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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 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, 2004 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 þ       No o 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. o Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange
Act Rule 12b-2 of the Act). Yes þ       No o 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, 2004
was $556,419,000 based on a closing price of $29.65 per share. As of March 3, 2005, 18,859,175 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, 2004 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 28, 2005 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 ProceduresITEM 9B. Other InformationPART 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 SchedulesSIGNATURESEX-13EX-21EX-31.1EX-31.2EX-32    Table of Contents  THE MIDLAND COMPANY
FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2004 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, but are not limited to, 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
2005 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 20 through 31 and 46
and 47 (Note 19) of its 2004 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 1,138 at December 31, 2004. Property and Casualty Loss Reserves
Midland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 loss 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. 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 2




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these estimates to the recorded reserves and adjusts the
reserves as necessary. The adjustments are reflected in current operations. The principal 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 is set forth in footnote 12 on
page 42 of the 2004 Annual Report and is hereby incorporated by reference herein. This
table is further discussed in Managements Discussion and Analysis on page 23 of the 2004
Annual Report and is incorporated by reference herein. Analysis of Loss and LAE Reserve Development The table on the next page presents the development of Midlands property and casualty
insurance subsidiaries estimated liability for the ten years prior to 2004. 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 2004. For example, the 2000 reserve of
$95,022,000 has been re-estimated as of year-end 2004 to be $91,428,000, indicating a
redundancy of $3,594,000. 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, 2004, the Company had paid $82,226,000 of the currently estimated
$91,428,000 of losses and LAE that had been incurred as of the end of 2000; thus an
estimated $9,202,000 of losses incurred as of the end of 2000 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 2000 column include amounts
related to 2000 and all prior years. The unfavorable reserve development of $8.9 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, which Midland exited in September
2001, and to a lesser extent, the motorcycle product. Due to this adverse development,
Midland strengthened its commercial liability reserves in 2003 and experienced favorable
reserve development in 2004 for its commercial liability runoff. This strengthening,
combined with favorable reserve development relative to several other property and
casualty lines of business, resulted in a favorable reserve development of $17.5 million
in 2004 relative to the reserves outstanding at December 31, 2003. 3




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Analysis of Loss and Loss Adjustment Expense Development
(Amounts in 000s) December 31
    
    1994
    
    
    1995
    
    
    1996
    
    
    1997
    
    
    1998
    
    
    1999
    
    
    2000
    
    
    2001
    
    
    2002
    
    
    2003
    
    
    2004Reserve for Unpaid Losses,
net of reinsurance
    
    $
    37,481
    
    
    $
    47,712
    
    
    $
    64,784
    
    
    $
    81,901
    
    
    $
    88,267
    
    
    $
    89,325
    
    
    $
    95,022
    
    
    $
    102,858
    
    
    $
    115,584
    
    
    $
    149,478
    
    
    $
    166,302Net Reserve Re-estimated as of:One Year Later
    
    
    30,134
    
    
    
    51,483
    
    
    
    70,014
    
    
    
    79,781
    
    
    
    78,089
    
    
    
    82,373
    
    
    
    90,843
    
    
    
    94,487
    
    
    
    127,615
    
    
    
    131,927Two Years Later
    
    
    32,074
    
    
    
    53,467
    
    
    
    67,310
    
    
    
    77,148
    
    
    
    77,774
    
    
    
    80,928
    
    
    
    90,613
    
    
    
    101,466
    
    
    
    124,498Three Years Later
    
    
    31,880
    
    
    
    52,418
    
    
    
    66,442
    
    
    
    76,110
    
    
    
    76,477
    
    
    
    80,620
    
    
    
    91,885
    
    
    
    100,727Four Years Later
    
    
    31,734
    
    
    
    51,688
    
    
    
    66,060
    
    
    
    76,620
    
    
    
    76,833
    
    
    
    81,569
    
    
    
    91,428Five Years Later
    
    
    31,155
    
    
    
    51,087
    
    
    
    65,674
    
    
    
    76,359
    
    
    
    76,276
    
    
    
    82,136Six Years Later
    
    
    31,130
    
    
    
    51,298
    
    
    
    66,702
    
    
    
    76,592
    
    
    
    77,082Seven Years Later
    
    
    31,113
    
    
    
    51,543
    
    
    
    66,970
    
    
    
    77,192Eight Years Later
    
    
    31,228
    
    
    
    51,826
    
    
    
    67,043Nine Years Later
    
    
    31,339
    
    
    
    52,220Ten Years Later
    
    
    31,061Net Cumulative
Redundancy/(Deficiency)
    
    $
    6,420
    
    
    $
    (4,508
    )
    
    $
    (2,259
    )
    
    $
    4,709
    
    
    $
    11,185
    
    
    $
    7,189
    
    
    $
    3,594
    
    
    $
    2,131
    
    
    $
    (8,914
    )
    
    $
    17,551
    
    
    $
    Cumulative Amount of Reserve Paid,
Net of Reinsurance Through:One Year Later
    
    $
    19,040
    
    
    $
    31,471
    
    
    $
    37,307
    
    
    $
    42,795
    
    
    $
    40,785
    
    
    $
    43,532
    
    
    $
    52,634
    
    
    $
    54,160
    
    
    $
    70,986
    
    
    $
    68,120Two Years Later
    
    
    26,471
    
    
    
    41,785
    
    
    
    51,461
    
    
    
    57,677
    
    
    
    55,959
    
    
    
    57,381
    
    
    
    66,936
    
    
    
    70,997
    
    
    
    90,449Three Years Later
    
    
    29,237
    
    
    
    47,434
    
    
    
    58,716
    
    
    
    65,610
    
    
    
    63,511
    
    
    
    65,654
    
    
    
    75,447
    
    
    
    81,958Four Years Later
    
    
    30,425
    
    
    
    49,596
    
    
    
    61,913
    
    
    
    69,376
    
    
    
    67,707
    
    
    
    71,261
    
    
    
    82,226Five Years Later
    
    
    30,770
    
    
    
    50,051
    
    
    
    63,728
    
    
    
    71,621
    
    
    
    70,683
    
    
    
    76,398Six Years Later
    
    
    30,846
    
    
    
    50,685
    
    
    
    64,363
    
    
    
    73,237
    
    
    
    72,982Seven Years Later
    
    
    30,971
    
    
    
    50,886
    
    
    
    65,066
    
    
    
    74,346Eight Years Later
    
    
    31,014
    
    
    
    51,254
    
    
    
    65,813Nine Years Later
    
    
    31,061
    
    
    
    51,674Ten Years Later
    
    
    31,061Net Reserve - December 31
    
    
    
    
    
    $
    47,712
    
    
    $
    64,784
    
    
    $
    81,901
    
    
    $
    88,267
    
    
    $
    89,325
    
    
    $
    95,022
    
    
    $
    102,858
    
    
    $
    115,584
    
    
    $
    149,478
    
    
    $
    166,302Reinsurance Recoverables
    
    
    
    
    
    
    13,785
    
    
    
    24,208
    
    
    
    26,433
    
    
    
    20,430
    
    
    
    24,114
    
    
    
    16,720
    
    
    
    19,309
    
    
    
    16,119
    
    
    
    20,453
    
    
    
    31,364Gross Reserve-December 31
    
    
    
    
    
    $
    61,497
    
    
    $
    88,992
    
    
    $
    108,334
    
    
    $
    108,697
    
    
    $
    113,439
    
    
    $
    111,742
    
    
    $
    122,167
    
    
    $
    131,703
    
    
    $
    169,931
    
    
    $
    197,666Net Re-estimated Reserve
    
    
    
    
    
    $
    52,220
    
    
    $
    67,043
    
    
    $
    77,192
    
    
    $
    77,082
    
    
    $
    82,136
    
    
    $
    91,428
    
    
    $
    100,727
    
    
    $
    124,498
    
    
    $
    131,927Re-estimated Reinsurance
    
    
    
    
    
    $
    15,087
    
    
    $
    25,052
    
    
    $
    24,913
    
    
    $
    17,842
    
    
    $
    22,173
    
    
    $
    16,088
    
    
    $
    18,904
    
    
    $
    17,362
    
    
    $
    18,058Gross Re-estimated Reserve
    
    
    
    
    
    $
    67,307
    
    
    $
    92,095
    
    
    $
    102,105
    
    
    $
    94,924
    
    
    $
    104,309
    
    
    $
    107,516
    
    
    $
    119,631
    
    
    $
    141,860
    
    
    $
    149,985Gross Cumulative
Redundancy/(Deficiency)
    
    
    
    
    
    $
    (5,810
    )
    
    $
    (3,103
    )
    
    $
    6,229
    
    
    $
    13,773
    
    
    $
    9,130
    
    
    $
    4,226
    
    
    $
    2,536
    
    
    $
    (10,157
    )
    
    $
    19,946
 4




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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 $413.5 million in 2004 which represents 57% of the total property and
casualty gross written premium for the year.ReinsuranceIn order to limit its exposure to certain levels of risks, the Company cedes varying
portions of its written premiums to other insurance companies. As such, the Company
limits its loss exposure to that portion of the insurable risk it retains. In addition,
the Company pays a percentage of earned premiums to reinsurers in return for coverage
against catastrophic losses. However, if a reinsurer fails to honor its obligations,
American Modern could suffer additional losses as the reinsurance contracts do not
relieve American Modern of its obligations to policyholders.American Modern and its independent reinsurance broker regularly conduct market
security evaluations of both its current and prospective reinsurers. Such evaluations
include a complete review of each reinsurers financial condition along with an
assessment of credit risk concentrations arising from similar geographic regions,
activities or economic characteristics of the reinsurers to minimize its exposure to
significant losses from reinsurer insolvencies. The specific evaluation procedures
include, but are not limited to, reviewing the periodic financial statements and ratings
assigned to each reinsurer from rating agencies such as S&P, Moodys and A.M. Best.
During 2004, more than 85% of the Companys catastrophe reinsurers had an A.M. Best or
S&P rating of A or higher.In addition, American Modern may, in some cases, require reinsurers to establish trust
funds and maintain letters of credit to further minimize possible exposures. As of
December 31, 2004, American Modern was owed $9.6 million from reinsurers for claims that
have been paid and for which a contractual obligation to collect from a reinsurer exists.
All such amounts owed to American Modern are considered current and there is no
allowance for uncollectible accounts related to this recoverable. We do not believe
there is any significant concentration of credit risk arising from any single reinsurer.Significant CustomerMidlands wholly owned subsidiary, American Modern Insurance Group, receives significant
revenues from one customer, GreenTree Insurance Agency, Inc. (formerly Conseco Agency,
Inc.). In 2004 and 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 year ended December 31, 2002, the revenues related to GreenTree were $78.6 million
and represented more than 10% of Midlands consolidated revenues.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 as soon as reasonably practicable after Midland
files such reports with the SEC. 
  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. 5




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ITEM 3.
    Legal Proceedings.None. 
  ITEM 4.
    Submission of Matters to a Vote of Security Holders.None during the fourth quarter. 
 PART II 
  ITEM 5.
    Market for the Registrants Common Equity and Related Stockholder Matters. Incorporated
by reference to pages 45 and 46 (Note 17) and 50 of Midlands 2004 Annual Report to
Shareholders. The number of holders of Midlands common stock at December 31, 2004 was
approximately 2,700. 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.During 2004, the Company did not purchase any of its equity securities pursuant to a
publicly announced plan or program. However, the Company acquired 97,553 shares in
private transactions from employees in connection with its stock incentive plans during
2004. Such transactions essentially accommodate employees funding requirements of the
exercise price and tax liabilities arising from the exercise or receipt of equity-based
incentive awards. Additionally, pursuant to the Companys Salaried Employees 401(k)
Savings Plan, the Company acquired 19,753 shares from the Plan during 2004. 
  ITEM 6.
    Selected Financial Data.Incorporated by reference to Six Year Financial Summary Data on pages 18 and 19 of Midlands 2004 Annual Report to
Shareholders. 
  ITEM 7.
    Managements Discussion and Analysis of Financial Condition and Results of Operations.Incorporated by reference to pages 20 through 31 of Midlands 2004 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 31 of Midlands 2004 Annual Report to Shareholders. 
  ITEM 8.
    Financial Statements and Supplementary Data.Incorporated by reference to pages 32 through 50 of Midlands 2004 Annual Report to Shareholders. 
  ITEM 9.
    Changes In and Disagreements with Accountants on Accounting and Financial Disclosures.None. 
  ITEM 9A.
    Controls and Procedures.The information required by Regulation S-K Item 308(a) and (b), including managements assessment as to the
effectiveness of internal control over financial reporting and the corresponding auditor attestation are hereby
incorporated by reference from pages 48 and 49 of Midlands 2004 Annual Report to Shareholders.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 6




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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. 
  ITEM 9B.
    Other Information.None. 
 PART III 
  ITEM 10.
    Directors and Executive Officers of the Registrant.Incorporated herein by reference from Midlands Proxy
Statement dated March 17, 2005. 
  ITEM 11.
    Executive Compensation.Incorporated herein by reference from Midlands Proxy
Statement dated March 17, 2005. 
  ITEM 12.
    Security Ownership of Certain Beneficial Owners and Management.Incorporated herein by reference from Midlands Proxy
Statement dated March 17, 2005. 
  ITEM 13.
    Certain Relationships and Related Transactions.Incorporated herein by reference from Midlands Proxy
Statement dated March 17, 2005. 
  ITEM 14.
    Principal Accounting Fees and Services.Incorporated herein by reference from Midlands Proxy
Statement dated March 17, 2005. 
 PART IV 
  ITEM 15.
    Exhibits, Financial Statement Schedules.  (a) 1.
    Financial Statements. Incorporated by reference in Part II of this report:Reports of Independent Registered Public Accounting Firm.Managements Assessment as to the Effectiveness of Internal Control over
Financial ReportingConsolidated Balance Sheets, December 31, 2004 and 2003.Consolidated Statements of Income for the Years
Ended December 31, 2004, 2003 and 2002.Consolidated Statements of Changes in Shareholders Equity
for the Years Ended December 31, 2004, 2003 and 2002.Consolidated Statements of Cash Flows for the Years Ended
December 31, 2004, 2003 and 2002.Notes to Consolidated Financial Statements.
 7




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(a) 2. Financial Statement Schedules.         Included in Part IV of this report: PageConsent of Independent Registered Public Accounting Firm
and Report on Schedules.
    
    
    12Schedule I - Summary of Investments - Other than Investments
in Related Parties - December 31, 2004
    
    
    13Schedule II - Condensed Financial Information of Registrant
    
    
    14-18Schedule III - Supplementary Insurance Information for the
Years Ended December 31, 2004, 2003 and 2002
    
    
    19Schedule IV - Reinsurance for the Years Ended
December 31, 2004, 2003 and 2002
    
    
    20Schedule V - Valuation and Qualifying Accounts for the
Years Ended December 31, 2004, 2003 and 2002
    
    
    21Schedule VI - Supplemental Information Concerning Property -
Casualty Insurance Operations for the Years Ended
December 31, 2004, 2003 and 2002
    
    
    22
  (b)  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.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 as Exhibit 10.4 to the
Registrants Form 10-K for the year ended December 31, 2003
and incorporated herein by reference.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, 8




---



##### Table of Contents



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.
    2004 Annual Report to Shareholders  filed herewith. Only portions of the 2004 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 2004 Annual Report is expressly not incorporated
herein by reference.21.
    Subsidiaries of the Registrant  filed herewith.23.
    Consent of Independent Registered Public Accounting Firm  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 1934.31.2
    Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.32.
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. § 1350.   *
    
    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 11, 2005/s/ John W. Hayden

                  (John W. Hayden)
    
    President and
Chief Executive Officer
    
    March 11, 2005/s/ John I. Von Lehman

                 (John I. Von Lehman)
    
    Executive Vice President,
Chief Financial and
Accounting Officer
and Secretary
    
    March 11, 2005
 10




---



##### 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 11, 2005/s/ James H. Carey

     (James H. Carey)
    
    Director
    
    March 11, 2005/s/ Michael J. Conaton

     (Michael J. Conaton)
    
    Director
    
    March 11, 2005/s/ Jerry A. Grundhofer

     (Jerry A. Grundhofer)
    
    Director
    
    March 11, 2005/s/ J. P. Hayden, Jr.

     (J. P. Hayden, Jr.)
    
    Chairman of the Executive
Committee of the Board
and Director
    
    March 11, 2005/s/ J. P. Hayden III

     (J. P. Hayden III)
    
    Chairman of the Board,
Chief Operating Officer
and Director
    
    March 11, 2005/s/ John W. Hayden

     (John W. Hayden)
    
    President, Chief Executive
Officer and Director
    
    March 11, 2005/s/ William T. Hayden

     (William T. Hayden)
    
    Director
    
    March 11, 2005/s/ William J. Keating, Jr.

     (William J. Keating, Jr.)
    
    Director
    
    March 11, 2005/s/ John R. LaBar

     (John R. LaBar)
    
    Director
    
    March 11, 2005/s/ Richard M. Norman

     (Richard M. Norman)
    
    Director
    
    March 11, 2005/s/ David B. OMaley

     (David B. OMaley)
    
    Director
    
    March 11, 2005/s/ John M. OMara

     (John M. OMara)
    
    Director
    
    March 11, 2005/s/ Glenn E. Schembechler

     (Glenn E. Schembechler)
    
    Director
    
    March 11, 2005/s/ Francis Marie Thrailkill, OSU Ed.D.

     (Francis Marie Thrailkill, OSU Ed.D.)
    
    Director
    
    March 11, 2005/s/ John I. Von Lehman

     (John I. Von Lehman)
    
    Executive Vice President,
Chief Financial and Accounting
Officer, Secretary and Director
    
    March 11, 2005
 11




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##### Table of Contents



CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND REPORT ON SCHEDULES To the Shareholders of The Midland Company: We consent to the incorporation by reference in Registration Statements Nos. 33-64821, 333-109867,
333-115354 and 333-115355 on Form S-3 and Nos. 33-48511, 333-40560 and 333-101390 on Form S-8 of
The Midland Company of our reports dated March 1, 2005 relating to the consolidated financial
statements of The Midland Company (the Company) and managements report on the effectiveness of
internal control over financial reporting (which reports express an unqualified opinion and include
an explanatory paragraph related to the adoption on January 1, 2002 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, 2004. 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 11, 2005
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, 2004 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
    
    $
    101,859,000
    
    
    $
    104,019,000
    
    
    $
    104,019,000States, municipalities and political subdivisions
    
    
    231,450,000
    
    
    
    240,262,000
    
    
    
    240,262,000Mortgage-backed securities
    
    
    181,083,000
    
    
    
    183,174,000
    
    
    
    183,174,000Foreign governments
    
    
    263,000
    
    
    
    293,000
    
    
    
    293,000Public utilities
    
    
    10,269,000
    
    
    
    11,046,000
    
    
    
    11,046,000All other corporate bonds
    
    
    171,074,000
    
    
    
    182,329,000
    
    
    
    182,329,000Total
    
    
    695,998,000
    
    
    
    721,123,000
    
    
    
    721,123,000Equity securities, available-for-sale:Common stocks:Public utilities
    
    
    992,000
    
    
    
    1,032,000
    
    
    
    1,032,000Banks, trusts and insurance companies
    
    
    13,412,000
    
    
    
    90,286,000
    
    
    
    90,286,000Industrial, miscellaneous and all other
    
    
    66,816,000
    
    
    
    79,654,000
    
    
    
    79,654,000Embedded derivatives
    
    
    2,451,000
    
    
    
    2,451,000
    
    
    
    2,451,000Nonredeemable preferred stocks
    
    
    25,233,000
    
    
    
    26,429,000
    
    
    
    26,429,000Total
    
    
    108,904,000
    
    
    
    199,852,000
    
    
    
    199,852,000Accrued interest and dividends
    
    
    9,421,000
    
    
    XXXXXXX
    
    
    9,421,000Mortgage loans on real estate
    
    
    5,800,000
    
    
    XXXXXXX
    
    
    5,800,000Short-term investments
    
    
    35,242,000
    
    
    XXXXXXX
    
    
    35,242,000Total Investments
    
    $
    855,365,000
    
    
    XXXXXXX
    
    $
    971,438,000
 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, 2004 and 2003 2004
    
    
    2003ASSETSCash
    
    $
    169,000
    
    
    $
    36,000Marketable Securities Available
for Sale (at market value):Fixed Income (cost, $19,830,000 in 2004
and $118,000 in 2003)
    
    
    20,759,000
    
    
    
    118,000Equity (cost, $14,578,000 in 2004
and $368,000 in 2003)
    
    
    19,646,000
    

    
    
    3,812,000Total
    
    
    40,405,000
    
    
    
    3,930,000Receivables - Net
    
    
    11,361,000
    
    
    
    11,094,000Intercompany Receivables
    
    
    1,165,000
    
    
    
    Property, Plant and Equipment (at cost):
    
    
    33,692,000
    
    
    
    37,394,000Less Accumulated Depreciation
    
    
    8,969,000
    
    
    
    11,897,000Net
    
    
    24,723,000
    
    
    
    25,497,000Other Assets
    
    
    11,278,000
    
    
    
    9,833,000Investments in Subsidiaries (at equity)
    
    
    420,187,000
    
    
    
    367,846,000Total Assets
    
    $
    509,288,000
    
    
    $
    418,236,000
 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, 2004 and 2003 2004
    
    
    2003LIABILITIES AND SHAREHOLDERS EQUITYNotes Payable Within One Year:Banks (including current portion of long-term debt)
    
    $
    43,788,000
    
    
    $
    30,865,000Commercial Paper
    
    
    4,177,000
    
    
    
    3,625,000Total
    
    
    47,965,000
    
    
    
    34,490,000Other Payables and Accruals
    
    
    5,047,000
    
    
    
    3,398,000Intercompany Payables
    
    
    
    
    
    
    9,502,000Long - Term Debt
    
    
    
    
    
    
    14,788,000Junior Subordinated Debt
    
    
    24,000,000
    
    
    
    Shareholders Equity:Common Stock
- No Par (issued and outstanding:18,807,000 shares at December 31, 2004 and
17,643,000 shares at December 31, 2003 after
deducting treasury stock of 4,199,000 shares
and 4,213,000 shares, respectively)
    
    
    959,000
    
    
    
    911,000Additional
Paid - in Capital
    
    
    51,184,000
    
    
    
    23,406,000Retained Earnings
    
    
    350,141,000
    
    
    
    299,752,000Accumulated Other Comprehensive Income
    
    
    73,027,000
    
    
    
    73,455,000Treasury Stock (at cost)
    
    
    (43,035,000
    )
    
    
    (41,442,000
    )Unvested Restricted Stock Awards
    
    
    
    
    
    
    (24,000
    )Total
    
    
    432,276,000
    
    
    
    356,058,000Total Liabilities and Shareholders Equity
    
    $
    509,288,000
    
    
    $
    418,236,000
 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, 2004, 2003 and 2002 2004
    
    
    2003
    
    
    2002Revenues:Net Investment Income
    
    $
    1,546,000
    
    
    $
    307,000
    
    
    $
    444,000Net Realized Investment Gains
    
    
    43,000
    
    
    
    
    
    
    
    Dividends from Subsidiaries
    
    
    275,000
    
    
    
    175,000
    
    
    
    All Other Income, Primarily Charges
to Subsidiaries
    
    
    5,416,000
    
    
    
    5,510,000
    
    
    
    5,509,000Total Revenues
    
    
    7,280,000
    
    
    
    5,992,000
    
    
    
    5,953,000Expenses:Interest Expense
    
    
    2,660,000
    
    
    
    1,881,000
    
    
    
    2,410,000Depreciation and Amortization
    
    
    850,000
    
    
    
    1,130,000
    
    
    
    1,125,000All Other Expenses
    
    
    4,894,000
    
    
    
    3,384,000
    
    
    
    3,275,000Total Expenses
    
    
    8,404,000
    
    
    
    6,395,000
    
    
    
    6,810,000Loss Before Federal Income Tax Benefit
    
    
    (1,124,000
    )
    
    
    (403,000
    )
    
    
    (857,000
    )Federal Income Tax Benefit
    
    
    (934,000
    )
    
    
    (529,000
    )
    
    
    (340,000
    )Income (Loss) Before Change in
Undistributed Income of Subsidiaries
    
    
    (190,000
    )
    
    
    126,000
    
    
    
    (517,000
    )Change in Undistributed Income of Subsidiaries
    
    
    54,428,000
    
    
    
    23,150,000
    
    
    
    19,358,000Net Income
    
    $
    54,238,000
    
    
    $
    23,276,000
    
    
    $
    18,841,000
 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, 2004, 2003 and 2002 2004
    
    
    2003
    
    
    2002Cash Flows from Operating Activities:Net income
    
    $
    54,238,000
    
    
    $
    23,276,000
    
    
    $
    18,841,000Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Increase in undistributed income
of subsidiaries
    
    
    (54,428,000
    )
    
    
    (23,150,000
    )
    
    
    (19,358,000
    )Increase in other assets
    
    
    (1,445,000
    )
    
    
    (2,116,000
    )
    
    
    (74,000
    )Depreciation and amortization
    
    
    851,000
    
    
    
    1,130,000
    
    
    
    1,125,000Decrease (increase) in receivables
    
    
    847,000
    
    
    
    4,149,000
    
    
    
    (2,640,000
    )Increase (decrease) in other payables and accruals
    
    
    629,000
    
    
    
    426,000
    
    
    
    (1,195,000
    )Other - net
    
    
    (481,000
    )
    
    
    27,000
    
    
    
    Net Cash Provided by (Used in)
Operating Activities
    
    
    211,000
    
    
    
    3,742,000
    
    
    
    (3,301,000
    )Cash Flows from Investing Activities:Purchase of marketable securities
    
    
    (35,636,000
    )
    
    
    
    
    
    
    Sale of marketable securities
    
    
    2,139,000
    
    
    
    
    
    
    
    Acquisition of property, plant and equipment

    
    
    (147,000
    )
    
    
    (20,000
    )
    
    
    (69,000
    )Decrease (increase) in cash equivalent
marketable securities
    
    
    99,000
    
    
    
    150,000
    
    
    
    (100,000
    )Sale of
property, plant and equipment - net
    
    
    51,000
    
    
    
    16,000
    
    
    
    13,000Net Cash Provided by (Used in)
Investing Activities
    
    
    (33,494,000
    )
    
    
    146,000
    
    
    
    (156,000
    )Cash Flows from Financing Activities:Proceeds from issuance of common stock
    
    
    25,070,000
    
    
    
    
    
    
    
    Issuance of junior subordinated debentures
    
    
    24,000,000
    
    
    
    
    
    
    
    Net change in intercompany accounts
    
    
    (10,667,000
    )
    
    
    8,833,000
    
    
    
    1,767,000Dividends paid
    
    
    (3,723,000
    )
    
    
    (3,281,000
    )
    
    
    (3,014,000
    )Issuance of treasury stock
    
    
    2,967,000
    
    
    
    2,015,000
    
    
    
    1,676,000Purchase of treasury stock
    
    
    (2,918,000
    )
    
    
    (1,133,000
    )
    
    
    (3,893,000
    )Decrease in long-term debt
    
    
    (865,000
    )
    
    
    (810,000
    )
    
    
    (756,000
    )Increase
(decrease) in short - term borrowings
    
    
    (448,000
    )
    
    
    (9,613,000
    )
    
    
    7,716,000Net Cash Provided by (Used in)
Financing Activities
    
    
    33,416,000
    
    
    
    (3,989,000
    )
    
    
    3,496,000Net Increase (Decrease) in Cash
    
    
    133,000
    
    
    
    (101,000
    )
    
    
    39,000Cash at Beginning of Year
    
    
    36,000
    
    
    
    137,000
    
    
    
    98,000Cash at End of Year
    
    $
    169,000
    
    
    $
    36,000
    
    
    $
    137,000
 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, 2004 and 2003 The accompanying condensed financial information should be read in conjunction
with the consolidated financial statements and notes included in the Registrants
2004 Annual Report to Shareholders. Total debt of the Registrant (parent only) consists of the following: DECEMBER 31,2004
    
    
    2003Short - Term Bank Borrowings
    
    $
    29,000,000
    
    
    $
    30,000,000Commercial Paper
    
    
    4,177,000
    
    
    
    3,625,000Mortgage Notes:6.83% - Due December 20, 2005
    
    
    14,788,000
    
    
    
    15,653,000Junior Subordinated Debt:5.79%** - Due April 29, 2034
    
    
    12,000,000
    
    
    
    5.86%** - Due May 26, 2034
    
    
    12,000,000
    
    
    
    Total Debt
    
    $
    71,965,000
    
    
    $
    49,278,000
   **
    
    Rate in effect at December 31, 2004. Rate is the LIBOR rate plus 3.50% and is adjusted
every three months. See Notes 7, 8 and 9 to the consolidated financial statements included in the 2004 Annual
Report to Shareholders for further information on the Companys outstanding debt
at December 31, 2004. The mortgage note of $14,788,000 is all due in 2005 and the total junior subordinated debt of
$24,000,000 is not due until 2034. 18




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##### Table of Contents



THE MIDLAND COMPANY AND SUBSIDIARIESSchedule III - Supplementary Insurance Information
For the Years Ended December 31, 2004, 2003 and 2002
(Amounts in 000s) Column A
    
    Column B
    
    
    Column C
    
    
    Column D
    
    
    Column E
    
    
    Column F
    
    
    Column G
    
    
    Column H
    
    
    Column I
    
    
    Column J
    
    
    Column KFuturePolicyDeferred
    
    
    Benefits,
    
    
    
    
    
    
    Other Policy
    
    
    
    
    
    
    
    
    
    
    Benefits,
    
    
    Amortization ofPolicy
    
    
    Losses,
    
    
    
    
    
    
    Claims and
    
    
    
    
    
    
    Net
    
    
    Claims, Losses
    
    
    Deferred Policy
    
    
    OtherAcquisition
    
    
    Claims and
    
    
    Unearned
    
    
    Benefits
    
    
    Premium
    
    
    Investment
    
    
    and Settlement
    
    
    Acquisition
    
    
    Operating
    
    
    PremiumsCost
    
    
    Loss Expenses
    
    
    Premiums
    
    
    Payable
    
    
    Revenue
    
    
    Income (1)
    
    
    Expenses
    
    
    Costs
    
    
    Expenses (1)
    
    
    Written2004Personal Lines Property
    
    $
    59,856
    
    
    $
    47,052
    
    
    $
    228,935
    
    
    
    
    
    
    $
    400,929
    
    
    $
    19,120
    
    
    $
    201,414
    
    
    $
    111,910
    
    
    $
    64,922
    
    
    $
    398,525Personal Lines Casualty
    
    
    12,653
    
    
    
    33,590
    
    
    
    52,845
    
    
    
    
    
    
    
    119,147
    
    
    
    6,107
    
    
    
    67,180
    
    
    
    29,261
    
    
    
    26,107
    
    
    
    109,565Financial Services
    
    
    10,661
    
    
    
    12,004
    
    
    
    36,123
    
    
    
    
    
    
    
    86,803
    
    
    
    3,615
    
    
    
    42,834
    
    
    
    35,218
    
    
    
    5,375
    
    
    
    99,230All Other Insurance
    
    
    7,253
    
    
    
    53,669
    
    
    
    72,544
    
    
    
    
    
    
    
    70,705
    
    
    
    6,902
    
    
    
    37,183
    
    
    
    24,766
    
    
    
    12,132
    
    
    
    69,434
    (2)Unallocated Amounts
    
    
    
    
    
    
    86,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,718Inter-segment Elimination
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (297
    )Total
    
    $
    90,423
    
    
    $
    232,915
    
    
    $
    390,447
    
    
    $
    
    
    
    $
    677,584
    
    
    $
    37,165
    
    
    $
    348,611
    
    
    $
    201,155
    
    
    $
    108,536
    
    
    $
    676,7542003Personal Lines Property
    
    $
    63,027
    
    
    $
    43,717
    
    
    $
    226,607
    
    
    
    
    
    
    $
    407,816
    
    
    $
    18,330
    
    
    $
    230,636
    
    
    $
    111,326
    
    
    $
    54,819
    
    
    $
    383,255Personal Lines Casualty
    
    
    16,015
    
    
    $
    31,341
    
    
    
    62,429
    
    
    
    
    
    
    
    117,568
    
    
    
    5,230
    
    
    
    84,943
    
    
    
    28,182
    
    
    
    23,351
    
    
    
    124,501Financial Services
    
    
    6,535
    
    
    $
    5,814
    
    
    
    23,439
    
    
    
    
    
    
    
    52,420
    
    
    
    2,527
    
    
    
    26,181
    
    
    
    18,347
    
    
    
    3,622
    
    
    
    60,790All Other Insurance
    
    
    2,296
    
    
    
    45,839
    
    
    
    71,394
    
    
    
    
    
    
    
    60,234
    
    
    
    6,914
    
    
    
    50,472
    
    
    
    19,767
    
    
    
    5,922
    
    
    
    52,713
    (2)Unallocated Amounts
    
    
    
    
    
    
    78,122
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    494Inter-segment Elimination
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (216
    )Total
    
    $
    87,873
    
    
    $
    204,833
    
    
    $
    383,869
    
    
    $
    
    
    
    $
    638,038
    
    
    $
    33,279
    
    
    $
    392,232
    
    
    $
    177,622
    
    
    $
    87,714
    
    
    $
    621,2592002Personal Lines Property
    
    $
    74,311
    
    
    $
    42,200
    
    
    $
    244,229
    
    
    
    
    
    
    $
    386,418
    
    
    $
    21,535
    
    
    $
    230,654
    
    
    $
    111,850
    
    
    $
    53,634
    
    
    $
    370,652Personal Lines Casualty
    
    
    15,244
    
    
    
    14,041
    
    
    
    55,496
    
    
    
    
    
    
    
    92,584
    
    
    
    4,494
    
    
    
    56,862
    
    
    
    23,918
    
    
    
    16,204
    
    
    
    108,874Financial Services
    
    
    4,237
    
    
    
    2,448
    
    
    
    15,068
    
    
    
    
    
    
    
    40,648
    
    
    
    1,703
    
    
    
    19,844
    
    
    
    15,888
    
    
    
    3,421
    
    
    
    43,076All Other Insurance
    
    
    2,604
    
    
    
    43,412
    
    
    
    91,518
    
    
    
    
    
    
    
    58,018
    
    
    
    7,528
    
    
    
    33,655
    
    
    
    17,821
    
    
    
    7,726
    
    
    
    40,526
    (2)Unallocated Amounts
    
    

    
    
    
    $
    62,616
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    954Inter-segment Elimination
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (315
    )Total
    
    $
    96,396
    
    
    $
    164,717
    
    
    $
    406,311
    
    
    $
    
    
    
    $
    577,668
    
    
    $
    35,899
    
    
    $
    341,015
    
    
    $
    169,477
    
    
    $
    80,985
    
    
    $
    563,128
 Notes to Schedule III:  (1)
    Net investment income is allocated to insurance segments based primarily on written premium
volume. 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 ($4,770, $4,550 and $1,613 for 2004, 2003 and 2002, respectively). 19




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##### Table of Contents



THE MIDLAND COMPANY AND SUBSIDIARIES Schedule IV - Reinsurance
For the Years Ended December 31, 2004, 2003 and 2002 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 Net2004Life Insurance In Force
    
    $
    849,510,000
    
    
    $
    453,806,000
    
    
    $
    52,742,000
    
    
    $
    448,446,000
    
    
    
    11.8
    %Insurance Premiums and
Other Considerations:Life and Accident and Health Insurance
    
    $
    40,121,000
    
    
    $
    24,759,000
    
    
    $
    643,000
    
    
    $
    16,005,000
    
    
    
    4.0
    %Property & Liability Insurance
    
    
    652,819,000
    
    
    
    44,685,000
    
    
    
    53,445,000
    
    
    
    661,579,000
    
    
    
    8.1
    %Total Premiums
    
    $
    692,940,000
    
    
    $
    69,444,000
    
    
    $
    54,088,000
    
    
    $
    677,584,000
    
    
    
    8.0
    %2003Life
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
    %
 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, 2004, 2003 and 2002 ADDITIONSCHARGEDBALANCE AT
    
    
    (CREDITED) TO
    
    
    
    
    
    
    BALANCEBEGINNING
    
    
    COSTS AND
    
    
    DEDUCTIONS
    
    
    AT ENDDESCRIPTION
    
    OF PERIOD
    
    
    EXPENSES
    
    
    (ADDITIONS)
    
    
    OF PERIODYEAR ENDED DECEMBER 31, 2004:Allowance For Losses
    
    $
    826,000
    
    
    $
    43,543
    
    
    $
    43,543
    (1)
    
    $
    826,000YEAR 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)
    
    $
    826,000
 NOTES: (1) Accounts written off are net of recoveries.




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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, 2004, 2003 and 2002
(Amounts in 000s) Column A
    
    Column B
    
    
    Column C
    
    
    Column D
    
    
    Column E
    
    
    Column F
    
    
    Column G
    
    
    Column H
    
    
    Column I
    
    
    Column J
    
    
    Column KClaims andClaimAdjustmentReserves for
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expenses
    
    
    AmortizationDeferred
    
    
    Unpaid Claims
    
    
    Discount,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Incurred
    
    
    of Deferred
    
    
    Paid ClaimsAffiliation
    
    Policy
    
    
    and Claim
    
    
    if any,
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    Related to
    
    
    Policy
    
    
    and Claimwith
    
    Acquisition
    
    
    Adjustment
    
    
    Deducted in
    
    
    Unearned
    
    
    Earned
    
    
    Investment
    
    
    Current
    
    
    Prior
    
    
    Acquisition
    
    
    Adjustment
    
    
    PremiumsRegistrant
    
    Costs
    
    
    Expenses
    
    
    Column C
    
    
    Premiums
    
    
    Premiums
    
    
    Income
    
    
    Year
    
    
    Years
    
    
    Costs
    
    
    Expenses
    
    
    WrittenConsolidated
Property-
Casualty
Subsidiaries2004
    
    $
    82,361
    
    
    $
    219,370
    
    
    $
    
    
    
    $
    351,031
    
    
    $
    661,579
    
    
    $
    32,628
    
    
    $
    359,504
    
    
    $
    (17,551
    )
    

    $
    195,468
    
    
    $
    325,129
    
    
    $
    671,9852003
    
    $
    78,749
    
    
    $
    192,278
    
    
    $
    
    
    
    $
    334,189
    
    
    $
    623,976
    
    
    $
    30,051
    
    
    $
    374,580
    
    
    $
    12,031
    
    
    $
    173,155
    
    
    $
    352,717
    
    
    $
    616,7092002
    
    $
    88,030
    
    
    $
    154,099
    
    
    $
    
    
    
    $
    333,810
    
    
    $
    565,676
    
    
    $
    31,883
    
    
    $
    343,600
    
    
    $
    (8,371
    )
    
    $
    165,195
    
    
    $
    322,503
    
    
    $
    561,515