 1994.

Conformed copy of Subordinated Indenture dated as of November 1, 
1994, between the company and The First National Bank of Chicago, 
as Trustee, incorporated herein by reference to the company's Form 
8-K filed on November 22, 1994.

Conformed copy of Payment and Guarantee Agreement dated November 
22, 1994, of the company with respect to Aetna Capital L.L.C., 
incorporated herein by reference to the company's Form 8-K filed 
on November 22, 1994.

(10)  Material contracts.

The 1984 Stock Option Plan of Aetna Life and Casualty Company and 
amendments thereto, incorporated herein by reference to the 1992 
Form 10-K. **

Aetna Life and Casualty Company's Supplemental Incentive Savings 
Plan, incorporated herein by reference to the 1992 Form 10-K. **

Aetna Life and Casualty Company's Supplemental Pension Benefit 
Plan, incorporated herein by reference to the 1992 Form 10-K. **


<PAGE> 40

Aetna Life and Casualty Company's 1986 Management Incentive Plan, 
as amended effective February 25, 1994, incorporated herein by 
reference to the 1993 Form 10-K. **

Aetna Life and Casualty Company Directors' Deferred Compensation 
Plan, incorporated herein by reference to the 1992 Form 10-K. **

Aetna Life and Casualty Company 1994 Non-Employee Director 
Deferred Stock Plan, incorporated herein by reference to the 
company's 1994 proxy statement, filed on March 18, 1994 (the "1994 
Proxy Statement"). **

Aetna Life and Casualty Company 1994 Stock Incentive Plan, 
incorporated herein by reference to the 1994 Proxy Statement. **

Letter Agreement, dated December 18, 1993, between Aetna Life and 
Casualty Company and David A. Kocher, incorporated herein by 
reference to the 1993 Form 10-K. **

Letter Agreement, dated September 20, 1994, between Aetna Life and 
Casualty Company and Patrick W. Kenny, incorporated by reference 
to the company's Form 10-Q filed on October 28, 1994. **

The Aetna Life and Casualty Company 1990 Non-Employee Director 
Deferred Stock Plan, incorporated herein by reference to the 1992 
Form 10-K. **

$500,000,000 Short-Term Credit Agreement dated as of July 27, 1994 
among Aetna Life and Casualty Company, the banks listed on the 
signature pages thereof, Morgan Guaranty Trust Company of New 
York, as Managing Agent, Deutsche Bank AG, as Co-Arranger, and The 
Chase Manhattan Bank, N.A., Citibank, N.A., and Credit Suisse, as 
Co-Agents, incorporated by reference to the company's Form 10-Q 
filed on August 15, 1994 (the "1994 Second Quarter Form 10-Q").

$500,000,000 Medium-Term Credit Agreement dated as of July 27, 1994 
among Aetna Life and Casualty Company, the banks listed on the 
signature pages thereof, Morgan Guaranty Trust Company of New York, 
as Managing Agent, Deutsche Bank AG, as Co-Arranger, and The Chase 
Manhattan Bank, N.A., Citibank, N.A., and Credit Suisse, as Co-
Agents, incorporated by reference to the 1994 Second Quarter Form 
10-Q.

Description of certain arrangements not embodied in formal 
documents, as described with respect to Directors' fees and 
benefits, and under the caption "Executive Compensation," are 
incorporated herein by reference to the Proxy Statement.

(11)  Statement re computation of per share earnings.

Incorporated herein by reference to Note 1 of Notes to Financial 
Statements in the Annual Report.

(12)  Statement re computation of ratios.

Statement re:  computation of ratio of earnings to fixed charges.

Statement re:  computation of ratio of earnings to combined fixed 
charges and preferred stock dividends.

(13)  Annual Report to security holders.

Selected Financial Data, Management's Discussion and Analysis of 
Financial Condition and Results of Operations, Consolidated 
Financial Statements and the report of the company's independent 
auditors, and unaudited Quarterly Data from the Annual Report.

<PAGE> 41

(21)  Subsidiaries of the registrant.

A listing of subsidiaries of Aetna Life and Casualty Company.

(23)  Consents of experts and counsel.

Consent of Independent Auditors to Incorporation by Reference in 
the Registration Statements on Form S-3 and Form S-8.

(24)  Powers of attorney.

(27)  Financial data schedule.

(28)  Information from reports furnished to state insurance
      regulatory authorities.

1994 Consolidated Schedule P of Annual Statements provided to 
state regulatory authorities. ***

(b)  Reports on Form 8-K

The company filed a report on Form 8-K filed on October 4, 1994, 
relating to the lowering, by certain of the rating agencies, of 
the senior debt and commercial paper ratings of Aetna Life and 
Casualty Company and the claims paying ratings of certain of its 
subsidiaries.

The company filed a report on Form 8-K filed on November 7, 1994, 
relating to the lowering by A.M. Best of the claims paying rating 
of The Aetna Casualty and Surety Company.

The company filed a report on Form 8-K filed on November 14, 1994, 
relating to the lowering by Duff & Phelps of the claims paying 
ratings of certain of Aetna Life and Casualty Company's 
subsidiaries.

The company filed a report on Form 8-K filed on November 22, 1994, 
relating to a pricing agreement with certain underwriters to offer 
and sell $275 million of Aetna Capital L.L.C.'s, a subsidiary of 
the company, 9 1/2% Cumulative Monthly Income Preferred 
Securities, Series A guaranteed by the company.


*   Exhibits other than those listed are omitted because they are 
    not required or are not applicable.  Copies of exhibits are 
    available without charge by writing to the Office of the 
    Corporate Secretary, Aetna Life and Casualty Company, 
    151 Farmington Avenue, Hartford, Connecticut  06156.

**  Management contract or compensatory plan or arrangement.

*** Filed under cover of Form SE.


<PAGE> 42

INDEX TO FINANCIAL STATEMENT SCHEDULES

AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES


                                                         Page
                                                         ____

Independent Auditors' Report........................      43

   I  Summary of Investments - Other than 
      Investments in Affiliates as 
      of December 31, 1994..........................      44

 III  Condensed Financial Information of the 
      Registrant as of December 31, 1994 and 
      1993 and for the years ended December 31,
      1994, 1993 and 1992...........................      45

   V  Supplementary Insurance Information as of 
      and for the years ended December 31, 1994,
      1993 and 1992.................................      51

VIII  Valuation and Qualifying Accounts and Reserves
      for the years ended December 31, 1994, 1993
      and 1992......................................      54

  IX  Short-term Borrowings for the years ended 
      December 31, 1994, 1993 and 1992..............      55

   X  Supplemental Information Concerning 
      Property-Casualty Operations for the years
      ended December 31, 1994, 1993 and 1992........      56


Schedules other than those listed above are omitted because they 
are not required or are not applicable, or the required 
information is shown in the Financial Statements or Notes thereto 
in the Annual Report.  Columns omitted from schedules filed have 
been omitted because the information is not applicable.

Certain reclassifications have been made to 1993 and 1992 
financial information to conform to 1994 presentation.



<PAGE> 43

                   INDEPENDENT AUDITORS' REPORT
                   ____________________________


The Shareholders and Board of Directors
Aetna Life and Casualty Company:


Under date of February 7, 1995, we reported on the consolidated 
balance sheets of Aetna Life and Casualty Company and Subsidiaries 
as of December 31, 1994 and 1993, and the related consolidated 
statements of income, shareholders' equity, and cash flows for 
each of the years in the three-year period ended December 31, 
1994, as contained in the 1994 annual report to shareholders.  
These consolidated financial statements and our report thereon are 
incorporated by reference in the annual report on Form 10-K for 
the year 1994.  In connection with our audits of the 
aforementioned consolidated financial statements, we also have 
audited the related financial statement schedules as listed in the 
accompanying index.  These financial statement schedules are the 
responsibility of the company's management.  Our responsibility is 
to express an opinion on these financial statement schedules based 
on our audits.

In our opinion, such financial statement schedules, when 
considered in relation to the basic consolidated financial 
statements taken as a whole, present fairly, in all material 
respects, the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, 
in 1993 the company changed its methods of accounting for certain 
investments in debt and equity securities, reinsurance of short-
duration and long-duration contracts, postemployment benefits, 
workers' compensation life table indemnity reserves and 
retrospectively rated reinsurance contracts.  In 1992, the company 
changed its methods of accounting for income taxes and 
postretirement benefits other than pensions.


                             By  /s/ KPMG Peat Marwick LLP 
                                 __________________________
                                    (Signature)

                                     KPMG Peat Marwick LLP


Hartford, Connecticut
February 7, 1995


<PAGE> 44

            AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                              SCHEDULE I

     Summary of Investments - Other than Investments in Affiliates

                        As of December 31, 1994

<TABLE>

<CAPTION>
                                                                          Amount
                                                                        at which
                                                                    shown in the
Type of Investment                           Cost        Value*    balance sheet
(Millions)                             __________    __________    _____________

<S>                                    <C>          <C>                <C>

Debt securities:
   Bonds:
     United States Government
       and government agencies
       and authorities.............    $ 8,321.5    $ 7,652.8          $ 7,652.8
     States, municipalities and 
       political subdivisions......      2,000.3      1,933.9            1,941.7
     Foreign (1)...................      1,739.2      1,685.5            1,685.5
     Public utilities..............      2,821.0      2,630.8            2,628.3
     Financial.....................      4,776.5      4,567.8            4,675.7
     Transportation/Capital goods..      2,993.0      2,992.8            2,883.3
     Mortgage-backed securities....      7,065.2      6,759.9            6,772.8
     Other loan-backed securities..      1,706.1      1,649.4            1,649.4
     Food and fiber................        801.5        767.1              739.9
     Natural resources and services      1,038.1      1,038.1            1,037.9
     All other corporate bonds.....      5,640.9      5,342.3            5,362.7
                                       _________    _________          _________

       Total bonds.................     38,903.3     37,020.4           37,030.0

   Redeemable preferred stocks.....         81.7         81.5               81.5
                                       _________    _________          _________

       Total debt securities.......     38,985.0    $37,101.9           37,111.5
                                       _________    _________          _________
                                                    _________


Equity securities:
   Common stocks:
     Public utilities..............         84.6    $    83.6               83.6
     Banks, trust and insurance
       companies...................         86.1        178.4              178.4
     Industrial, miscellaneous
       and all other...............      1,074.7      1,282.1            1,282.1
                                       _________    _________          _________

       Total common stocks.........      1,245.4      1,544.1            1,544.1
   Non-redeemable preferred 
     stocks........................        107.7        111.5              111.5
                                       _________    _________          _________

       Total equity securities.....      1,353.1    $ 1,655.6            1,655.6
                                       _________    _________          _________
                                                    _________


Short-term investments.............        450.4                           450.4
Mortgage loans.....................     11,843.6                        11,843.6
Real estate........................      1,545.7                         1,545.7
Policy loans.......................        533.8                           533.8
Other..............................        936.8 (2)                     1,152.7 (3)
                                       _________                       _________

       Total investments...........    $55,648.4                       $54,293.3
                                       _________                       _________
                                       _________                       _________
________________________
<FN>

*   See Notes 1 and 5 of Notes to Financial Statements in the company's
    1994 Annual Report.

(1) The term "foreign" includes foreign governments, foreign political
    subdivisions, foreign public utilities and all other bonds of foreign issuers.

(2) Excludes investments in affiliates of $215.9 million.

(3) Includes investments in affiliates of $215.9 million.

</TABLE>


<PAGE> 45

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                           SCHEDULE III

                 Condensed Financial Information


                 AETNA LIFE AND CASUALTY COMPANY

                       Statements of Income

<TABLE>

<CAPTION>

For the years ended December 31,
                                         1994         1993         1992
                                         ____         ____         ____
(Millions)

<S>                                      <C>          <C>          <C>

Premiums...............................  $     -      $   1.3      $     .9
Net investment income (expense)........     (7.9)        (7.9)        (18.2)
Net realized capital gains (losses)....     (7.9)       (22.1)          5.7
                                         _______      _______      ________

       Total revenue...................    (15.8)       (28.7)        (11.6)

Current and future benefits............        -           .8            .2
Operating expenses.....................     31.8         43.1          30.3
Severance and facilities charge........        -         50.3          22.1
Interest expense.......................     92.5         70.1          76.9
                                         _______      _______      ________

       Total benefits and expenses.....    124.3        164.3         129.5
                                         _______      _______      ________

Insurance operating losses before
 federal income taxes and equity
 in earnings of affiliates.............   (140.1)      (193.0)       (141.1)
Federal income tax benefits:
  Current..............................    (23.3)       (53.4)        (35.5)
  Deferred.............................    (29.4)       (45.6)        (15.7)
Equity in earnings (losses) of
 affiliates............................    554.9       (521.3)         84.6
                                         _______      _______      ________

Income (Loss) from continuing
 operations before extraordinary item
 and cumulative effect adjustments.....    467.5       (615.3)         (5.3)

Discontinued operations, net of tax:
  Income from operations...............        -            -          86.8
  Gain on sale.........................        -         27.0          38.1
  Cumulative effect adjustments........        -            -          48.9
                                         _______      _______      ________

Income (Loss) before extraordinary item
 and cumulative effect adjustments for
 continuing operations.................    467.5       (588.3)        168.5
Extraordinary loss on debenture
 redemption, net of tax................        -         (4.7)            -
Cumulative effect adjustments for
 continuing operations.................        -        227.1 (1)    (112.5) (2)
                                         _______      _______      ________

Net income (loss)....................... $ 467.5      $(365.9)     $   56.0
                                         _______      _______      ________
                                         _______      _______      ________

________________________

<FN>

(1) The amount of the cumulative effect adjustment applicable to affiliates
    is $276.3 million.

(2) The amount of the cumulative effect adjustment applicable to affiliates
    is $285.4 million.

See Notes to Condensed Financial Statements.

</TABLE>


<PAGE> 46

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                           SCHEDULE III

                 Condensed Financial Information

                 AETNA LIFE AND CASUALTY COMPANY

                          Balance Sheets

<TABLE>
<CAPTION>

As of December 31,
                                               1994          1993
                                               ____          ____
(Millions, except share data)
<S>                                            <C>           <C>
         ASSETS

Investments:
   Debt securities, available for sale
    at fair value (cost of $3.8)...........   $    3.8       $       -
   Equity securities, at market
     (cost $18.3 and $5.6).................       14.8             1.6
   Short-term investments..................       22.5            83.3
   Other...................................       10.9            10.5
   Investments in affiliates:
     Insurance and financial services
       companies...........................    6,815.8         7,916.4
     International insurance and
       financial services companies........      644.6           636.4
                                              ________       _________
         Total investments.................    7,512.4         8,648.2
Cash and cash equivalents..................          -             5.8
Premiums due and other receivables.........        2.5             2.5
Due from affiliates........................      179.3           165.5
Accrued investment income..................        1.6             1.3
Deferred federal income taxes..............      306.6           263.8
Other assets...............................       32.8            39.4
                                              ________       _________
         Total assets......................   $8,035.2       $ 9,126.5
                                              ________       _________
                                              ________       _________

         LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
   Insurance reserve liabilities...........   $     .6      $       .5
   Dividends payable to shareholders.......       77.7            77.4
   Long-term debt..........................    1,058.2         1,057.6
   Other liabilities.......................      127.2           154.6
   Liability for postretirement
    benefits other than pensions...........      624.1           638.9
   Due to affiliates.......................      513.1           149.0
   Federal income taxes payable............      131.3             5.4
                                              ________       _________
         Total liabilities.................    2,532.2         2,083.4
                                              ________       _________

Shareholders' Equity:
   Class A Voting Preferred Stock
    (no par value; 10,000,000 shares 
    authorized; no shares issued or 
    outstanding)                                     -               -
   Class B Voting Preferred Stock
    (no par value; 15,000,000 shares 
    authorized; no shares issued or 
    outstanding)                                     -               -
   Class C Non-voting Preferred Stock
    (no par value; 15,000,000 shares 
    authorized; no shares issued or 
    outstanding)                                     -               -
   Common stock (No par value; 250,000,000
     shares authorized; 114,939,275 issued;
     and 112,657,758 and 112,200,567
     outstanding)..........................    1,419.2         1,422.0
   Net unrealized capital gains (losses)...   (1,071.5)          648.2
   Retained earnings.......................    5,259.6         5,103.3
   Treasury stock, at cost.................     (104.3)         (130.4)
       Total shareholders' equity..........    5,503.0         7,043.1
                                              ________       _________

         Total.............................   $8,035.2       $ 9,126.5
                                              ________       _________
                                              ________       _________
________________________
<FN>
See Notes to Condensed Financial Statements.
</TABLE>


<PAGE> 47

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                           SCHEDULE III

                 Condensed Financial Information

                 AETNA LIFE AND CASUALTY COMPANY

                Statements of Shareholders' Equity

<TABLE>

<CAPTION>
                                                                            Net
                                                                     Unrealized
Three years ended December 31, 1994                     Common          Capital     Retained   Treasury
(Millions, except share data)                Total       Stock   Gains (Losses)     Earnings      Stock    
___________________________________________________________________________________________________________

<S>                                          <C>         <C>         <C>            <C>           <C>

Balances at December 31, 1991                $ 7,384.5   $ 1,420.1   $   165.9      $ 6,026.0     $  (227.5)
___________________________________________________________________________________________________________
Net income..............................          56.0                                   56.0
Net change in unrealized capital gains
  and losses............................          93.7                    93.7
Common stock issued for benefit plans
  (205,848 shares)......................          10.6                                                 10.6
Loss on issuance of treasury stock......          (2.4)       (2.4)
Common stock dividends declared.........        (304.1)                                (304.1)             
                                             ______________________________________________________________
Balances at December 31, 1992                $ 7,238.3   $ 1,417.7   $   259.6      $ 5,777.9     $  (216.9)
___________________________________________________________________________________________________________
Net income..............................        (365.9)                                (365.9)
Net change in unrealized capital gains
  and losses............................         388.6                   388.6
Common stock issued for benefit plans
  (1,930,085 shares)....................          86.5                                                 86.5
Loss on issuance of treasury stock......           4.3         4.3
Common stock dividends declared.........        (308.7)                                (308.7)             
                                             ______________________________________________________________
Balances at December 31, 1993                $ 7,043.1   $ 1,422.0   $   648.2 (1)  $ 5,103.3     $  (130.4)
___________________________________________________________________________________________________________
Net income..............................         467.5                                  467.5
Net change in unrealized capital gains
  and losses............................      (1,719.7)               (1,719.7)
Common stock issued for benefit plans
  (457,191 shares)......................          26.1                                                 26.1
Loss on issuance of treasury stock......          (2.8)       (2.8)
Common stock dividends declared.........        (311.2)                                (311.2)             
                                             ______________________________________________________________
Balances at December 31, 1994                $ 5,503.0   $ 1,419.2   $(1,071.5) (1) $ 5,259.6     $  (104.3)
___________________________________________________________________________________________________________

<FN>

See Notes to Condensed Financial Statements.

(1) Excludes unrealized capital gains and losses attributable to assets supporting
    discontinued products and to assets supporting experience rated contracts.

</TABLE>


<PAGE> 48

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                           SCHEDULE III

                  Condensed Financial Information

                  AETNA LIFE AND CASUALTY COMPANY

                     Statements of Cash Flows

<TABLE>
<CAPTION>
For the years ended December 31,
                                                    1994       1993         1992
(Millions)                                          ____       ____         ____
<S>                                                 <C>        <C>          <C>
Cash Flows from Operating Activities:
   Net income (loss).............................   $ 467.5    $(365.9)     $  56.0
   Adjustments to reconcile net income (loss)
    to net cash (used for) provided by
    operating activities:
     Cumulative effect adjustments...............         -     (227.1)       112.5
     Extraordinary loss on debenture redemption..         -        4.7            -
     Discontinued operations.....................         -      (27.0)       (86.8)
     Cumulative effect of discontinued operations         -          -        (48.9)
     (Increase) Decrease in premiums due and
      other receivables..........................     (12.3)       5.0        (41.7)
     (Increase) Decrease in accrued investment
      income.....................................      (0.3)       0.3         (3.1)
     Depreciation and amortization...............       0.1          -          0.1
     Increase (Decrease) in federal income taxes       83.1      (58.6)        73.3
     Net (decrease) increase in other assets
      and other liabilities......................     (19.7)      38.3        110.2
     Increase in insurance reserve
      liabilities................................       0.1        0.1          0.3
     Equity in (earnings) losses of affiliates...    (554.9)     521.3        (84.6)
     Gain on sale of subsidiaries................         -      (15.0)       (38.1)
     Net realized capital (gains) losses.........       7.9       22.1         (5.7)
     Amortization of net investment discounts....      (0.2)      (0.2)        (0.2)
     Other, net..................................     (90.6)    (118.2)        65.8
                                                    _______    _______      _______
       Net cash (used for)  provided by
        operating activities.....................    (119.3)    (220.2)       109.1
                                                    _______    _______      _______
Cash Flows from Investing Activities:
 Proceeds from sales of:
   Equity securities.............................       1.1          -            -
   Short-term investments........................   1,200.3    1,591.3      2,479.8
 Cost of investments in:
   Debt securities available for sale............      (3.8)         -            -
   Equity securities.............................     (21.8)     (26.3)        (2.9)
   Short-term investments........................  (1,139.6)  (1,591.5)    (2,538.6)
   Real estate...................................      (1.0)      (0.5)        (1.8)
 Proceeds from disposal of subsidiaries..........         -       93.1            -
 Investment in and advances from subsidiaries....      13.4     (631.3)       220.4
 Dividends received from affiliates..............         -      302.1        250.0
 Other, net......................................       4.0      366.0        (72.9)
                                                    _______    _______      _______
   Net cash provided by investing activities.....      52.6      102.9        334.0
                                                    _______    _______      _______
Cash Flows from Financing Activities:
   Issuance of long-term debt....................        .6      600.0            -
   Issuance of subordinated debentures
     to affiliates...............................     348.1          -            -
   Stock issued under benefit plans..............      23.3       90.8          8.2
   Repayment of long-term debt...................         -     (347.2)       (69.9)
   Dividends paid to shareholders................    (311.2)    (308.7)      (304.1)
                                                    _______    _______      _______
     Net cash (used for) provided by
      financing activities.......................      60.8       34.9       (365.8)
                                                    _______    _______      _______
Effect of exchange rate on cash
 and cash equivalents............................       0.1          -            -
                                                    _______    _______      _______
Net (decrease) increase in cash and
 cash equivalents................................      (5.8)     (82.4)        77.3
Cash and cash equivalents, beginning of year.....       5.8       88.2         10.9
                                                    _______    _______      _______
Cash and cash equivalents, end of year...........   $     -    $   5.8      $  88.2
                                                    _______    _______      _______
                                                    _______    _______      _______
Supplemental disclosure of cash flow 
 information:
     Interest paid...............................   $  90.6    $  64.2      $  83.2
                                                    _______    _______      _______
                                                    _______    _______      _______
     Income taxes received, net..................   $ 150.3    $  56.7      $  40.6
                                                    _______    _______      _______
                                                    _______    _______      _______
________________________
<FN>
See Notes to Condensed Financial Statements.
</TABLE>


<PAGE> 49

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                           SCHEDULE III

                  Condensed Financial Information

                  AETNA LIFE AND CASUALTY COMPANY

              Notes to Condensed Financial Statements

The accompanying condensed financial statements should be read in 
conjunction with the Consolidated Financial Statements and Notes 
thereto in the Annual Report.  Certain reclassifications have been 
made to 1993 and 1992 financial information to conform to 1994 
presentation.

1.  Long-Term Debt

<TABLE>
<CAPTION>
(Millions)                                   1994         1993
                                             ____         ____
<S>                                          <C>          <C>
     Long-term debt:
     Eurodollar Notes, 9 1/2% due 1995..     $  100.2     $  100.4
     Notes, 8 5/8% due 1998.............         99.8         99.8
     Notes, 6 3/8% due 2003.............        198.9        198.7
     Debentures, 6 3/4% due 2013........        198.4        198.3
     Eurodollar Notes, 7 3/4% due 2016..         63.5         63.5
     Debentures, 8% due 2017............        199.1        198.6
     Debentures, 7 1/4% due 2023........        198.3        198.3
                                             ________     ________
                                             $1,058.2     $1,057.6
                                             ________     ________
                                             ________     ________
</TABLE>


See Note 9 to the Consolidated Financial Statements in the Annual 
Report for a description of the long-term debt and aggregate 
maturities for 1995 to 1999 and thereafter.


2.  Dividends

The amounts of cash dividends paid to Aetna Life and Casualty 
Company by insurance affiliates for the years ended December 31, 
1994, 1993 and 1992 were as follows:

<TABLE>
<CAPTION>

(Millions)                          1994       1993       1992
                                    ____       ____       ____
<S>                                 <C>        <C>        <C>
Consolidated subsidiaries.....         -       $302.1     $250.0

</TABLE>


See Note 8 to the Consolidated Financial Statements in the Annual 
Report for a description of dividend restrictions from the 
consolidated insurance subsidiaries to the company.


3.  Due to Affiliates

See Note 11 to the Consolidated Financial Statements in the Annual 
Report for a description of amounts due to Aetna Capital L.L.C., a 
subsidiary of the company.


<PAGE> 50

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                           SCHEDULE III

                  Condensed Financial Information

                  AETNA LIFE AND CASUALTY COMPANY

        Notes to Condensed Financial Statements (Continued)

4.  Accounting Changes

See Note 1 to the Consolidated Financial Statements in the Annual 
Report for a description of accounting changes.


5.  Discontinued Products

See Note 2 to the Consolidated Financial Statements in the Annual 
Report for a description of discontinued products.


6.  Sales of Subsidiaries

See Note 3 to the Consolidated Financial Statements in the Annual 
Report for a description of the sales of subsidiaries.


7.  Severance and Facilities Charge

See Note 4 to the Consolidated Financial Statements in the Annual 
Report for a description of the severance and facilities charges.


8.  Federal and Foreign Income Taxes

See Note 10 to the Consolidated Financial Statements in the Annual 
Report for a description of federal and foreign income taxes.


9.  Litigation

See Note 19 to the Consolidated Financial Statements in the Annual 
Report for a description of the Attorneys General Antitrust 
litigation.


<PAGE> 51

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES 

                            SCHEDULE V

                Supplementary Insurance Information

            As of and for the year ended December 31, 1994

<TABLE>

<CAPTION>

                                Deferred                  Unpaid           Policyholders'
                                  policy      Future      claims               funds left
                             acquisition      policy   and claim    Unearned     with the   Premium
Segment                            costs    benefits    expenses    premiums      company   revenue
_______                      ___________   _________   _________   _________  ___________ _________
(Millions)
<S>                         <C>          <C>           <C>           <C>        <C>          <C>

Aetna Health Plans..........$    74.2    $ 2,487.4     $ 1,204.5 (1) $   137.5  $   682.1    $ 5,611.5
Large Case Pensions.........        -      9,916.9           1.5             -   12,548.7        234.4
Aetna Life Insurance
 & Annuity..................  1,147.3      3,281.8          25.3             -    9,106.2        168.3
Property-Casualty...........    316.0            -      16,192.9       1,425.9       46.7      4,390.8
International...............    477.2      2,293.1          54.1          41.5      839.4        887.1
Corporate...................        -            -             -             -          -            -
                            _________    _________     _________     _________  _________    _________

   Total....................$ 2,014.7    $17,979.2     $17,478.3     $ 1,604.9  $23,223.1    $11,292.1
                            _________    _________     _________     _________  _________    _________
                            _________    _________     _________     _________  _________    _________


                                            Other income
                                              (including            Amortization of
                                      Net       realized    Current deferred policy      Other
                               investment  capital gains and future     acquisition  operating  Premiums
Segment                        income (2)    and losses)   benefits           costs   expenses   written (3)
_______                       ___________  _____________ __________      __________ __________ _____________
(Millions)

<S>                             <C>         <C>            <C>           <C>         <C>         <C>
Aetna Health Plans............. $   351.6   $ 1,176.0      $ 4,755.1     $       -   $ 1,845.9   $    83.8
Large Case Pensions............   2,017.4       103.4        2,175.9             -        98.2           -
Aetna Life Insurance
 & Annuity.....................     958.7       277.2          914.4          37.1       217.7           -
Property-Casualty..............     832.1       116.0        3,746.8         647.2       914.1     4,467.1
International..................     308.4       101.5          782.7          65.7       349.8        39.5
Corporate......................      (4.7)       (5.0)          22.2             -       293.6           -
                                _________   _________      _________     _________   _________   _________

     Total..................... $ 4,463.5   $ 1,769.1      $12,397.1     $   750.0   $ 3,719.3   $ 4,590.4
                                _________   _________      _________     _________   _________   _________
                                _________   _________      _________     _________   _________   _________

<FN>

(1) Includes minimal property-casualty business.

(2) The allocation of net investment income is based upon the investment year method
    or specific identification of certain portfolios within specific segments.

(3) Excludes life insurance business pursuant to Regulation S-X.

</TABLE>


<PAGE> 52

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES 

                            SCHEDULE V

                Supplementary Insurance Information

             As of and for the year ended December 31, 1993

<TABLE>

<CAPTION>

                                Deferred                  Unpaid           Policyholders'
                                  policy      Future      claims               funds left
                             acquisition      policy   and claim    Unearned     with the   Premium
Segment                            costs    benefits    expenses    premiums      company   revenue
_______                      ___________   _________   _________   _________  ___________ _________
(Millions)
<S>                         <C>          <C>           <C>           <C>        <C>          <C>

Aetna Health Plans..........$    73.5    $ 2,513.8     $ 1,228.0 (1) $   129.7  $   697.2    $ 4,700.6
Large Case Pensions.........        -     10,027.0           1.2             -   16,318.5        185.9
Aetna Life Insurance
 & Annuity..................  1,042.4      3,075.6          15.4             -    9,207.2        125.7
Property-Casualty...........    329.6         16.9      15,771.5       1,332.5       51.2      4,653.2
International...............    421.5      1,964.3          96.1          40.0    1,318.1        909.5
Corporate...................        -            -             -             -          -            -
                            _________    _________     _________     _________  _________    _________

   Total....................$ 1,867.0    $17,597.6     $17,112.2     $ 1,502.2  $27,592.2    $10,574.9
                            _________    _________     _________     _________  _________    _________
                            _________    _________     _________     _________  _________    _________


                                            Other income
                                              (including            Amortization of
                                      Net       realized    Current deferred policy      Other
                               investment  capital gains and future     acquisition  operating  Premiums
Segment                        income (2)    and losses)   benefits           costs   expenses   written (3)
_______                       ___________  _____________ __________      __________ __________ _____________
(Millions)

<S>                             <C>         <C>            <C>           <C>         <C>         <C>
Aetna Health Plans............. $   376.3   $ 1,029.1      $ 3,989.3     $       -   $ 1,701.8   $    67.0
Large Case Pensions............   2,327.7        52.4        2,428.1             -       142.1           -
Aetna Life Insurance
 & Annuity.....................     962.4       270.3          870.9          38.5       275.7           -
Property-Casualty..............     952.4       295.3        4,214.7         646.2     1,172.7     4,464.7
International..................     311.6        58.2          860.1          51.7       365.3       114.1
Corporate......................     (11.4)        4.5           28.8             -       295.2           -
                                _________   _________      _________     _________   _________   _________

     Total..................... $ 4,919.0   $ 1,709.8      $12,391.9     $   736.4   $ 3,952.8   $ 4,645.8
                                _________   _________      _________     _________   _________   _________
                                _________   _________      _________     _________   _________   _________

<FN>

(1) Includes minimal property-casualty business.

(2) The allocation of net investment income is based upon the investment year method
    or specific identification of certain portfolios within specific segments.

(3) Excludes life insurance business pursuant to Regulation S-X.

</TABLE>


<PAGE> 53

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES 

                            SCHEDULE V

                Supplementary Insurance Information

            As of and for the year ended December 31, 1992

<TABLE>

<CAPTION>

                                Deferred                  Unpaid           Policyholders'
                                  policy      Future      claims               funds left
                             acquisition      policy   and claim    Unearned     with the   Premium
Segment                            costs    benefits    expenses    premiums      company   revenue
_______                      ___________   _________   _________   _________  ___________ _________
(Millions)
<S>                         <C>          <C>           <C>           <C>        <C>          <C>

Aetna Health Plans..........$    57.0    $ 2,543.0     $ 1,074.0 (1) $   107.6  $   644.8    $ 4,586.7
Large Case Pensions.........      1.8      8,741.6           1.8             -   17,595.4        204.2
Aetna Life Insurance
 & Annuity..................    961.6      2,867.4          34.0             -    7,502.1        111.9
Property-Casualty...........    328.6           .2      15,923.0       1,335.0       61.0      5,076.3
International...............    357.0      1,838.2          89.4          45.6    1,466.9        814.8
Corporate...................        -            -             -             -          -            -
                            _________    _________     _________     _________  _________    _________

   Total....................$ 1,706.0    $15,990.4     $17,122.2     $ 1,488.2  $27,270.2    $10,793.9
                            _________    _________     _________     _________  _________    _________
                            _________    _________     _________     _________  _________    _________


                                            Other income
                                              (including            Amortization of
                                      Net       realized    Current deferred policy      Other
                               investment  capital gains and future     acquisition  operating  Premiums
Segment                        income (2)    and losses)   benefits           costs   expenses   written (3)
_______                       ___________  _____________ __________      __________ __________ _____________
(Millions)

<S>                             <C>         <C>            <C>           <C>         <C>         <C>
Aetna Health Plans............. $   388.2   $   957.2      $ 3,793.1     $       -   $ 1,727.0   $    59.8
Large Case Pensions............   2,560.4       (13.3)       2,697.7             -       107.7           -
Aetna Life Insurance
 & Annuity.....................     884.3       245.6          821.3          32.7       240.7           -
Property-Casualty..............   1,016.5       420.7        4,772.2         725.9     1,282.3     4,916.3
International..................     278.5       109.1          732.3          41.6       385.6        72.3
Corporate......................     (58.9)  _    16.2           32.3             -   _   327.4           -
                                _________   _________      _________     _________   _________   _________

     Total..................... $ 5,069.0   $ 1,735.5      $12,848.9     $   800.2   $ 4,070.7   $ 5,048.4
                                _________   _________      _________     _________   _________   _________
                                _________   _________      _________     _________   _________   _________

<FN>

(1) Includes minimal property-casualty business.

(2) The allocation of net investment income is based upon the investment year method
    or specific identification of certain portfolios within specific segments.

(3) Excludes life insurance business pursuant to Regulation S-X.

</TABLE>


<PAGE> 54

                 AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                                   SCHEDULE VIII

                  Valuation and Qualifying Accounts and Reserves

<TABLE>

<CAPTION>


For the years ended December 31,
(Millions)
                                                     Additions         
                                              _________________________
                                                             Charged
                                Balance at     Charged to    to other                      Balance
                                 beginning      costs and    accounts-    Deductions-    at end of
                                 of period    expenses (1)   describe (2) describe (3)      period
                                __________    ____________  _____________ ____________   _________

<S>                             <C>           <C>           <C>           <C>            <C>

1994
____
Asset valuation reserves:
   Debt securities...........   $   102.8     $     2.7     $    14.7     $  (120.2)     $       -
   Mortgage loans............     1,308.3         103.3         197.9        (825.4)         784.1
   Equity securities.........        10.6             -             -         (10.6)             -
   Real estate...............       267.7          (1.2)         24.2        (145.0)         145.7
   Other.....................         6.0             -             -             -            6.0
                                _________     _________     _________     _________      _________

                                $ 1,695.4     $   104.8     $   236.8     $(1,101.2)     $   935.8
                                _________     _________     _________     _________      _________
                                _________     _________     _________     _________      _________


1993
____
Asset valuation reserves:
   Debt securities...........   $   105.2     $    14.5     $    12.5     $   (29.4)     $   102.8
   Mortgage loans............     1,065.6         421.7         176.5        (355.5)       1,308.3
   Equity securities.........        12.5            .8             -          (2.7)          10.6
   Real estate...............        68.8         176.7          79.3         (57.1)         267.7
   Other.....................         6.0             -             -             -            6.0
                                _________     _________     _________     _________      _________

                                $ 1,258.1     $   613.7     $   268.3     $  (444.7)     $ 1,695.4
                                _________     _________     _________     _________      _________
                                _________     _________     _________     _________      _________


1992
____
Asset valuation reserves:
   Debt securities...........   $   145.7     $    (9.0)    $    (3.1)    $   (28.4)     $   105.2
   Mortgage loans............       767.6         366.5         115.4        (183.9)       1,065.6
   Equity securities.........         8.0           4.5             -             -           12.5
   Real estate...............           -          53.6          22.6          (7.4)          68.8
   Other.....................       131.6             -             -        (125.6) (4)       6.0
                                _________     _________     _________     _________      _________

                                $ 1,052.9     $   415.6     $   134.9     $  (345.3)     $ 1,258.1
                                _________     _________     _________     _________      _________
                                _________     _________     _________     _________      _________

________________________

<FN>

(1) Charged to net realized capital gains (losses) in the Consolidated Statements of Income.

(2) Reflects additions to reserves related to assets supporting experience rated contracts
    and discontinued products for which a corresponding reduction was included in Policyholders'
    Funds Left with the Company in the Consolidated Balance Sheets and the reserve for future
    losses, respectively.

(3) Reduction in reserves is primarily a result of related asset write-downs
    (including foreclosures of real estate) and sales.

(4) Primarily related to oil and gas properties.  During 1992, the majority of
    the oil and gas properties were sold.

</TABLE>


<PAGE> 55

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                            SCHEDULE IX

                       Short-Term Borrowings

<TABLE>

<CAPTION>

For the years ended December 31,
(Millions)
                                                                                          Weighted
                                                           Maximum         Average    average rate
Category of                               Weighted          amount          amount       on amount
aggregate                     Balance      average     outstanding     outstanding     outstanding
short-term                  at end of     interest      during the      during the      during the
borrowings                     period         rate          period         period*         period*
___________                 _________    _________     ___________     ___________    ____________

<S>                         <C>          <C>           <C>             <C>            <C>

1994
____
Commercial paper..........  $    -          -%         $383.5          $177.3         4.6%
Bank notes................    13.6       11.0            21.1            19.2         9.0
Other.....................    10.3        0.8           143.8            23.4         2.3


1993
____
Commercial paper..........  $  8.4        7.0%         $560.1          $150.4         3.6%
Bank notes................       -          -             7.5             7.5         6.0
Other.....................    27.3        0.4           385.1            57.7         2.5


1992
____
Commercial paper..........  $ 22.5        6.0%         $539.0          $263.9         3.7%
Bank notes................       -          -             7.5             7.5         6.3
Other.....................     2.1        8.8             2.1             1.7         8.8

________________________

<FN>

* Method of computation - daily weighted average based upon respective time outstanding
  and the amount of borrowings.

</TABLE>


<PAGE> 56

         AETNA LIFE AND CASUALTY COMPANY AND SUBSIDIARIES

                            SCHEDULE X

               Supplemental Information Concerning
                  Property-Casualty Operations

<TABLE>

<CAPTION>

For the years ended December 31,
(Millions)

                                          Reserves for        Discount deducted
                             Deferred    unpaid claims        from reserves for
        Affiliation            policy        and claim            unpaid claims
               with       acquisition       adjustment                and claim   Unearned         Earned
         registrant             costs(1)      expenses(2)   adjustment expenses   premiums(1)    premiums(1)
        ___________       ___________    _____________      ___________________   ________       ________

<S>     <C>               <C>            <C>                <C>                   <C>            <C>

1994    Consolidated
        property-
        casualty
        entities          $   316        $11,163            $  644 (3)            $ 1,426        $ 4,391

1993    Consolidated
        property-
        casualty
        entities          $   330        $11,438            $  634 (3)            $ 1,333        $ 4,653

1992    Consolidated
        property-
        casualty
        entities          $   329        $11,747            $    -                $ 1,335        $ 5,076


                                          Claims and claim                                 Paid
                               Net     adjustment expenses                               claims
        Affiliation     investment     incurred related to:     Amortization of      and claim
               with      and other     Current      Prior       deferred policy     adjustment   Premiums
         registrant         income(1)     year(2)   years(2)  acquisition costs(1)    expenses(1) written(1)
        ___________     __________     _______     ______     _________________     __________   ________

<S>     <C>             <C>            <C>         <C>         <C>                   <C>         <C>

1994    Consolidated
        property-
        casualty
        entities        $   832        $ 3,631     $   252    $   647               $ 4,158      $ 4,467

1993    Consolidated
        property-
        casualty
        entities        $   952        $ 3,724     $    60    $   646               $ 4,093      $ 4,465

1992    Consolidated
        property-
        casualty
        entities        $ 1,017        $ 4,407     $   466    $   726               $ 4,533      $ 4,916

<FN>

(1) Excludes International.

(2) Net of reinsurance and discounting.

(3) Reserves for workers' compensation life table indemnity claims are discounted
    at 5% for voluntary business and 3.5% for involuntary business.

</TABLE>


<PAGE> 57

                            SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange 
Act of 1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized.

Date:  March 17, 1995
                             AETNA LIFE AND CASUALTY COMPANY
                                       (Registrant)

                             By  /s/ Robert E. Broatch              
                                     _______________________________
                                           (Signature)
                                     Robert E. Broatch
                                     Senior Vice President, Finance,
                                     and Corporate Controller

Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf 
of the registrant and in the capacities indicated on March 17, 1995.

          Signature                     Title
            *
          ________________________      Chairman, President and Director
          Ronald E. Compton             (Principal Executive Officer)

            *
          ________________________
          Wallace Barnes                Director

            *
          ________________________
          John F. Donahue               Director

            *
          ________________________
          William H. Donaldson          Director

            *
          ________________________
          Barbara Hackman Franklin      Director

            *
          ________________________
          Earl G. Graves                Director

            *
          ________________________
          Gerald Greenwald              Director

            *
          ________________________
          Michael H. Jordan             Director

            *
          ________________________
          Jack D. Kuehler               Director

            *
          ________________________
          Frank R. O'Keefe, Jr.         Director

            *
          ________________________
          David M. Roderick             Director

            *
          ________________________
          Richard L. Huber              Vice Chairman for
                                        Strategy and Finance
                                       (Principal Financial Officer)

      /s/ Robert E. Broatch       
          ________________________
          Robert E. Broatch             Senior Vice President, Finance, and
                                        Corporate Controller (Controller)

* By  /s/ Robert E. Broatch       
          ________________________
          Robert E. Broatch
          (Attorney-in-Fact)

<PAGE> 58


                                       INDEX TO EXHIBITS

<TABLE>

<CAPTION>

Exhibit                                                                        Filing
Number     Description of Exhibit                                              Method
______     ______________________                                              ______

<S>        <C>                                                                 <C>

(12)       Statement re computation of ratios.                                 Electronic

           Statement re:  computation of ratio of earnings to fixed charges.

           Statement re:  computation of ratio of earnings to combined fixed
           charges and preferred stock dividends.

(13)       Annual Report to security holders.                                  Electronic

           Selected Financial Data, Management's Discussion and Analysis of
           Financial Condition and Results of Operations, Consolidated 
           Financial Statements and the report of the company's
           independent auditors, and unaudited Quarterly Data from the Annual
           Report.

(21)       Subsidiaries of the registrant.                                     Electronic

           A listing of subsidiaries of Aetna Life and Casualty Company.

(23)       Consents of experts and counsel.                                    Electronic

           Consent of Independent Auditors to Incorporation by Reference in
           the Registration Statements on Form S-3 and Form S-8.

(24)       Powers of Attorney.                                                 Electronic

(27)       Financial Data Schedule.                                            Electronic

(28)       Information from reports furnished to state insurance regulatory    P
           authorities.                                                        Paper

           1994 Consolidated Schedule P of Annual Statements provided to
           state regulatory authorities.

</TABLE>




