##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION  FORM 10-K ANNUAL REPORT Pursuant to Sections 13 or 15(d) of
the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2003 Commission File Number - 1-6026 THE MIDLAND COMPANY Incorporated in Ohio I.R.S. Employer Identification No. 31-0742526 7000 Midland Boulevard
Amelia, Ohio 45102-2607
Tel. (513) 943-7100 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, no
par value. Indicate by check mark whether the registrant (1) has filed all other
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, 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. [   ] Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2 of the Act). Yes
[X]   No [   ] At June 30, 2003, the aggregate market value of the voting and non-voting
common stock held by nonaffiliates, which includes shares held by executive
officers and directors, of the registrant at June 30, 2003 was $389,232,000
based on a closing price of $22.07 per share. As of March 1, 2004, 18,736,329 shares of no par value common stock were
issued and outstanding. Documents Incorporated by Reference Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 2003 are incorporated by reference into Parts I, II and IV. Portions of the Registrants Proxy Statement to be delivered to
shareholders in connection with the Annual Meeting of Shareholders to be held
April 8, 2004 are incorporated by reference into Part III. 1




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TABLE OF CONTENTS  PART IITEM 1. BusinessITEM 2. PropertiesITEM 3. Legal ProceedingsITEM 4. Submission of Matters to a Vote of Security HoldersPART IIITEM 5. Market for the Registrants Common Equity and Related Stockholder MattersITEM 6. Selected Financial DataITEM 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsITEM 7A. Quantitative and Qualitative Disclosures about Market RiskITEM 8. Financial Statements and Supplementary DataITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial DisclosuresITEM 9A. Controls and ProceduresPART IIIITEM 10. Directors and Executive Officers of the RegistrantITEM 11. Executive CompensationITEM 12. Security Ownership of Certain Beneficial Owners and ManagementITEM 13. Certain Relationships and Related TransactionsITEM 14. Principal Accounting Fees and ServicesPART IVITEM 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-KSIGNATURESINDEPENDENT AUDITORS CONSENT AND REPORT ON SCHEDULESSchedule I - Summary of Investments Other than Investments in Related PartiesSchedule II - Condensed Financial Information of Registrant Condensed Balance Sheet InformationSchedule II - Condensed Financial Information of Registrant Condensed Statements of Income InformationSchedule II - Condensed Financial Information of Registrant Condensed Statements of Cash Flows InformationSchedule II - Condensed Financial Information of Registrant Notes to Condensed Financial InformationSchedule III - Supplementary Insurance InformationSchedule IV - ReinsuranceEX-10.4EX-13EX-21EX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  THE MIDLAND COMPANY FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 2003  Certain statements made in this report are forward-looking and are made
pursuant to the safe harbor provisions of the Securities Litigation Reform
Act of 1995. These statements include certain discussions relating to
future revenue, underwriting income, premium volume, investment income and
other investment results, business strategies, profitability, liquidity,
capital adequacy, anticipated capital expenditures and business
relationships, as well as any other statements concerning the year 2004
and beyond. In some cases you can identify forward-looking statements by
such terms as may, will, could, would, expect, plan, intend,
anticipate, believe, estimate, project, predict, potential and
similar expressions or the negative versions of such expressions. The
forward-looking statements involve risks and uncertainties that may cause
results to differ materially from those anticipated in those statements.
Factors that might cause results to differ from those anticipated include,
without limitation, adverse weather conditions, changes in underwriting
results affected by adverse economic conditions, fluctuations in the
investment markets, changes in the retail marketplace, changes in the laws
or regulations affecting the operations of Midland or its subsidiaries,
changes in the business tactics or strategies of Midland, its subsidiaries
or its current or anticipated business partners, the financial condition
of Midlands business partners, acquisitions or divestitures, changes in
market forces, litigation and the other risk factors that have been
identified in Midlands filings with the SEC, any one of which might
materially affect the operations of Midland or its subsidiaries. Any
forward-looking statements speak only as of the date made. We undertake
no obligation to update any forward-looking statements to reflect events
or circumstances arising after the date on which they are made. 
 PART I 
 ITEM 1.
    
    Business.Midland hereby incorporates by reference the inside cover and pages 6
through 13, 16 through 27 and 41 and 42 (Note 19) of its 2003 Annual
Report to Shareholders. Midland was incorporated in Ohio in 1968 with
its original predecessor company dating back to 1938. The approximate
number of persons employed by Midland was 1,080 at December 31, 2003.Property and Casualty Loss ReservesMidlands consolidated financial statements include the estimated
liability (reserves) for unpaid losses and loss adjustment expenses
(LAE) of its property and casualty insurance subsidiaries. The
liability is presented net of amounts recoverable from salvage and
subrogation and includes amounts recoverable from reinsurance for which
receivables are recognized.Midland establishes reserves for losses that have been reported and
certain legal expenses on the case basis method. Claims incurred but
not reported (IBNR) and other adjustment expenses are estimated using
statistical procedures. Salvage and subrogation recoveries are accrued
using the case basis method for large claims and statistical
procedures for smaller claims.Midlands objective is to set reserves that are adequate; that is, the
amounts originally recorded as reserves should at least equal the
amounts ultimately expected to be required to settle losses. The
property and casualty divisions reserves represent the
Companys best estimates
of the total ultimate cost of claims that have been incurred but have
not yet been paid. The estimates are based on past claims experience
and reflect current claims trends as well as social, legal and economic
conditions, including inflation. The reserves are not discounted.
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Management reviews the loss and loss adjustment expense reserve
development on a regular basis to determine whether the reserving
assumptions and methods are appropriate. Reserves initially determined
are compared to the amounts ultimately paid. Management regularly
makes statistical estimates of the projected amounts necessary to
settle outstanding claims, compares these estimates to the recorded
reserves and adjusts the reserves as necessary. The adjustments are
reflected in current operations.The principle reason for differences between the loss and LAE liability
reported in the accompanying consolidated financial statements in
accordance with accounting principles generally accepted in the United
States of America (GAAP) and that reported in the annual statements
filed with state insurance departments in accordance with statutory
accounting practices (SAP) relates to the reporting of reinsurance
recoverables as receivables for GAAP purposes and as a reduction in
reserves for SAP purposes.Changes in Loss and LAE Reserves:Midlands table outlining changes in loss and LAE expenses was set
forth in footnote 11 on page 38 of the 2003 Annual Report and is hereby
incorporated by reference herein. This table is further discussed in
Managements Discussion and Analysis on page 19 of the 2003 Annual
Report and is incorporated by reference herein.Analysis of Loss and LAE Reserve DevelopmentThe following table presents the development of Midlands property and
casualty insurance subsidiaries estimated liability for the ten years
prior to 2003. The top line of the table illustrates the estimated
liability for unpaid losses and LAE recorded at the balance sheet date
at the end of each of the indicated years. This liability represents
the estimated amount of losses and LAE for claims arising in all prior
years that were unpaid at the balance sheet date, including losses that
had been incurred but not yet reported.The upper portion of the table shows the re-estimated amount of the
previously recorded liability based on experience as of the end of each
succeeding year. The estimate was increased or decreased as more
information became known about the frequency and severity of claims for
individual years. Conditions and trends that have affected development
of the liability in the past may not necessarily occur in the future.
Accordingly, it may not be appropriate to extrapolate future
redundancies or deficiencies based on this table.The table shows the cumulative redundancy developed with respect to the
previously recorded liability for all years as of the end of 2003. For
example, the 1997 reserve of $81,901,000 has been re-estimated as of
year-end 2003 to be $76,592,000, indicating a redundancy of $5,309,000.The lower section of the table shows the cumulative amount paid with
respect to the previously recorded liability as of the end of each
succeeding year. For example, as of December 31, 2003, the Company had
paid $73,237,000 of the currently estimated $76,592,000 of losses and
LAE that had been incurred as of the end of 1997; thus an estimated
$3,355,000 of losses incurred as of the end of 1997 remain unpaid as of
the current financial statement date.In using this information, it should be noted that this table does not
present accident or policy year development data which readers may be
more accustomed to analyzing. Each amount in each column includes
amounts applicable to the year over the column and all prior years.
For example, the amounts included in the 1997 column include amounts
related to 1997 and all prior years.The unfavorable reserve development of $12.0 million relative to the
reserves outstanding at December 31, 2002 is primarily due to higher
than expected loss development emanating from the commercial liability
line products, and to a lesser extent, the motorcycle product. Midland
exited the commercial liability lines in September 2001.
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##### Table of Contents



Analysis of Loss and Loss Adjustment Expense Development
(Amounts in 000s) December 31
    
    1993
    
    1994
    
    1995
    
    1996
    
    1997
    
    1998
    
    1999
    
    2000
    
    2001
    
    2002
    
    2003Reserve for Unpaid Losses,
net of reinsurance
    
    $
    27,744
    
    
    $
    37,481
    
    
    $
    47,712
    
    
    $
    64,784
    
    
    $
    81,901
    
    
    $
    88,267
    
    
    $
    89,325
    
    
    $
    95,022
    
    
    $
    102,858
    
    
    $
    115,584
    
    
    $
    149,478Net Reserve Re-estimated as of:One Year Later
    
    
    25,668
    
    
    
    30,134
    
    
    
    51,483
    
    
    
    70,014
    
    
    
    79,781
    
    
    
    78,089
    
    
    
    82,373
    
    
    
    90,843
    
    
    
    94,487
    
    
    
    127,615Two Years Later
    
    
    22,686
    
    
    
    32,074
    
    
    
    53,467
    
    
    
    67,310
    
    
    
    77,148
    
    
    
    77,774
    
    
    
    80,928
    
    
    
    90,613
    
    
    
    101,466Three Years Later
    
    
    21,154
    
    
    
    31,880
    
    
    
    52,418
    
    
    
    66,442
    
    
    
    76,110
    
    
    
    76,477
    
    
    
    80,620
    
    
    
    91,885Four Years Later
    
    
    20,966
    
    
    
    31,734
    
    
    
    51,688
    
    
    
    66,060
    
    
    
    76,620
    
    
    
    76,833
    
    
    
    81,569Five Years Later
    
    
    20,688
    
    
    
    31,155
    
    
    
    51,087
    
    
    
    65,674
    
    
    
    76,359
    
    
    
    76,276Six Years Later
    
    
    20,629
    
    
    
    31,130
    
    
    
    51,298
    
    
    
    66,702
    
    
    
    76,592Seven Years Later
    
    
    20,962
    
    
    
    31,113
    
    
    
    51,543
    
    
    
    66,970Eight Years Later
    
    
    20,913
    
    
    
    31,228
    
    
    
    51,826Nine Years Later
    
    
    20,972
    
    
    
    31,339Ten Years Later
    
    
    20,972Net Cumulative
Redundancy/(Deficiency)
    
    $
    6,772
    
    
    $
    6,142
    
    
    $
    (4,114
    )
    
    $
    (2,186
    )
    
    $
    5,309
    
    
    $
    11,991
    
    
    $
    7,756
    
    
    $
    3,137
    
    
    $
    1,392
    
    
    $
    (12,031
    )Cumulative Amount of Reserve Paid,
Net of Reinsurance Through:One Year Later
    
    $
    9,684
    
    
    $
    19,040
    
    
    $
    31,471
    
    
    $
    37,307
    
    
    $
    42,795
    
    
    $
    40,785
    
    
    $
    43,532
    
    
    $
    52,634
    
    
    $
    54,160
    
    
    $
    70,986Two Years Later
    
    
    18,445
    
    
    
    26,471
    
    
    
    41,785
    
    
    
    51,461
    
    
    
    57,677
    
    
    
    55,959
    
    
    
    57,381
    
    
    
    66,936
    
    
    
    70,997Three Years Later
    
    
    19,930
    
    
    
    29,237
    
    
    
    47,434
    
    
    
    58,716
    
    
    
    65,610
    
    
    
    63,511
    
    
    
    65,654
    
    
    
    75,447Four Years Later
    
    
    20,427
    
    
    
    30,425
    
    
    
    49,596
    
    
    
    61,913
    
    
    
    69,376
    
    
    
    67,707
    
    
    
    71,261Five Years Later
    
    
    20,558
    
    
    
    30,770
    
    
    
    50,051
    
    
    
    63,728
    
    
    
    71,621
    
    
    
    70,683Six Years Later
    
    
    20,598
    
    
    
    30,846
    
    
    
    50,685
    
    
    
    64,363
    
    
    
    73,237Seven Years Later
    
    
    20,953
    
    
    
    30,971
    
    
    
    50,886
    
    
    
    65,066Eight Years Later
    
    
    20,968
    
    
    
    31,014
    
    
    
    51,254Nine Years Later
    
    
    20,972
    
    
    
    31,061Ten Years Later
    
    
    20,972Net Reserve - December 31
    
    
    
    
    
    $
    37,481
    
    
    $
    47,712
    
    
    $
    64,784
    
    
    $
    81,901
    
    
    $
    88,267
    
    
    $
    89,325
    
    
    $
    95,022
    
    
    $
    102,858
    
    
    $
    115,584
    
    
    $
    149,478Reinsurance Recoverables
    
    
    
    
    
    
    14,597
    
    
    
    13,785
    
    
    
    24,208
    
    
    
    26,433
    
    
    
    20,430
    
    
    
    24,114
    
    
    
    16,720
    
    
    
    19,309
    
    
    
    16,119
    
    
    
    20,453Gross Reserve-December 31
    
    
    
    
    
    $
    52,078
    
    
    $
    61,497
    
    
    $
    88,992
    
    
    $
    108,334
    
    
    $
    108,697
    
    
    $
    113,439
    
    
    $
    111,742
    
    
    $
    122,167
    
    
    $
    131,703
    
    
    $
    169,931Net Re-estimated Reserve
    
    
    
    
    
    $
    31,339
    
    
    $
    51,826
    
    
    $
    66,970
    
    
    $
    76,592
    
    
    $
    76,276
    
    
    $
    81,569
    
    
    $
    91,885
    
    
    $
    101,466
    
    
    $
    127,615Re-estimated Reinsurance
    
    
    
    
    
    $
    12,205
    
    
    $
    14,974
    
    
    $
    25,025
    
    
    $
    24,720
    
    
    $
    17,655
    
    
    $
    22,020
    
    
    $
    16,168
    
    
    $
    19,048
    
    
    $
    17,797Gross Re-estimated Reserve
    
    
    
    
    
    $
    43,544
    
    
    $
    66,800
    
    
    $
    91,995
    
    
    $
    101,312
    
    
    $
    93,931
    
    
    $
    103,589
    
    
    $
    108,053
    
    
    $
    120,514
    
    
    $
    145,412Gross Cumulative
Redundancy/(Deficiency)
    
    
    
    
    
    $
    8,534
    
    
    $
    (5,303
    )
    
    $
    (3,003
    )
    
    $
    7,022
    
    
    $
    14,766
    
    
    $
    9,850
    
    
    $
    3,689
    
    
    $
    1,653
    
    
    $
    (13,709
    )
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SeasonalityIncurred losses, and thus the results of operations, for Midland are
dependent in some respect on seasonal weather patterns. For example,
for the past few years, growth in seasonal type insurance products such
as the motorcycle and watercraft products has outpaced the growth in
our other property and casualty products. This has increased the
seasonality of our product mix as non-catastrophe losses from these
products are expected to be higher in the second and third quarters of
the year when usage of these products tends to be highest.
Manufactured housing catastrophe losses also tend to be greater in the
second and third quarters when severe weather conditions are likely to
occur. Gross written premium from the motorcycle, watercraft and
manufactured housing products amounted to $411.3 million in 2003 which
represents 62% of the total property and casualty gross written premium
for the year.ReinsuranceMidland attempts to mitigate its risk to such unpredictable weather
patterns by diversifying the geographic areas covered and by reinsuring
certain levels of risk with other insurance companies. By reinsuring
certain levels and types of insurable risk with other insurance
companies, Midland limits its exposure to losses to that portion of the
insurable risk it retains. However, failure of the reinsurer to honor
their obligation could result in losses to Midland, as the reinsurance
contracts do not relieve Midland of its obligations to policyholders.
Midland continually evaluates the financial condition of its reinsurers
to minimize its exposure to losses from reinsurer insolvencies and does
not believe it holds any significant concentration of credit risk
arising from any single reinsurer or any similar geographic region,
activity or economic characteristic associated with its reinsurers.
Midland fully expects its reinsurers to honor their obligations. As of
December 31, 2003 Midland is owed $5.1 million from reinsurers for
claims that have been paid and for which a contractual obligation to
collect from a reinsurer exists. Midland has not experienced any
significant uncollectible reinsurance amounts or coverage disputes with
its reinsurers historically and the composition of its reinsurers has
not changed significantly in recent years.Significant CustomerAs indicated in Industry Segments, Note 19 to Midlands 2003
consolidated financial statements, Midlands wholly owned subsidiary,
American Modern Insurance Group, receives significant revenues from one
customer, GreenTree Insurance Agency, Inc. (formerly Conseco Agency,
Inc.). In 2003, the revenues related to GreenTree (earned premium net
of amounts ceded to reinsurers) were less than 10% of Midlands
consolidated revenues. For the years ended December 31, 2002 and 2001
the revenues related to GreenTree were $78.6 million and $80.7 million,
respectively, and were more than 10% of Midlands consolidated
revenues. The receivable balance from GreenTree has decreased from
continued collections to $4.8 million at December 31, 2003, down
from $11.1 million and $20.7 million at December 31,
2002
and 2001, respectively. The GreenTree receivable is current at
December 31, 2003.Website AddressMidlands website address is www.midlandcompany.com. Midlands annual,
quarterly and other periodic filings and current reports on Form 8-K
are available free of charge on or through this website.ITEM 2.
    
    Properties.Midland owns its 275,000 square foot principal offices located in
Amelia, Ohio. Midlands insurance subsidiaries lease office space
in Amelia, Ohio, Montgomery, Alabama, Atlanta, Georgia, St. Louis,
Missouri, Grand Rapids, Michigan and West Des Moines, Iowa.
Midlands transportation subsidiaries lease offices in Metairie,
Louisiana and St. Louis, Missouri.ITEM 3.
    
    Legal Proceedings.None.ITEM 4.
    
    Submission of Matters to a Vote of Security Holders.None during the fourth quarter.
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##### Table of Contents



PART II 
 ITEM 5.
    
    Market for the Registrants Common Equity and Related Stockholder Matters. Incorporated by reference to pages 41
(Note 16) and 44 of Midlands 2003 Annual Report to Shareholders. The number of holders of Midlands common stock at
December 31, 2003 was approximately 2,600. Midlands common stock is registered on the NASDAQ National Market
(MLAN). The table required by Regulation S-K Item 201(d) which appears in the proxy materials is hereby incorporated
by reference.
 
 ITEM 6.
    
    Selected Financial Data.Incorporated by reference to Six Year Financial Summary Data on pages 14 and 15 of Midlands 2003 Annual Report to
Shareholders.
 
 ITEM 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.Incorporated by reference to pages 16 through 27 of Midlands 2003 Annual Report to Shareholders.
 
 ITEM 7A.
    
    Quantitative and Qualitative Disclosures about Market RiskIncorporated by reference to Market Risk section of Managements Discussion and Analysis of Financial Conditions and
Results from Operations on page 27 of Midlands 2003 Annual Report to Shareholders.
 
 ITEM 8.
    
    Financial Statements and Supplementary Data.Incorporated by reference to pages 28 through 44 of Midlands 2003 Annual Report to Shareholders.
 
 ITEM 9.
    
    Changes In and Disagreements with Accountants on Accounting and Financial Disclosures.None.
 
 ITEM 9A.
    
    Controls and Procedures.At the end of the period covered by this report (the Evaluation Date), we carried out an evaluation, under the
supervision and with the participation of our management, including our President and Chief Executive Officer and our
Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended
(the Exchange Act). Based upon this evaluation, our President and Chief Executive Officer and our Executive Vice
President and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and
procedures were effective.The company maintains a system of internal control over financial reporting. There have been no changes in the
companys internal control over financial reporting that occurred during the companys last fiscal quarter that have
materially affected, or are reasonably likely to materially affect, the companys internal control over financial
reporting.
 
 PART III 
 ITEM 10.
    
    Directors and Executive Officers of the Registrant.Incorporated by reference to Midlands Proxy Statement dated March 10, 2004.
 
 ITEM 11.
    
    Executive Compensation.Incorporated by reference to Midlands Proxy Statement dated March 10, 2004.
 
 ITEM 12.
    
    Security Ownership of Certain Beneficial Owners and Management.Incorporated by reference to Midlands Proxy Statement dated March 10, 2004.
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##### Table of Contents



ITEM 13.
    
    Certain Relationships and Related Transactions.Incorporated by reference to Midlands Proxy Statement dated March 10, 2004.
 
 ITEM 14.
    
    Principal Accounting Fees and Services.Incorporated by reference to Midlands Proxy Statement dated March 10, 2004.
 
 PART IV 
 ITEM 15.
    
    Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
  (a)
    
    1. Financial Statements.Incorporated by reference in Part II of this report: Independent Auditors Report.Consolidated Balance Sheets, December 31, 2003 and 2002.Consolidated Statements of Income for the Years
Ended December 31, 2003, 2002 and 2001.Consolidated Statements of Changes in Shareholders Equity
for the Years Ended December 31, 2003, 2002 and 2001.Consolidated Statements of Cash Flows for the Years Ended
December 31, 2003, 2002 and 2001.Notes to Consolidated Financial Statements.
  (a)
    
    2. Financial Statement Schedules.Included in Part IV of this report: PageIndependent Auditors Consent and Report on Schedules.
    
    
    12Schedule I - Summary of Investments - Other than Investments
in Related Parties - December 31, 2003
    
    
    13Schedule II - Condensed Financial Information of Registrant
    
    
    14-18Schedule III - Supplementary Insurance Information for the
Years Ended December 31, 2003, 2002 and 2001
    
    
    19Schedule IV - Reinsurance for the Years Ended
December 31, 2003, 2002 and 2001
    
    
    20Schedule V - Valuation and Qualifying Accounts for the
Years Ended December 31, 2003, 2002 and 2001
    
    
    21Schedule VI - Supplemental Information Concerning Property -
Casualty Insurance Operations for the Years Ended
December 31, 2003, 2002 and 2001
    
    
    22
  (b)
    
    Reports on Form 8-K  None.  (c)
    
    Exhibits. 3.1
    
    Articles of Incorporation - Filed as Exhibit 3(i) to the Registrants
Form 10-Q for the quarter ended June 30, 1998 and incorporated
herein by reference.3.2
    
    Code of Regulations (Amended and Restated) - Filed as Exhibit 3(ii)
to the Registrants Form 10-Q for the quarter ended June 30, 2000
and incorporated herein by reference.
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##### Table of Contents



10.1
    
    The Midland Company 2002 Employee Incentive Stock Plan (Amended
and Restated)* - Incorporated by Reference to Registrants Proxy
Statement dated March 12, 2002; amended to include amendments set
forth in Registrants Proxy Statement dated March 10, 2004, which is
incorporated herein by reference.10.2
    
    The Midland Company 2002 Restricted Stock and Stock Option Plan
for Non-Employee Directors* - Incorporated by Reference to the
Registrants Proxy Statement dated March 12, 2002.10.3
    
    The Midland Company 1992 Employee Incentive Stock Plan
(Amended and Restated)* - Filed as Exhibit 10.1 to the Registrants
Form 10-K for the year ended December 31, 2000 and incorporated
herein by reference.10.4
    
    Annual Incentive Plan* - Filed herewith.10.5
    
    Executive Annual Incentive Plan* - Set forth in Registrants Proxy
Statement dated March 10, 2004, which is incorporated herein
by
reference.10.6
    
    Consulting Agreements with J. P. Hayden, Jr., Michael J. Conaton,
John R. LaBar and Robert W. Hayden - Filed as Exhibits 10.4(a)*,
10.4(b)*, 10.4(c)* and 10.4(d)* to the Registrants Form 10-K for the
year ended December 31, 2000 and incorporated herein by reference.10.7
    
    Employee Retention Agreements with Joseph P. Hayden III,
John W. Hayden, John I. Von Lehman and Paul T. Brizzolara - Filed
as Exhibits 10.5(a)*, 10.5(b)*, 10.5(c)* and 10.5(d)* to the Registrants
Form 10-K for the year ended December 31, 2000 and incorporated
herein by reference.10.8
    
    The Midland Guardian Co. Salaried Employees 401(k) Savings Plan,
The Midland Company 2000 Associate Discount Stock Purchase
Plan and The Midland Company Stock Option Plan for Non-Employee
Directors - Incorporated by Reference to Registrants Registration
Statement No. 333-40560 on Form S-8.10.9
    
    The Midland Company Dividend Reinvestment Plan - Incorporated by
Reference to Registrants Registration Statement No. 033-64821 on
Form S-3.10.10
    
    The Midland Company Non-Employee Director Deferred Compensation
Plan, The Midland Company Supplemental Retirement Plan*,
Midland-Guardian Co. Salaried Employees Non-Qualified Savings Plan*,
Midland-Guardian Co. Non-Qualified Self-Directed Retirement Plan*,
The Midland Company Stock Option Plan for Non-Employee Directors
as Amended January 2000 filed as Exhibits 10.1, 10.2, 10.3, 10.4 and
10.5 to the Registrants Form 10-Q for the quarter ended June 30, 2001
and incorporated herein by reference.13.
    
    2003 Annual Report to Shareholders - filed herewith. Only portions of the
2003 Annual Report to Shareholders specifically incorporated by reference
in this Form 10-K are filed herewith. The letter from management to
shareholders included in the 2003 Annual Report is expressly not
incorporated
herein by reference.
 8




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##### Table of Contents



Page21.
    
    Subsidiaries of the Registrant  filed herewith.
    
    
    2623.
    
    Independent Auditors Consent - Included in Consent and Report on Schedules referred to under Item 15(a)2 above.31.1
    
    Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
    
    
    2731.2
    
    Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
    
    
    2932.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. § 1350.
    
    
    3132.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. § 1350.
    
    
    32
  *
    
    Management Compensatory Plan or Arrangement 9




---



##### Table of Contents



SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. THE MIDLAND COMPANY
 Signature
    
    Title
    
    Date/s/ J. P. Hayden III
     (J. P. Hayden III)
    
    Chairman of the Board and
Chief Operating Officer
    
    March 12, 2004/s/ John W. Hayden
     (John W. Hayden)
    

President and
Chief Executive Officer
    
    March 12, 2004/s/ John I. Von Lehman
     (John I. Von Lehman)
    

Executive Vice President,
Chief Financial and
Accounting Officer
and Secretary
    
    March 12, 2004
 10




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##### Table of Contents



SIGNATURES 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 and on the dates indicated. THE MIDLAND COMPANY
 Signature
    
    Title
    
    Date/S/ James E. Bushman     
     (James E. Bushman)
    
    Director
    
    March 12, 2004/S/ James H. Carey     
     (James H. Carey)
    
    Director
    
    March 12, 2004/S/ Michael J. Conaton     
     (Michael J. Conaton)
    
    Director
    
    March 12, 2004/S/ Jerry A. Grundhofer     
     (Jerry A. Grundhofer)
    
    Director
    
    March 12, 2004/S/ J. P. Hayden, Jr.     
     (J. P. Hayden, Jr.)
    

Chairman of the Executive
Committee of the Board
and Director
    
    March 12, 2004/S/ J. P. Hayden III     
     (J. P. Hayden III)
    

Chairman of the Board,
Chief Operating Officer
and Director
    
    March 12, 2004/S/ John W. Hayden     
     (John W. Hayden)
    

President, Chief Executive
Officer and Director
    
    March 12, 2004/S/ Robert W. Hayden     
     (Robert W. Hayden)
    
    Director
    
    March 12, 2004/S/ William T. Hayden     
     (William T. Hayden)
    
    Director
    
    March 12, 2004/S/ William J. Keating, Jr.     
     (William J. Keating, Jr.)
    
    Director
    
    March 12, 2004/S/ John R. LaBar     
     (John R. LaBar)
    
    Director
    
    March 12, 2004/S/ Richard M. Norman     
     (Richard M. Norman)
    
    Director
    
    March 12, 2004/S/ David B. OMaley     
     (David B. OMaley)
    
    Director
    
    March 12, 2004/S/ John M. OMara     
     (John M. OMara)
    
    Director
    
    March 12, 2004/S/ Glenn E. Schembechler     
(Glenn E. Schembechler)
    
    Director
    
    March 12, 2004/S/ Francis Marie Thrailkill, OSU Ed.D.     
(Francis Marie Thrailkill, OSU Ed.D.)
    
    Director
    
    March 12, 2004/S/ John I. Von Lehman     
(John I. Von Lehman)
    

Executive Vice President,
Chief Financial and Accounting
Officer, Secretary and Director
    
    March 12, 2004
 11




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##### Table of Contents



INDEPENDENT AUDITORS CONSENT AND REPORT ON SCHEDULES To the Shareholders of The Midland Company: We consent to the incorporation by reference in Registration Statements Nos.
33-64821 and 333-109867 on Form S-3 and Nos. 33-48511, 333-40560 and 333-101390
on Form S-8 of The Midland Company of our report dated February 24, 2004 (which
report expresses an unqualified opinion and includes an explanatory paragraph
related to the adoption of Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets), incorporated by reference in this
Annual Report on Form 10-K, and our report (appearing below) on the financial
statement schedules of The Midland Company for the year ended December 31,
2003. Our audits of the consolidated financial statements referred to in our
aforementioned report also included the financial statement schedules of The
Midland Company and its subsidiaries, listed in Item 15(a)2. These financial
statement schedules are the responsibility of the Companys management. Our
responsibility is to express an opinion 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. /s/ Deloitte & Touche LLP
Deloitte & Touche LLP March 12, 2004
Cincinnati, Ohio 12




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##### Table of Contents



THE MIDLAND COMPANY AND SUBSIDIARIES 
 Schedule I - Summary of Investments
Other than Investments in Related Parties
December 31, 2003 Column A
    
    Column B
    
    Column C
    
    Column DAmount atWhich Shownin the BalanceType of Investment
    
    Cost
    
    Value
    
    SheetFixed maturity securities, available-for-sale:Bonds:United States Government and government
agencies and authorities
    
    $
    62,614,000
    
    
    $
    64,562,000
    
    
    $
    64,562,000States, municipalities and political subdivisions
    
    
    177,973,000
    
    
    
    188,588,000
    
    
    
    188,588,000Mortgage-backed securities
    
    
    172,494,000
    
    
    
    175,896,000
    
    
    
    175,896,000Foreign governments
    
    
    
    
    
    
    
    
    
    
    Public utilities
    
    
    19,088,000
    
    
    
    20,317,000
    
    
    
    20,317,000All other corporate bonds
    
    
    147,031,000
    
    
    
    157,556,000
    
    
    
    157,556,000Total
    
    
    579,200,000
    
    
    
    606,919,000
    
    
    
    606,919,000Equity securities, available-for-sale:Common stocks:Public utilities
    
    
    567,000
    
    
    
    532,000
    
    
    
    532,000Banks, trusts and insurance companies
    
    
    11,884,000
    
    
    
    82,836,000
    
    
    
    82,836,000Industrial, miscellaneous and all other
    
    
    42,953,000
    
    
    
    52,323,000
    
    
    
    52,323,000Embedded derivatives
    
    
    1,687,000
    
    
    
    1,687,000
    
    
    
    1,687,000Nonredeemable preferred stocks
    
    
    30,139,000
    
    
    
    36,722,000
    
    
    
    36,722,000Total
    
    
    87,230,000
    
    
    
    174,100,000
    
    
    
    174,100,000Accrued interest and dividends
    
    
    7,860,000
    
    
    
    XXXXXXX
    
    
    
    7,860,000Mortgage loans on real estate
    
    
    6,209,000
    
    
    
    XXXXXXX
    
    
    
    6,209,000Short-term investments
    
    
    51,234,000
    
    
    
    XXXXXXX
    
    
    
    51,234,000Total Investments
    
    $
    731,733,000
    
    
    
    XXXXXXX
    
    
    $
    846,322,000
 13




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##### Table of Contents



THE MIDLAND COMPANY (Parent Only) 
 Schedule II - Condensed Financial Information of Registrant
Condensed Balance Sheet Information
December 31, 2003 and 2002 ASSETS
    
    2003
    
    2002Cash
    
    $
    36,000
    
    
    $
    137,000Marketable Securities Available
for Sale (at market value):Debt Securities (cost, $118,000 in 2003
and $274,000 in 2002)
    
    
    118,000
    
    
    
    274,000Equity (cost, $368,000 in 2003
and $363,000 in 2002)
    
    
    3,812,000
    
    
    
    2,729,000Total
    
    
    3,930,000
    
    
    
    3,003,000Receivables - Net
    
    
    11,094,000
    
    
    
    15,061,000Property, Plant and Equipment (at cost):
    
    
    37,394,000
    
    
    
    37,492,000Less Accumulated Depreciation
    
    
    11,897,000
    
    
    
    11,121,000Net
    
    
    25,497,000
    
    
    
    26,371,000Other Assets
    
    
    9,833,000
    
    
    
    7,717,000Investments in Subsidiaries (at equity)
    
    
    367,846,000
    
    
    
    319,514,000Total Assets
    
    $
    418,236,000
    
    
    $
    371,803,000
 14




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##### Table of Contents



THE MIDLAND COMPANY (Parent Only) Schedule II - Condensed Financial Information of Registrant
Condensed Balance Sheet Information
December 31, 2003 and 2002 LIABILITIES AND SHAREHOLDERS EQUITY
    
    2003
    
    2002Notes Payable Within One Year:Banks (including current portion of long-term debt)
    
    $
    30,865,000
    
    
    $
    39,810,000Commercial Paper
    
    
    3,625,000
    
    
    
    4,238,000Total
    
    
    34,490,000
    
    
    
    44,048,000Other Payables and Accruals
    
    
    3,398,000
    
    
    
    2,525,000Intercompany Payables
    
    
    9,502,000
    
    
    
    669,000Long - Term Debt
    
    
    14,788,000
    
    
    
    15,653,000Shareholders Equity:Common Stock
- No Par (issued and outstanding: 17,643,000 shares at December 31, 2003 and
17,566,000 shares at December 31, 2002 after
deducting treasury stock of 4,213,000 shares and 4,290,000 shares, respectively)
    
    
    911,000
    
    
    
    911,000Additional
Paid - in Capital
    
    
    23,406,000
    
    
    
    22,516,000Retained Earnings
    
    
    299,752,000
    
    
    
    279,826,000Accumulated Other Comprehensive Income
    
    
    73,455,000
    
    
    
    47,573,000Treasury Stock (at cost)
    
    
    (41,442,000
    )
    
    
    (41,605,000
    )Unvested Restricted Stock Awards
    
    
    (24,000
    )
    
    

    (313,000
    )Total
    
    
    356,058,000
    
    
    
    308,908,000Total Liabilities and Shareholders Equity
    
    $
    418,236,000
    
    
    $
    371,803,000
 15




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##### Table of Contents



THE MIDLAND COMPANY (Parent Only) 
 Schedule II - Condensed Financial Information of Registrant
Condensed Statements of Income Information
For the Years Ended December 31, 2003, 2002 and 2001 2003
    
    2002
    
    2001Revenues:Dividends from Subsidiaries
    
    $
    175,000
    
    
    $
    
    
    
    $
    298,000All Other Income, Primarily Charges
to Subsidiaries
    
    
    5,817,000
    
    
    
    5,953,000
    
    
    
    5,992,000Total Revenues
    
    
    5,992,000
    
    
    
    5,953,000
    
    
    
    6,290,000Expenses:Interest Expense
    
    
    1,881,000
    
    
    
    2,410,000
    
    
    
    3,446,000Depreciation and Amortization
    
    
    1,130,000
    
    
    
    1,125,000
    
    
    
    1,749,000All Other Expenses
    
    
    3,384,000
    
    
    
    3,275,000
    
    
    
    2,626,000Total Expenses
    
    
    6,395,000
    
    
    
    6,810,000
    
    
    
    7,821,000Loss Before Federal Income Tax Benefit
    
    
    (403,000
    )
    
    
    (857,000
    )
    
    
    (1,531,000
    )Federal Income Tax Benefit
    
    
    (529,000
    )
    
    
    (340,000
    )
    
    
    (695,000
    )Income (Loss) Before Change in
Undistributed Income of Subsidiaries
    
    
    126,000
    
    
    
    (517,000
    )
    
    
    (836,000
    )Change in Undistributed Income of Subsidiaries
    
    
    23,150,000
    
    
    
    19,358,000
    
    
    
    28,058,000Net Income
    
    $
    23,276,000
    
    
    $
    18,841,000
    
    
    $
    27,222,000
 16




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##### Table of Contents



THE MIDLAND COMPANY (Parent Only) 
 Schedule II - Condensed Financial Information of Registrant
Condensed Statements of Cash Flows Information
For the Years Ended December 31, 2003, 2002 and 2001 2003
    
    2002
    
    2001Cash Flows from Operating Activities:Net income
    
    $
    23,276,000
    
    
    $
    18,841,000
    
    
    $
    27,222,000Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Increase in undistributed income
of subsidiaries
    
    
    (23,150,000
    )
    
    
    (19,358,000
    )
    
    
    (28,058,000
    )Decrease (increase) in receivables
    
    
    4,149,000
    
    
    
    (2,640,000
    )
    
    
    6,162,000Increase in other assets
    
    
    (2,116,000
    )
    
    
    (74,000
    )
    
    
    (1,072,000
    )Depreciation and amortization
    
    
    1,130,000
    
    
    
    1,125,000
    
    
    
    1,749,000Increase (decrease) in other payables and accruals
    
    
    426,000
    
    
    
    (1,195,000
    )
    
    
    (247,000
    )Other - net
    
    
    27,000
    
    
    
    
    
    
    
    68,000Net Cash Provided by (Used in)
Operating Activities
    
    
    3,742,000
    
    
    
    (3,301,000
    )
    
    
    5,824,000Cash Flows from Investing Activities:Change in investments (excluding unrealized
appreciation/depreciation)
    
    
    150,000
    
    
    
    (100,000
    )
    
    
    159,000Acquisition of property, plant and equipment
    
    
    (20,000
    )
    
    
    (69,000
    )
    
    
    (208,000
    )Sale of
property, plant and equipment - net
    
    
    16,000
    
    
    
    13,000
    
    
    
    40,000Net Cash Provided by (Used in)
Investing Activities
    
    
    146,000
    
    
    
    (156,000
    )
    
    
    (9,000
    )Cash Flows from Financing Activities:Increase
(decrease) in short - term borrowings
    
    
    (9,613,000
    )
    
    
    7,716,000
    
    
    
    (9,498,000
    )Net change in intercompany accounts
    
    
    8,833,000
    
    
    
    1,767,000
    
    
    
    15,804,000Dividends paid
    
    
    (3,281,000
    )
    
    
    (3,014,000
    )
    
    
    (2,818,000
    )Issuance of treasury stock
    
    
    2,015,000
    
    
    
    1,676,000
    
    
    
    2,333,000Purchase of treasury stock
    
    
    (1,133,000
    )
    
    

    (3,893,000
    )
    
    
    (10,900,000
    )Decrease in long-term debt
    
    
    (810,000
    )
    
    
    (756,000
    )
    
    
    (706,000
    )Net Cash Provided by (Used in)
Financing Activities
    
    
    (3,989,000
    )
    
    
    3,496,000
    
    
    
    (5,785,000
    )Net (Decrease) Increase in Cash
    
    
    (101,000
    )
    
    
    39,000
    
    
    
    30,000Cash at Beginning of Year
    
    
    137,000
    
    
    
    98,000
    
    
    
    68,000Cash at End of Year
    
    $
    36,000
    
    
    $
    137,000
    
    
    $
    98,000
 17




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##### Table of Contents



THE MIDLAND COMPANY (Parent Only) 
 Schedule II - Condensed Financial Information of Registrant
Notes to Condensed Financial Information
For the Years Ended December 31, 2003 and 2002 The accompanying condensed financial information should be read in conjunction
with the consolidated financial statements and notes included in the Registrants
2003 Annual Report to Shareholders. Total debt of the Registrant (parent only) consists of the following: DECEMBER 31,2003
    
    2002Short - Term Bank Borrowings
    
    $
    30,000,000
    
    
    $
    39,000,000Commercial Paper
    
    
    3,625,000
    
    
    
    4,238,000Mortgage Notes:6.83% - Due December 20, 2005
    
    
    15,653,000
    
    
    
    16,463,000Total Debt
    
    $
    49,278,000
    
    
    $
    59,701,000
 See Notes 7 and 8 to the consolidated financial statements included in the 2003 Annual
Report to Shareholders for further information on the Companys outstanding debt
at December 31, 2003. The amount of debt that becomes due during each of the next two years is as
follows: 2004 - $865,000; 2005 - remainder of $14,788,000. 18




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##### Table of Contents



THE MIDLAND COMPANY AND SUBSIDIARIES 
 Schedule III - Supplementary Insurance Information
For the Years Ended December 31, 2003, 2002 and 2001
(Amounts in 000s) Column A
    
    Column B
    
    Column C
    
    Column D
    
    Column E
    
    Column FFuturePolicyDeferred
    
    Benefits,
    
    
    
    
    
    Other PolicyPolicy
    
    Losses,
    
    
    
    
    
    Claims andAcquisition
    
    Claims and
    
    Unearned
    
    Benefits
    
    PremiumCost
    
    Loss Expenses
    
    Premiums
    
    Payable
    
    Revenue2003Manufactured Housing
    
    $
    49,217
    
    
    
    
    
    
    $
    180,946
    
    
    
    
    
    
    $
    324,985Other Insurance
    
    
    38,656
    
    
    
    
    
    
    
    202,923
    
    
    
    
    
    
    
    313,053Unallocated Amounts
    
    
    
    
    
    $
    204,833Inter-segment EliminationTotal
    
    $
    87,873
    
    
    $
    204,833
    
    
    $
    383,869
    
    
    $
    
    
    
    $
    638,0382002Manufactured Housing
    
    $
    57,236
    
    
    
    
    
    
    $
    198,048
    
    
    
    
    
    
    $
    325,335Other Insurance
    
    
    39,160
    
    
    
    
    
    
    
    208,263
    
    
    
    
    
    
    
    252,333Unallocated Amounts
    
    
    
    
    
    $
    164,717Inter-segment EliminationTotal
    
    $
    96,396
    
    
    $
    164,717
    
    
    $
    406,311
    
    
    $
    
    
    
    $
    577,6682001Manufactured Housing
    
    $
    70,976
    
    
    
    
    
    
    $
    233,180
    
    
    
    
    
    
    $
    318,298Other Insurance
    
    
    29,809
    
    
    
    
    
    
    
    170,675
    
    
    
    
    
    
    
    189,935Unallocated Amounts
    
    
    
    
    
    $
    148,674Inter-segment EliminationTotal
    
    $
    100,785
    
    
    $
    148,674
    
    
    $
    403,855
    
    
    $
    
    
    
    $
    508,233
   [Continued from above table, first column(s) repeated] Column A
    
    Column G
    
    Column H
    
    Column I
    
    Column J
    
    Column KBenefits,
    
    Amortization ofNet
    
    Claims, Losses
    
    Deferred Policy
    
    OtherInvestment
    
    and Settlement
    
    Acquisition
    
    Operating
    
    PremiumsIncome (1)
    
    Expenses
    
    Costs
    
    Expenses (1)
    
    Written2003Manufactured Housing
    
    $
    18,285
    
    
    $
    171,571
    
    
    $
    88,949
    
    
    $
    48,003
    
    
    $
    301,662Other Insurance
    
    
    14,716
    
    
    
    220,661
    
    
    
    88,673
    
    
    
    39,711
    
    
    
    319,597
    
    
    
    (2
    )Unallocated Amounts
    
    
    185Inter-segment Elimination
    
    
    (214
    )Total
    
    $
    32,972
    
    
    $
    392,232
    
    
    $
    177,622
    
    
    $
    87,714
    
    
    $
    621,2592002Manufactured Housing
    
    $
    19,457
    
    
    $
    185,421
    
    
    $
    94,385
    
    
    $
    48,151
    
    
    $
    290,204Other Insurance
    
    
    15,803
    
    
    
    155,594
    
    
    
    75,092
    
    
    
    32,834
    
    
    
    272,924
    
    
    
    (2
    )Unallocated Amounts
    
    
    485Inter-segment Elimination
    
    
    (290
    )Total
    
    $
    35,455
    
    
    $
    341,015
    
    
    $
    169,477
    
    
    $
    80,985
    
    
    $
    563,1282001Manufactured Housing
    
    $
    20,562
    
    
    $
    176,699
    
    
    $
    92,968
    
    
    $
    43,464
    
    
    $
    322,818Other Insurance
    
    
    14,042
    
    
    
    115,489
    
    
    
    52,809
    
    
    
    36,852
    
    
    
    206,923
    
    
    
    (2
    )Unallocated Amounts
    
    
    7Inter-segment Elimination
    
    
    (809
    )Total
    
    $
    33,802
    
    
    $
    292,188
    
    
    $
    145,777
    
    
    $
    80,316
    
    
    $
    529,741
 Notes to Schedule III:   (1)
    
    Net investment income is allocated to insurance segments based upon a combination of premium cash flow and equity data. Other operating expenses include expenses directly
related to the segments and expenses allocated to the segments based on historical usage factors.(2)
    
    Includes other property and casualty insurance and accident and health insurance from the Life insurance subsidiaries ($4,550, $1,613 and $6,636 for 2003, 2002 and 2001, respectively).


19



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##### Table of Contents



THE MIDLAND COMPANY AND SUBSIDIARIES 
 Schedule IV - Reinsurance
For the Years Ended December 31, 2003, 2002 and 2001 Column A
    
    Column B
    
    Column C
    
    Column D
    
    Column E
    
    Column FCeded to
    
    Assumed
    
    
    
    
    
    Percentage ofGross
    
    Other
    
    from Other
    
    Net
    
    Amount AssumedAmount
    
    Companies
    
    Companies
    
    Amount
    
    to Net2003Life Insurance in Force
    
    $
    935,018,000
    
    
    $
    516,467,000
    
    
    $
    59,923,000
    
    
    $
    478,474,000
    
    
    
    12.5
    %Insurance Premiums and
Other Considerations:Life and Accident and Health Insurance
    
    $
    37,371,000
    
    
    $
    23,322,000
    
    
    $
    18,000
    
    
    $
    14,067,000
    
    
    
    0.1
    %Property & Liability Insurance
    
    
    607,160,000
    
    
    
    39,355,000
    
    
    
    56,166,000
    
    
    
    623,971,000
    
    
    
    9.0
    %Total Premiums
    
    $
    644,531,000
    
    
    $
    62,677,000
    
    
    $
    56,184,000
    
    
    $
    638,038,000
    
    
    
    8.8
    %2002Life Insurance in Force
    
    $
    1,139,383,000
    
    
    $
    741,828,000
    
    
    $
    82,619,000
    
    
    $
    480,174,000
    
    
    
    17.2
    %Insurance Premiums and
Other Considerations:Life and Accident and Health Insurance
    
    $
    31,245,000
    
    
    $
    19,869,000
    
    
    $
    616,000
    
    
    $
    11,992,000
    
    
    
    5.1
    %Property & Liability Insurance
    
    
    516,532,000
    
    
    
    33,218,000
    
    
    
    82,362,000
    
    
    
    565,676,000
    
    
    
    14.6
    %Total Premiums
    
    $
    547,777,000
    
    
    $
    53,087,000
    
    
    $
    82,978,000
    
    
    $
    577,668,000
    
    
    
    14.4
    %2001Life Insurance in Force
    
    $
    942,494,000
    
    
    $
    601,866,000
    
    
    $
    79,697,000
    
    
    $
    420,325,000
    
    
    
    19.0
    %Insurance Premiums and
Other Considerations:Life and Accident and Health Insurance
    
    $
    23,968,000
    
    
    $
    14,104,000
    
    
    $
    1,150,000
    
    
    $
    11,014,000
    
    
    
    10.4
    %Property & Liability Insurance
    
    
    455,253,000
    
    
    
    28,462,000
    
    
    
    70,428,000
    
    
    
    497,219,000
    
    
    
    14.2
    %Total Premiums
    
    $
    479,221,000
    
    
    $
    42,566,000
    
    
    $
    71,578,000
    
    
    $
    508,233,000
    
    
    
    14.1
    %
 20




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##### Table of Contents



THE MIDLAND COMPANY AND SUBSIDIARIES Schedule V  Valuation and Qualifying Accounts
For the Years Ended December 31, 2003, 2002 and 2001 ADDITIONSCHARGEDBALANCE AT
    
    (CREDITED) TO
    
    
    
    
    
    BALANCEBEGINNING
    
    COSTS AND
    
    DEDUCTIONS
    
    AT ENDDESCRIPTION
    
    OF PERIOD
    
    EXPENSES
    
    (ADDITIONS)
    
    OF PERIODYEAR ENDED DECEMBER 31, 2003:Allowance For Losses
    
    $
    826,000
    
    
    $
    49,127
    
    
    $
    49,127
    (1)
    
    $
    826,000YEAR ENDED DECEMBER 31, 2002:Allowance For Losses
    
    $
    826,000
    
    
    $
    50,162
    
    
    $
    50,162
    (1)
    
    $
    826,000YEAR ENDED DECEMBER 31, 2001:Allowance For Losses
    
    $
    826,000
    
    
    $
    96,000
    
    
    $
    96,000
    (1)
    
    $
    826,000
 NOTES: (1) Accounts written off are net of recoveries. 21




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##### Table of Contents



THE MIDLAND COMPANY AND SUBSIDIARIES Schedule VI  Supplemental Information Concerning Property-Casualty Insurance Operations
For the Years Ended December 31, 2003, 2002 and 2001
(Amounts in 000s) Column A
    
    Column B
    
    Column C
    
    Column D
    
    Column E
    
    Column FReserves forDeferred
    
    Unpaid Claims
    
    Discount,Affiliation
    
    Policy
    
    and Claim
    
    if any,with
    
    Acquisition
    
    Adjustment
    
    Deducted in
    
    Unearned
    
    EarnedRegistrant
    
    Costs
    
    Expenses
    
    Column C
    
    Premiums
    
    PremiumsConsolidated
Property-Casualty
Subsidiaries2003
    
    $
    78,749
    
    
    $
    192,278
    
    
    $
    
    
    
    $
    334,189
    
    
    $
    623,9762002
    
    $
    88,030
    
    
    $
    154,099
    
    
    $
    
    
    
    $
    333,810
    
    
    $
    565,6762001
    
    $
    91,098
    
    
    $
    140,777
    
    
    $
    
    
    
    $
    340,505
    
    
    $
    497,219
   [Continued from above table, first column(s) repeated] Column A
    
    Column G
    
    Column H
    
    Column I
    
    Column J
    
    Column KClaims andClaimAdjustmentExpensesIncurred
    
    AmortizationRelated to
    
    of Deferred
    
    Paid ClaimsAffiliation
    
    Net
    
    
    
    Policy
    
    and Claimwith
    
    Investment
    
    Current
    
    Prior
    
    Acquisition
    
    Adjustment
    
    PremiumsRegistrant
    
    Income
    
    Year
    
    Years
    
    Costs
    
    Expenses
    
    WrittenConsolidated
Property-Casualty
Subsidiaries2003
    
    $
    30,051
    
    
    $
    374,580
    
    
    $
    12,031
    
    
    $
    173,155
    
    
    $
    352,717
    
    
    $
    616,7092002
    
    $
    31,883
    
    
    $
    343,600
    
    
    $
    (8,371
    )
    
    $
    165,195
    
    
    $
    322,503
    
    
    $
    561,5152001
    
    $
    31,380
    
    
    $
    291,502
    
    
    $
    (4,179
    )
    
    $
    142,983
    
    
    $
    279,487
    
    
    $
    523,105
 Note: Certain amounts above will not agree with Schedule III because other insurance amounts in Schedule III include life and accident and health insurance. 22