The Midland Co. Projects Frances Losses

The Midland Company, an Ohio-based provider of specialty insurance products and services, today reported projected losses from Hurricane Frances.

“Based on the information received to date, we expect to incur pre-tax losses, net of reinsurance, from Hurricane Frances of $3.0 million to $4.0 million, or 10 cents to 14 cents per share (after-tax, diluted). Our strategy to limit our Florida exposures coupled with our comprehensive reinsurance program helped soften the impact on our bottom line,” John Hayden, Midland president and CEO, said.

Hayden added, “Our catastrophe reinsurance program is an essential
component to our risk management strategy. We structure our multi-dimensional program to limit our losses from individual catastrophes as well as from a series of catastrophes in a given year. We believe that the approach we take in designing our reinsurance program and the discipline we take in exposure management are key elements of our fundamental strength. We believe these strategies reduce our earnings volatility and maximize the value to our shareholders.”

American Modern Insurance Group, Midland’s insurance subsidiary, has mobilized 21 employee adjusters to catastrophe claim offices in Orlando and Lakeland, Florida.

Hayden also updated the company’s estimate of losses relative to Hurricane Charley, which made landfall on the gulf coast of Florida in mid-August. “At the time of our August 19, 2004 press release, we had incurred gross pre-tax losses from Hurricane Charley of approximately $4.0 million. Our pre-tax losses from Hurricane Charley, net of reinsurance, have developed in line with our expectations and are expected to total between $6.0 million and
$6.5 million, or 20 cents to 22 cents per share (after-tax, diluted).

“Two months into the third quarter, we continue to see favorable non-
catastrophe underwriting results in our core lines of business, including site-built dwelling, motorcycle, watercraft and manufactured housing,” Hayden said. “At this point, we believe that we are still on track to meet our previously reported full-year earnings per share guidance of to $2.40 to $2.60 per share, which includes 18 cents of capital gains realized through June 30, 2004, assuming normalized weather for the remainder of the 2004.”

Hayden said the company is also closely monitoring Hurricane Ivan as it approaches the southern United States.