UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

ANNUAL REPORT

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

For the Fiscal Year Ended December 31, 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.

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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

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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.

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

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	Seasonality
	Incurred 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.
	Reinsurance
	In 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 Customer
	Midland’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 Address
	Midland’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.

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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 Risk
	Incorporated 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

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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.

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(a) 2. Financial Statement Schedules.

         Included in Part IV of this report:

     (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,

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	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.

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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

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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

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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

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THE MIDLAND COMPANY AND SUBSIDIARIES

Schedule I - Summary of Investments
Other than Investments in Related Parties
December 31, 2004

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THE MIDLAND COMPANY (Parent Only)

Schedule II - Condensed Financial Information of Registrant
Condensed Balance Sheet Information
December 31, 2004 and 2003

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THE MIDLAND COMPANY (Parent Only)

Schedule II - Condensed Financial Information of Registrant
Condensed Balance Sheet Information
December 31, 2004 and 2003

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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

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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

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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:

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.

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THE MIDLAND COMPANY AND SUBSIDIARIES

Schedule III - Supplementary Insurance Information
For the Years Ended December 31, 2004, 2003 and 2002
(Amounts in 000’s)

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).

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THE MIDLAND COMPANY AND SUBSIDIARIES

Schedule IV - Reinsurance
For the Years Ended December 31, 2004, 2003 and 2002

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THE MIDLAND COMPANY AND SUBSIDIARIES

Schedule V - Valuation and Qualifying Accounts
For the Years Ended December 31, 2004, 2003 and 2002