<ARTICLE> 7
<LEGEND>
This schedule contains summary information extracted from the balance
sheet and statement of income of ARM Financial Group, Inc's form 10-Q
for the three months ended March 31, 1999 and is qualified in its
entirety.
</LEGEND>
<MULTIPLIER> 1,000
       
                             
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          MAR-31-1999
<PERIOD-START>                             JAN-01-1999
<PERIOD-END>                               MAR-31-1999
<DEBT-HELD-FOR-SALE>                         6,175,587
<DEBT-CARRYING-VALUE>                                0
<DEBT-MARKET-VALUE>                                  0
<EQUITIES>                                      33,020
<MORTGAGE>                                      13,649
<REAL-ESTATE>                                        0
<TOTAL-INVEST>                               5,895,646
<CASH>                                         279,941
<RECOVER-REINSURE>                                   0
<DEFERRED-ACQUISITION>                         137,381
<TOTAL-ASSETS>                              10,042,380
<POLICY-LOSSES>                              6,751,175
<UNEARNED-PREMIUMS>                                  0
<POLICY-OTHER>                                       0
<POLICY-HOLDER-FUNDS>                                0
<NOTES-PAYABLE>                                 38,000
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                     75,000
<COMMON>                                           238
<OTHER-SE>                                     103,363
<TOTAL-LIABILITY-AND-EQUITY>                10,042,380
<PREMIUMS>                                           0
<INVESTMENT-INCOME>                            136,468
<INVESTMENT-GAINS>                               (351)
<OTHER-INCOME>                                   6,652
<BENEFITS>                                     107,089
<UNDERWRITING-AMORTIZATION>                      4,364
<UNDERWRITING-OTHER>                            11,674
<INCOME-PRETAX>                                 17,948
<INCOME-TAX>                                     4,543
<INCOME-CONTINUING>                             13,405
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    13,405
<EPS-PRIMARY>                                     0.52
<EPS-DILUTED>                                     0.51
<RESERVE-OPEN>                                       0
<PROVISION-CURRENT>                                  0
<PROVISION-PRIOR>                                    0
<PAYMENTS-CURRENT>                                   0
<PAYMENTS-PRIOR>                                     0
<RESERVE-CLOSE>                                      0
<CUMULATIVE-DEFICIENCY>                              0