UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-K

                                ANNUAL REPORT

                      Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

                 For the Fiscal Year Ended December 31, 1998

                        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:

   Common stock - no par value.         -            American Stock Exchange

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

	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. [   ]

	The aggregate market value of the voting common stock held by
nonaffiliates, which includes shares held by executive officers and directors,
of the registrant as of March 5, 1999 was $237,966,000.

        Number of shares of common stock outstanding as of March 5, 1999 - 
9,518,639.

                     Documents Incorporated by Reference

	Annual Report to Shareholders for the year ended December 31, 1998 is 
incorporated by reference into Parts I, II and IV.

        Registrant's Proxy Statement dated March 11, 1999 is incorporated by 
reference into Parts III and IV.

                                       1 

<PAGE>

                             THE MIDLAND COMPANY

                                  FORM 10-K

                              DECEMBER 31, 1998


Certain statements contained in this report that are not historical facts
constitute forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995, and are intended to be covered by the
safe harbors created by that Act.  Reliance should not be placed on forward-
looking statements because they involve known and unknown risks, uncertainties
and other factors which may cause actual results, performance or achievements
to differ materially from those expressed or implied.  Any forward-looking
statement speaks only as of the date made.  The Midland Company undertakes no
obligation to update any forward-looking statements to reflect events or
circumstances arising after the date on which they are made.

Statements concerning expected financial performance, on-going business
strategies and possible future action which The Midland Company intends to
pursue to achieve strategic objectives constitute forward-looking
information.  Implementation of these strategies and the achievement of such
financial performance are each subject to numerous conditions, uncertainties and
risk factors.

Factors which might cause deviations from the forward looking statements
include, without limitations, the following:  1) changes in the laws or
regulations affecting the operations of the Company or any of its subsidiaries;
2) changes in the business tactics or strategies of the Company or any of its
subsidiaries; 3)acquisition(s) of assets or of new or complementary operations,
or divestiture of any segment of the existing operations of the Company or any
of its subsidiaries; 4) changing market forces or litigation which necessitate,
in Management's judgment, changes in plans, strategy or tactics of the Company
or its subsidiaries and 5) adverse weather conditions, fluctuations in the
investment markets, changes in the retail marketplace, Year 2000 related issues
or fluctuations in interest rates, any one of which might materially affect the
operations of the Company and/or its subsidiaries.

                                       2

<PAGE>

                                    PART I

ITEM 1.	Business.
        Incorporated by reference from the inside cover and pages 2 through 13
        and 33 and 34 (Note 18) of the Registrant's 1998 Annual Report to
        Shareholders.  The number of persons employed by the Registrant was
        approximately 890 at December 31, 1998.

        Property and Casualty Loss Reserves
        The Company'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.

        The Company establishes reserves for losses that have been reported to
        the Company and certain legal expenses on the "case basis" method.  The
        Company estimates claims incurred but not reported ("IBNR") and other
        adjustment expenses using statistical procedures.  The Company accrues
        salvage and subrogation recoveries using the "case basis" method for
        large claims and statistical procedures for smaller claims.

        The Company'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
        Company's reserves aggregate its 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.

        The Company reviews its 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.  The Company 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.
		
        There are no material differences between the loss and LAE liability
        reported in the accompanying consolidated financial statements in
        accordance with generally accepted accounting principles ("GAAP") and
        that reported in the annual statements filed with state insurance
        departments in accordance with statutory accounting practices ("SAP").

        The following table provides an analysis of changes in loss and LAE
        reserves for 1998, 1997 and 1996 (net of reinsurance amounts) for the
        Company.  Based on the information available during and at the end of
        1998, operations were credited $2,120,000 in 1998 as a result of a
        decrease in the estimated amounts needed to settle prior years' claims.
        Based on information available during and at the end of 1997 and 1996,
        operations were charged $5,230,000 in 1997 and $3,771,000 in 1996 as a
        result of increases in such estimates.  Such reserve adjustments, which
        affected reported results of current operations during each of the
        years, resulted from developed losses from prior years being different
        than were anticipated when the liability for losses and loss adjustment
        expense were originally estimated.  These development trends have been
        considered in establishing the current year liabilities.

                                       3

<PAGE>

Changes in Loss and LAE Reserves:
                                            (amounts in 000's)
                                     1998          1997          1996 
                                 --------------------------------------
Balance at January 1              $108,334      $ 88,992      $ 61,497
 Less reinsurance recoverables      26,433        24,208        13,785 
                                 --------------------------------------
Net balance at January 1            81,901        64,784        47,712
                                 --------------------------------------

Incurred related to:
 Current year                      208,811       163,035       166,554
 Prior years                        (2,120)        5,230         3,771   
                                 --------------------------------------
Total incurred                     206,691       168,265       170,325
                                 --------------------------------------

Paid related to:
 Current year                      157,530       113,841       121,782
 Prior years                        42,795        37,307        31,471 
                                 --------------------------------------
Total paid                         200,325       151,148       153,253
                                 --------------------------------------

Net balance at 
 December 31                        88,267        81,901        64,784
 Plus reinsurance recoverables      20,430        26,433        24,208 
                                 --------------------------------------
Balance at December 31            $108,697      $108,334      $ 88,992
                                 ======================================

        Analysis of Loss and LAE Reserve Development
        The next table presents the development of the estimated liability for
        the ten years prior to 1998.  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 at the end of claims
        arising in all prior years that were unpaid at the balance sheet date,
        including losses that had been incurred but not yet reported to the
        Company.

        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 (deficiency) developed with
        respect to the previously recorded liability for all years as of the end
        of 1998.  For example, the Company's 1990 reserve of $16,570,000 has
        been re-estimated as of year-end 1998 to be $13,579,000, indicating a
        redundancy of $2,991,000.

        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, 1998, the Company had
        paid $13,574,000 of the currently estimated $13,579,000 of losses and
        LAE that have been incurred as of the end of 1990; thus an estimated
        $5,000 of losses incurred as of the end of 1990 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 1993 column include amounts
        related to 1993 and all prior years.

        The Company's reserve development is unfavorable for 1995 and 1996 due
        to the Company's expansion into certain areas of commercial lines
        insurance.  However, reserve development is favorable for 1997 due to a
        reduction in the aforementioned commercial lines business combined with
        a strengthening of the commercial lines reserves in 1997.

                                       4

<PAGE>

<TABLE>

                               Analysis of Loss and Loss Adjustment Expense Development
                                                  (Amounts in 000s)

Year Ended
   December 31           1988     1989     1990     1991     1992     1993     1994     1995     1996     1997     1998
                       -------------------------------------------------------------------------------------------------
                       <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
Reserve for Unpaid
 Losses, Net of
 Reinsurance           $12,464  $15,732  $16,570  $19,089  $20,405  $27,744  $37,481  $47,712  $64,784  $81,901  $88,267

Net Reserve Re-estimated
  as of:
  One Year Later        11,609   15,167   15,492   17,160   18,425   25,668   30,134   51,483   70,014   79,781
  Two Years Later       11,534   15,043   14,859   15,699   18,451   22,686   32,074   53,467   67,310
  Three Years Later     11,292   14,397   13,841   15,202   16,871   21,154   31,880   52,418
  Four Years Later      11,024   13,773   13,929   14,497   16,616   20,966   31,734
  Five Years Later      10,886   13,758   13,663   14,393   16,505   20,688
  Six Years Later       10,926   13,754   13,598   14,373   16,445
  Seven Years Later     10,962   13,722   13,589   14,361
  Eight Years Later     10,948   13,741   13,579
  Nine Years Later      10,967   13,732
  Ten Years Later       10,929

Net Cumulative
   Redundancy
   (Deficiency)        $ 1,535  $ 2,000  $ 2,991  $ 4,728  $ 3,960  $ 7,056  $ 5,747  $(4,706) $(2,526) $ 2,120  
                       =========================================================================================
Net Cumulative
   Amount of
   Reserve Paid
   Through:
  One Year Later       $ 8,659  $11,210  $11,117  $10,937  $11,730  $ 9,684  $19,040  $31,471  $37,307  $42,795
  Two Years Later        9,644   12,902   12,488   12,685   14,397   18,445   26,471   41,785   51,461
  Three Years Later     10,461   13,355   12,965   13,588   15,923   19,930   29,237   47,434
  Four Years Later      10,668   13,465   13,208   14,171   16,312   20,427   30,425
  Five Years Later      10,739   13,595   13,471   14,307   16,381   20,558
  Six Years Later       10,825   13,689   13,530   14,331   16,420
  Seven Years Later     10,915   13,704   13,550   14,356
  Eight Years Later     10,930   13,703   13,574
  Nine Years Later      10,929   13,727
  Ten Years Later       10,929

Net Reserve - December 31                                  $20,405  $27,744  $37,481  $47,712  $64,784 $ 81,901 $ 88,267
Reinsurance Recoverables                                     2,780    6,220   14,597   13,785   24,208   26,433   20,430
                                                           -------------------------------------------------------------
Gross Reserve-December 31                                  $23,185  $33,964  $52,078  $61,497  $88,992 $108,334 $108,697
                                                           =============================================================

Net Re-estimated Reserve                                   $16,445  $20,688  $31,734  $52,418  $67,310 $ 79,781
Re-estimated Reinsurance                                     2,240    4,638   12,359   15,145   25,152   25,742
                                                           -----------------------------------------------------
Gross Re-estimated Reserve                                 $18,685  $25,326  $44,093  $67,563  $92,462 $105,523
                                                           =====================================================

Gross Cumulative Redundancy (Deficiency)                   $ 4,500  $ 8,638  $ 7,985  $(6,066) $(3,470)$  2,811
                                                           =====================================================

</TABLE>

                                       5

<PAGE>

         Reinsurance 
         The Company reinsures certain levels of risk with other insurance
         companies and cedes varying portions of its written premiums to such
         reinsurers.  In addition, the Company pays a percentage of earned
         premiums to reinsurers in return for coverage against catastrophic
         losses.  To the Company's knowledge, none of its reinsurers are
         experiencing financial difficulties.  Furthermore, the Company monitors
         concentrations of credit risk arising from similar geographic regions,
         activities or economic characteristics of the reinsurers to minimize
         its exposure to significant losses from reinsurer insolvencies.  The
         composition of its reinsurers has not changed significantly in recent
         years.  The Company has not experienced any uncollectible reinsurance
         amounts or coverage disputes with its reinsurers in over ten years.  As
         indicated in Management's Discussion and Analysis of Financial
         Condition and Results of Operations, for 1998, the Company decided to
         cede less business to it reinsurers than in prior years.  This was
         significantly accomplished by a change in a quota share reinsurance
         contract for manufacturing housing insurance.  The related terms were
         changed, applicable with business written in 1998, from 25% of written
         premium with a maximum of $50 million to 12.5% with a maximum of
         $25 million.

         Significant Customer
         As indicated in Note 18 to the Company's 1998 consolidated financial
         statements, in 1998 and 1997, respectively, revenues (including amounts
         that are ultimately ceded to reinsurers) from one customer amounted to
         $61,865,000 and $41,011,000.  That customer is Greentree Financial
         Corporation.
        
ITEM 2.  Properties.
         The Company owns its 275,000 square foot principal offices located in
         Amelia, Ohio.  The Company's insurance subsidiaries lease office space
         in Montgomery, Alabama, St. Louis, Missouri and Clearwater, Florida and
         the Company's transportation subsidiaries lease offices in Metairie,
         Louisiana.  The Company owns a 292,000 square foot manufacturing,
         warehouse and office facility which it leases to a non-affiliated third
         party.

ITEM 3.  Legal Proceedings.
         Reference is made to Item 3 of the December 31, 1995 Registrant's Form
         10-K concerning criminal litigation against M/G Transport Services,
         Inc., a subsidiary of the Registrant.  Upon Motion, the Court dismissed
         six of the remaining eight counts against M/G, four of the six
         remaining counts against one former employee and all of the remaining
         counts against two former employees.  The United States has appealed.
         The Sixth Circuit Court of Appeals heard oral agreements on the appeal
         by the United States in January, 1999 and has not yet rendered an
         opinion.  On October 31, 1997, M/G was fined $250,000 and placed on
         two years' probation on the two remaining counts.  The Company does not
         expect any additional fines unless the United States is successful in
         its appeal.

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 Stock and Related Security Holder
         Matters.  Incorporated by reference to pages 33 (Note 17) and 36 of the
         Registrant's 1998 Annual Report to Shareholders.  The number of holders
         of the Company's common stock at December 31, 1998 was approximately
         1,350.  The Company's common stock is registered on the American Stock
         Exchange (MLA).

ITEM 6.  Selected Financial Data.
         Incorporated by reference to pages 14 and 15 of the Registrant's 1998
         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 21 of the
         Registrant's 1998 Annual Report to Shareholders.

                                       6

<PAGE>

                             PART II (Continued)


ITEM 8.  Financial Statements and Supplementary Data.
         Incorporated by reference to pages 22 through 36 of the Registrant's
         1998 Annual Report to Shareholders.

ITEM 9.  Changes In and Disagreements with Accountants on Accounting and
         Financial Disclosures.
         None.

                                   PART III

ITEM 10. Directors and Executive Officers of the Registrant.
         Incorporated by reference to the Registrant's Proxy Statement dated
         March 11, 1999.

         Executive Officers of the Company - 

         J. P. Hayden, Jr.    - Age 69 - Chairman of the Executive Committee of
                                          the Board
         Michael J. Conaton   - Age 65 - Vice Chairman
         J. P. Hayden, III    - Age 46 - Chairman and Chief Operating Officer
         John W. Hayden       - Age 41 - President and Chief Executive Officer
         John I. Von Lehman   - Age 46 - Executive Vice President, Chief
                                          Financial Officer and Secretary
         Kurt R. Schwamberger - Age 52 - Senior Vice President
         Paul T. Brizzolara   - Age 41 - Senior Vice President and Chief
                                          Legal Officer
         W. Todd Gray         - Age 31 - Treasurer

         The officers listed above have served in the positions indicated for
         the past five years (except as noted below or in the Company's proxy
         statement).

         During 1998, Kurt R. Schwamberger was elected Senior Vice President of
         The Midland Company.  Mr. Schwamberger joined the Company in 1996 as
         President and Chief Operating Officer of American Modern Insurance
         Group, Inc. (AMIG) and will continue in that position with AMIG.
         Before joining AMIG in 1996, Mr. Schwamberger held executive management
         positions in the insurance industry.  Also in 1998, Paul T. Brizzolara
         was elected Senior Vice President and Chief Legal Officer of The
         Midland Company.  Mr. Brizzolara was previously the Company's Assistant
         Vice President, Assistant Chief Counsel and Assistant Secretary of The
         Midland Company and will continue as Assistant Secretary in his new
         position.

         The Board of Directors of The Midland Company voted at their regular
         meeting on March 5, 1998 to elect the following new executive officers
         effective with the Company's Annual Shareholders' Meeting on April 9,
         1998.  Mr. J. P. Hayden, III was elected Chairman and Chief Operating
         Officer of The Midland Company.  Mr. John W. Hayden was elected
         President and Chief Executive Officer of The Midland Company.
         Mr. J. P. Hayden, Jr. was elected Chairman of the Executive Committee
         of the Board.  Mr. Michael J. Conaton was elected Vice Chairman of the
         Board and Vice Chairman of the Company.

         During 1997, W. Todd Gray was elected Treasurer.  Mr. Gray joined
         Midland in 1994 and served as Internal Audit Manager and, more
         recently, Assistant Treasurer.  Prior to that he was employed by a
         national accounting firm.

         During 1996, J. P. Hayden, III and John W. Hayden (formerly Vice
         Presidents) were elected Senior Executive Vice Presidents.  Also in
         1996, John I. Von Lehman (formerly Vice President, Treasurer and Chief
         Financial Officer) was elected Executive Vice President and Chief
         Financial Officer.

         J. P. Hayden, III and John W. Hayden are brothers and are sons of
         J. P. Hayden, Jr.

                                       7

<PAGE>

                             PART III (Continued)

ITEM 11. Executive Compensation.
         Incorporated by reference to the Registrant's Proxy Statement dated
         March 11, 1999.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
         Incorporated by reference to the Registrant's Proxy Statement dated
         March 11, 1999.

ITEM 13. Certain Relationships and Related Transactions.
         Incorporated by reference to the Registrant's Proxy Statement dated
         March 11, 1999.

                                   PART IV

ITEM 14. 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, 1998 and 1997.
                     Consolidated Statements of Income for the Years 
                        Ended December 31, 1998, 1997 and 1996.
                     Consolidated Statements of Changes in Shareholders' Equity 
                        for the Years Ended December 31, 1998, 1997 and 1996.
                     Consolidated Statements of Cash Flows for the Years Ended
                        December 31, 1998, 1997 and 1996.
                     Notes to Consolidated Financial Statements.

        (a) 2.   Financial Statement Schedules.

                 Included in Part IV of this report:
                                                                            Page
                    Independent Auditors' Consent and Report on Schedules.    12
                    Schedule I - Summary of Investments - Other Than
                      Investments in Related Parties - December 31, 1998      13
                    Schedule II - Condensed Financial Information of
                      Registrant                                           14-18
                    Schedule III - Supplementary Insurance Information
                      for the Years Ended December 31, 1998, 1997 and 1996    19
                    Schedule IV - Reinsurance for the Years Ended 
                      December 31, 1998, 1997 and 1996                        20
                    Schedule V - Valuation and Qualifying Accounts for the
                      Years Ended December 31, 1998, 1997 and 1996            21
                    Schedule VI - Supplemental Information Concerning
                      Property-Casualty Insurance Operations for the
                      Years Ended December 31, 1998, 1997 and 1996            22

                    All other schedules for which provision is made in the
                applicable accounting regulations of the Securities and
                Exchange Commission have been omitted because such 
                schedules are not required under the related instructions, 
                are inapplicable or the information is included in the
                financial statements or notes thereto.

                                       8

<PAGE>

                             PART IV (Continued)

        (a) 3.   Exhibits.

                 3.  Articles of Incorporation and Code of Regulations -
                     Filed as Exhibits 3(i) and 3(ii) to the Registrant's
                     Form 10-Q for the quarter ended June 30, 1998 and
                     incorporated herein by reference.

               10.1  The Midland Company 1992 Employee Incentive Stock
                     Plan and The Midland Company Stock Option Plan for
                     Non-Employee Directors and The Midland Company 1972
                     Stock Options Plan - Incorporated by reference to
                     Registrant's Statement 33-48511 on Form S-8.

               10.2  A description of the Company's Profit Sharing Plan,
                     Salaried Employees' Non-Qualified Savings Plan and
                     the Supplemental Retirement Plan - Incorporated by
                     reference to the Registrant's Proxy Statement dated
                     March 11, 1999.

               13.   Annual Report to security holders - Incorporated by
                     reference to the Registrant's 1998 Annual Report to
                     Shareholders.
	
               21.   Subsidiaries of the Registrant.                          23

               22.   Published Report Regarding Matters Submitted to Vote
                     of Security Holders - Incorporated by Reference to the
                     Registrant's Proxy Statement dated March 11, 1999.

               23.   Independent Auditors' Consent - Included in Consent and
                     Report on Schedules referred to under Item 14(a)2 above.

               27.   Financial Data Schedule.

        (b)      Reports on Form 8-K - None during 1998.

                                       9

<PAGE>

                                  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      Chairman of the Board and         March 5, 1999
  (J. P. Hayden, III)        Chief Operating Officer


  S/ John W. Hayden         President and                     March 5, 1999   
    (John W. Hayden)           Chief Executive Officer

  
  S/ John I. Von Lehman     Executive Vice President,         March 5, 1999
  (John I. Von Lehman)       Chief Financial and 
                             Accounting Officer
                             and Secretary

                                       10

<PAGE>

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/ George R. Baker        Director                          March 5, 1999
  (George R. Baker)
                            
  S/ James E. Bushman       Director and Member               March 5, 1999
  (James E. Bushman)         of Audit Committee

  S/ James H. Carey         Director and Member               March 5, 1999
  (James H. Carey)           of Audit Committee

  S/ Michael J. Conaton     Vice Chairman                     March 5, 1999
  (Michael J. Conaton)

  S/ Jerry A. Grundhofer    Director                          March 5, 1999
  (Jerry A. Grundhofer)

  S/ J. P. Hayden, Jr.      Chairman of the Executive         March 5, 1999
  (J. P. Hayden, Jr.)        Committee of the Board

  S/ J. P. Hayden, III      Chairman and                      March 5, 1999
  (J. P. Hayden, III)        Chief Operating Officer

  S/ John W. Hayden         President and                     March 5, 1999
  (John W. Hayden)           Chief Executive Officer

  S/ Robert W. Hayden       Director                          March 5, 1999
  (Robert W. Hayden)                

  S/ William T. Hayden      Director                          March 5, 1999
  (William T. Hayden)               

  S/ William J. Keating     Director                          March 5, 1999
  (William J. Keating)

  S/ John R. LaBar          Director                          March 5, 1999
  (John R. LaBar)

  S/ David B. O'Maley       Director                          March 5, 1999
  (David B. O'Maley)

  S/ John M. O'Mara         Director and Member               March 5, 1999
  (John M. O'Mara)           of Audit Committee

  S/ Glenn E. Schembechler  Director and Member               March 5, 1999
  (Glenn E. Schembechler)    of Audit Committee

  S/ John I. Von Lehman     Executive Vice President,         March 5, 1999
  (John I. Von Lehman)       Chief Financial and Accounting
                             Officer, Secretary and Director

                                       11

<PAGE>

INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES
-----------------------------------------------------


To the Shareholders of The Midland Company:

We consent to the incorporation by reference in Registration Statements No. 
33-64821 on Form S-3 and No. 33-48511 on Form S-8 of The Midland Company of 
our report dated February 11, 1999, 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, 
1998.

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 14(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
Cincinnati, Ohio

March 5, 1999

                                       12 

<PAGE>

<TABLE>

                                 THE MIDLAND COMPANY AND SUBSIDIARIES

                                 Schedule I - Summary of Investments
                               Other than Investments in Related Parties
                                           December 31, 1998


                Column A                                   Column B       Column C        Column D
--------------------------------------------------------------------------------------------------------
                                                                                           Amount at
                                                                                          Which Shown
                                                                                        in the Balance
            Type of Investment                               Cost           Value            Sheet
--------------------------------------------------------------------------------------------------------
                                                         <C>             <C>             <C>
Fixed maturity securities, available-for-sale:
  Bonds:
    United States Government and government
      agencies and authorities                           $170,035,000    $174,031,000    $174,031,000
    States, municipalities and political subdivisions     161,699,000     165,966,000     165,966,000
    Mortgage-backed securities                             15,422,000      15,570,000      15,570,000
    Foreign governments                                       504,000         508,000         508,000
    Public utilities                                        8,289,000       8,353,000       8,353,000
    All other corporate bonds                              53,289,000      54,258,000      54,258,000
                                                        ------------------------------------------------

        Total                                             409,238,000     418,686,000     418,686,000
                                                        ------------------------------------------------

  Equity securities, available-for-sale:
    Common stocks:
      Public utilities                                      1,044,000       1,498,000       1,498,000
      Banks, trusts and insurance companies                 5,817,000      82,243,000      82,243,000
      Industrial, miscellaneous and all other              26,584,000      48,801,000      48,801,000
      Nonredeemable preferred stocks                        4,000,000       3,914,000       3,914,000
                                                        ------------------------------------------------

        Total                                              37,445,000     136,456,000     136,456,000
                                                        ------------------------------------------------


  Accrued interest and dividends                            6,434,000       6,434,000       6,434,000
                                                        ------------------------------------------------

  Short-term investments                                   28,594,000      28,594,000      28,594,000
                                                        ------------------------------------------------

        Total Investments                                $481,711,000    $590,170,000    $590,170,000
                                                        ================================================
</TABLE>

                                       13 

<PAGE>


                      THE MIDLAND COMPANY (Parent Only)


         Schedule II - Condensed Financial Information of Registrant
                     Condensed Balance Sheet Information
                          December 31, 1998 and 1997


             ASSETS                            1998             1997
                                          -------------    -------------

Cash                                      $     96,000     $    236,000
                                          -------------    -------------

Marketable Securities Available
   for Sale (at market value):
  Fixed Income (cost, $497,000 in 1998
    and $2,427,000 in 1997)                    497,000        2,427,000
  Equity (cost, $341,000 in 1998 and
    $354,000 in 1997)                        3,937,000        2,456,000
                                          -------------    -------------
      Total                                  4,434,000        4,883,000
                                          -------------    -------------


Receivables - Net                            8,932,000        7,010,000
                                          -------------    -------------


Property, Plant and Equipment (at cost):    37,314,000       35,878,000
   Less Accumulated Depreciation             5,439,000        3,552,000
                                          -------------    -------------
      Net                                   31,875,000       32,326,000
                                          -------------    -------------


Other Real Estate - Net                      8,700,000       14,779,000
                                          -------------    -------------


Other Assets                                 4,862,000        3,720,000
                                          -------------    -------------


Investments in Subsidiaries ( at equity)   247,569,000      197,206,000
                                          -------------    -------------


      Total Assets                        $306,468,000     $260,160,000
                                          =============    =============

                                       14

<PAGE>

                      THE MIDLAND COMPANY (Parent Only)


         Schedule II - Condensed Financial Information of Registrant
                     Condensed Balance Sheet Information
                          December 31, 1998 and 1997


LIABILITIES AND SHAREHOLDERS' EQUITY           1998             1997
                                          -------------    -------------

Notes Payable Within One year:
  Banks (including current portion of
    long-term debt)                       $ 16,710,000     $ 25,425,000
  Commercial Paper                           6,522,000        5,791,000
                                          -------------    -------------
      Total                                 23,232,000       31,216,000
                                          -------------    -------------

Other payables and Accruals                  4,664,000        3,403,000
                                          -------------    -------------

Intercompany Payables                        3,469,000          501,000
                                          -------------    -------------

Long - Term Debt                            26,271,000       28,014,000
                                          -------------    -------------

Shareholders' Equity:
  Common Stock - No Par (issued and
    outstanding: 9,352,000 shares at
    December 31, 1998 and 9,334,000 shares
    at December 31, 1997 after deducting
    treasury stock of 1,576,000 shares
    and 1,594,000 shares, respectively)        911,000          911,000
  Additional Paid - in Capital              15,947,000       15,359,000
  Retained Earnings                        178,398,000      153,797,000
  Accumulated Other Comprehensive Income    70,507,000       44,123,000
  Treasury Stock (at cost)                 (15,293,000)     (14,704,000)
  Unvested Restricted Stock Awards          (1,638,000)      (2,460,000)
                                          -------------    -------------

      Total                                248,832,000      197,026,000
                                          -------------    -------------

      Total Liabilities and
        Shareholders' Equity              $306,468,000     $260,160,000
                                          =============    ============= 

                                       15

<PAGE>

                           THE MIDLAND COMPANY (Parent Only)


         Schedule II - Condensed Financial Information of Registrant
                  Condensed Statements of Income Information
             For the Years Ended December 31, 1998, 1997 and 1996




                                            1998          1997          1996
                                       ------------- ------------- -------------
Revenues:
 Dividends from Subsidiaries           $  3,000,000  $  8,900,000  $ 20,500,000
 All Other Income, Primarily Charges
   to Subsidiaries                        6,934,000     7,746,000     7,876,000
                                       ------------- ------------- -------------
     Total Revenues                       9,934,000    16,646,000    28,376,000
                                       ------------- ------------- -------------

Expenses:
  Interest Expense                        3,971,000     4,775,000     5,101,000
  Depreciation and Amortization           2,701,000     6,195,000     2,548,000
  All Other Expenses                      2,303,000       833,000     2,033,000
                                       ------------- ------------- -------------
      Total Expenses                      8,975,000    11,803,000     9,682,000
                                       ------------- ------------- -------------

 Income Before Federal Income Tax           959,000     4,843,000    18,694,000
 Provision (Credit) for Federal
   Income Tax                            (1,023,000)   (1,599,000)     (654,000)
                                       ------------- ------------- -------------
 Income Before Change in Undistributed
  Income of Subsidiaries                  1,982,000     6,442,000    19,348,000
 Change in Undistributed Income
  of Subsidiaries:
   From Continuing operations            24,950,000    17,925,000   (15,605,000)
   From Discontinued operations                 -      (6,817,000)   (2,675,000)
                                       ------------- ------------- -------------

      Net Income                       $ 26,932,000  $ 17,550,000  $  1,068,000
                                       ============= ============= =============

                                       16

<PAGE>

                      THE MIDLAND COMPANY (Parent Only)


         Schedule II - Condensed Financial Information of Registrant
                Condensed Statements of Cash Flows Information
             For the Years Ended December 31, 1998, 1997 and 1996


                                            1998          1997          1996
                                       ------------- ------------- -------------
Cash Flows from Operating Activities:
  Net income                           $ 26,932,000  $ 17,550,000  $  1,068,000
  Loss from discontinued operations             -       6,817,000     2,675,000
                                       ------------- ------------- -------------
  Income from continuing operations      26,932,000    24,367,000     3,743,000
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
    Decrease (increase) in undistributed
     income of subsidiaries             (24,950,000)  (17,925,000)   15,605,000
    Depreciation and amortization         2,701,000     6,195,000     2,548,000
    Increase in other assets             (1,142,000)   (1,286,000)   (1,359,000)
    Decrease (increase) in receivables   (1,922,000)      134,000       689,000
    Increase in other payables and
     accruals                               153,000     1,575,000        90,000
    Other - net                             301,000         4,000      (592,000)
                                       ------------- ------------- -------------
     Net Cash Provided by
         Operating Activities             2,073,000    13,064,000    20,724,000
                                       ------------- ------------- -------------

Cash Flows from Investing Activities:
  Acquisition of property, plant and
   equipment                             (1,657,000)   (2,617,000)   (1,516,000)
  Capital contributions to
   subsidiaries                                 -     (12,326,000)          -
  Sale of property, plant and
   equipment and other real
   estate - net                           5,969,000       535,000        66,000
  Change in investments (excluding
   unrealized appreciation/depreciation)  1,943,000    (1,991,000)    7,690,000
                                       ------------- ------------- -------------
     Net Cash Provided by (Used in)
         Investing Activities             6,255,000   (16,399,000)    6,240,000
                                       ------------- ------------- -------------

Cash Flows from Financing Activities:
  Net change in intercompany accounts     2,968,000     7,323,000   (21,363,000)
  Increase (decrease) in long - term
   debt                                  (1,458,000)      948,000      (767,000)
   Decrease in short - term borrowings   (8,269,000)   (2,909,000)   (2,920,000)
   Dividends paid                        (1,746,000)   (2,677,000)   (1,962,000)
   Net issuance (purchase) of treasury
    stock                                    37,000       619,000        75,000
                                       ------------- ------------- -------------
     Net Cash Provided by (Used in)
         Financing Activities            (8,468,000)    3,304,000   (26,937,000)
                                       ------------- ------------- -------------
Net Increase (Decrease) in cash            (140,000)      (31,000)       27,000

Cash at Beginning of Year                   236,000       267,000       240,000
                                       ------------- ------------- -------------

Cash at End of Year                    $     96,000  $    236,000  $    267,000
                                       ============= ============= =============

                                       17

<PAGE>

                      THE MIDLAND COMPANY (Parent Only)


         Schedule II - Condensed Financial Information of Registrant
                   Notes to Condensed Financial Information
                For the Years Ended December 31, 1998 and 1997



The accompanying condensed financial information should be read in conjunction
with the consolidated financial statements and notes included in the
Registrant's 1998 Annual Report to Shareholders.

Total debt of the Registrant (parent only) consists of the following:


                                                     DECEMBER 31,
                                                1998              1997
                                           -------------     ------------- 
Short - Term Bank Borrowings               $ 15,000,000      $ 24,000,000
Commercial Paper                              6,522,000         5,791,000
Mortgage Notes:
     7.10% - Due January 1, 2001              1,227,000         1,773,000
     6.83% - Due December 20, 2005           19,195,000        19,768,000
     5.40% - Due December 1, 2003             7,559,000         7,898,000

        Total Debt                         $ 49,503,000      $ 59,230,000



See Notes 8 and 9 to the consolidated financial statements included in the 1998
Annual Report to Shareholders for further information on the Company's
outstanding debt at December 31, 1998.

The Amount of debt that becomes due during each of the next five years is as
follows: 1999 - $1,710,000; 2000 - $1,806,000; 2001 - $1,215,000;
2002 - $1,266,000; 2003 - $6,331,000.

                                       18

<PAGE>

<TABLE>

                                       THE MIDLAND COMPANY AND SUBSIDIARIES

                                Schedule III - Supplementary Insurance Information
                               For the Years Ended December 31, 1998, 1997 and 1996
                                                (Amounts in 000's)

        Column A            Column B        Column C         Column D       Column E       Column F       Column G

                                           Future
                                           Policy
                           Deferred        Benefits,                       Other Policy
                           Policy          Losses,                         Claims and                    Net
                           Acquisition     Claims and       Unearned       Benefits        Premium       Investment
                           Cost            Loss Expenses    Premiums       Payable         Revenue       Income (1)
                           -----------------------------------------------------------------------------------------
                           <C>             <C>             <C>             <C>            <C>            <C>
1998
 Manufactured Housing      $   48,260      $     48,939    $ 209,171                      $ 258,638      $   14,875 
 Other Insurance               15,702            76,557       45,944                        116,840           9,923  
 Unallocated Amounts                                                                                             34 
 Inter-segment Elimination                                                                                     (924)
                           -----------------------------------------------------------------------------------------
   Total                   $   63,962      $    125,496    $ 255,115       $   -          $ 375,478      $   23,908 
                           =========================================================================================

1997
 Manufactured Housing      $   43,366      $     42,430    $ 195,793                      $ 219,394      $   13,935
 Other Insurance               12,224            77,704       44,547                         91,765           8,359
 Unallocated Amounts                                                                                             24
 Inter-segment Elimination                                                                                     (986) 
                           -----------------------------------------------------------------------------------------
   Total                   $   55,590      $    120,134    $ 240,340       $   -          $ 311,159      $   21,332 
                           =========================================================================================

1996
 Manufactured Housing      $   34,492      $     42,547    $ 183,792                      $ 182,581      $   12,303 
 Other Insurance               10,850            53,283       24,625                         98,033           6,756 
 Unallocated Amounts                                                                                             14 
 Inter-segment Elimination                                                                                     (804) 
                           -----------------------------------------------------------------------------------------
   Total                   $   45,342      $     95,830    $ 208,417       $   -          $ 280,614      $   18,269
                           =========================================================================================


                            Column H         Column I          Column J                    Column K



                           Benefits,        Amortization of
                           Claims, Losses   Deferred Policy   Other
                           and Settlement   Acquisition       Operating                   Premiums
                           Expenses         Costs             Expenses (1)                Written
                           -------------------------------------------------------------------------
                           <C>              <C>               <C>                         <C>
1998
 Manufactured Housing      $      137,483   $       71,288    $     31,005                $ 283,020
 Other Insurance                   72,532           31,881          23,304                  110,987 (2)
 Unallocated Amounts
 Inter-segment Elimination
                           ------------------------------------------------               ----------
   Total                   $      210,015   $      103,169    $     54,309                $ 394,007       
                           ================================================               ==========

1997
 Manufactured Housing      $      100,919   $       64,265    $     27,763                $ 247,704
 Other Insurance                   70,244           15,253          21,355                   97,745 (2)
 Unallocated Amounts
 Inter-segment Elimination
                           ------------------------------------------------               ----------
   Total                   $      171,163   $       79,518    $     49,118                $ 345,449  
                           ================================================               ==========

1996
 Manufactured Housing      $      101,223   $       54,761    $     20,477                $ 205,933
 Other Insurance                   71,203           26,772          20,878                   86,600 (2)
 Unallocated Amounts
 Inter-segment Elimination
                           ------------------------------------------------               ----------
   Total                   $      172,426   $       81,533    $     41,355                $ 292,533
                           ================================================               ==========


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 ($2,237, $2,738 and $2,178 for 1998, 1997
     and 1996, respectively) insurance.

</TABLE>

                                       19

<PAGE>

<TABLE>


                                         THE MIDLAND COMPANY AND SUBSIDIARIES

                                              Schedule IV - Reinsurance
                                 For the Years Ended December 31, 1998, 1997 and 1996



   Column A                           Column B          Column C         Column D         Column E          Column F

                                                        Ceded to           Assumed                         Percentage of
                                        Gross             Other          from Other            Net        Amount Assumed
                                       Amount           Companies         Companies          Amount           to Net
                                     -----------------------------------------------------------------------------------
                                     <C>               <C>               <C>              <C>             <C>
1998
----

Life Insurance in Force              $416,892,000      $167,412,000      $ 1,895,000      $251,375,000            0.8%
                                     ===================================================================================

Insurance Premiums and
  Other Considerations:
    Life and Health Insurance        $  9,712,000      $  3,520,000      $   235,000      $  6,427,000            3.7%
    Property & Liability Insurance    394,166,000        60,573,000       35,458,000       369,051,000            9.6%
                                     -----------------------------------------------------------------------------------
      Total Premiums                 $403,878,000      $ 64,093,000      $35,693,000      $375,478,000            9.5%
                                     ===================================================================================

1997
----

Life Insurance in Force              $371,298,000      $170,668,000                       $200,630,000            0.0%
                                     ===================================================================================

Insurance Premiums and
  Other Considerations:
    Life and Health Insurance        $  9,761,000      $  4,371,000      $   214,000      $  5,604,000            3.8%
    Property & Liability Insurance    375,967,000        98,406,000       27,994,000       305,555,000            9.2%
                                     -----------------------------------------------------------------------------------
      Total Premiums                 $385,728,000      $102,777,000      $28,208,000      $311,159,000            9.1%
                                     ===================================================================================

1996
----

Life Insurance in Force              $327,473,000      $163,604,000      $ 5,730,000      $169,599,000            3.4%
                                     ===================================================================================

Insurance Premiums and
  Other Considerations:
    Life and Health Insurance        $  7,813,000      $  4,072,000      $ 1,004,000      $  4,745,000           21.2%
    Property & Liability Insurance    347,259,000        92,674,000       21,284,000       275,869,000            7.7%
                                     -----------------------------------------------------------------------------------
      Total Premiums                 $355,072,000      $ 96,746,000      $22,288,000      $280,614,000            7.9%
                                     ===================================================================================

</TABLE>

                                       20

<PAGE>

                     THE MIDLAND COMPANY AND SUBSIDIARIES


                Schedule V - Valuation and Qualifying Accounts
             For the Years Ended December 31, 1998, 1997 and 1996


                                            ADDITIONS
                                             CHARGED
                              BALANCE AT  (CREDITED) TO                 BALANCE
                              BEGINNING     COSTS AND    DEDUCTIONS     AT END
DESCRIPTION                   OF PERIOD     EXPENSES     (ADDITIONS)   OF PERIOD
--------------------------------------------------------------------------------

YEAR ENDED DECEMBER 31, 1998:

  Allowance For Losses         $ 753,000    $ 176,000   $ 176,000 (1)  $ 753,000


YEAR ENDED DECEMBER 31, 1997:

  Allowance For Losses         $ 799,000    $ 184,000   $ 230,000 (1)  $ 753,000


YEAR ENDED DECEMBER 31, 1996:

  Allowance For Losses         $ 863,000    $ (50,000)  $  14,000 (1)  $ 799,000


NOTES:
(1) Accounts written off are net of recoveries.

                                       21

<PAGE>

<TABLE>

                                  THE MIDLAND COMPANY AND SUBSIDIARIES

             Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations
                          For the Years Ended December 31, 1998, 1997 and 1996
                                           (Amounts in 000's)


  Column A             Column B       Column C      Column D       Column E       Column F      Column G

                                    Reserves for
                       Deferred    Unpaid Claims    Discount,
Affiliation             Policy       and Claim       if any,                                       Net
with                  Acquisition    Adjustment    Deducted in     Unearned        Earned      Investment
Registrant               Costs        Expenses      Column C       Premiums       Premiums       Income
----------------------------------------------------------------------------------------------------------
                      <C>           <C>            <C>           <C>            <C>            <C>
Consolidated
Property-Casualty
Subsidiaries

1998                  $   59,736    $  121,154     $    -        $  236,171     $  369,051     $   22,468  
                      ===========   ===========    ==========    ===========    ===========    ===========

1997                  $   52,198    $  116,898     $    -        $  222,530     $  305,555     $   20,018
                      ===========   ===========    ==========    ===========    ===========    ===========

1996                  $   42,308    $   92,940     $    -        $  190,071     $  275,869     $   17,161
                      ===========   ===========    ==========    ===========    ===========    ===========


                       Column H                     Column I       Column J       Column K

                             Claims and
                                Claim
                              Adjustment
                               Expenses           Amortization
                               Incurred            of Deferred   Paid Claims
Affiliation                   Related to             Policy       and Claim
with                    Current        Prior       Acquisition    Adjustment      Premiums
Registrant               Year          Years          Costs        Expenses       Written
-------------------------------------------------------------------------------------------
                      <C>           <C>            <C>           <C>            <C>
Consolidated
Property-Casualty
Subsidiaries

1998                  $  208,811    $  (2,120)     $  100,190    $  200,325     $  391,770
                      ===========   ==========     ===========   ===========    ===========

1997                  $  163,035    $   5,230      $   77,100    $  151,148     $  342,711
                      ===========   ==========     ===========   ===========    ===========

1996                  $  166,554    $   3,771      $   79,100    $  153,253     $  290,355
                      ===========   ==========     ===========   ===========    ===========

</TABLE>
                                       22