8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): October 24, 2006

THE MIDLAND COMPANY

(Exact name of registrant as specified in its charter)

Ohio	1-6026	31-0742526
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No. )

7000 Midland Boulevard, Amelia, Ohio 45102-2607

(Address of principal executive offices) (Zip Code)

(513) 943-7100

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d.(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On October 24, 2006, the Registrant issued a press release announcing its financial results for the quarter ended September 30, 2006. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.

On October 24, 2006, the Registrant will be posting on its website, www.midlandcompany.com, the attached information titled “Supplemental Financial Information” and “Supplemental Financial Information by Segment.” Copies of the Supplemental Financial Information and Supplemental Financial Information by Segment are furnished as Exhibits 99.2 and 99.3 respectively to this report and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

99.1 – Press release dated October 24, 2006

99.2 – Supplemental Financial Information dated October 24, 2006

99.3 – Supplemental Financial Information Segment dated October 24, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE MIDLAND COMPANY
Date: October 24, 2006	By:	/s/ W. Todd Gray
		W. Todd Gray
		Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

THE MIDLAND COMPANY

7000 MIDLAND BOULEVARD

AMELIA, OHIO 45102-2607

(513) 943-7100

MAILING ADDRESS

P.O BOX 1256

CINCINNATI, OHIO 45201

For Immediate Release October 24, 2006

Contact:

W. Todd Gray, Executive Vice President and CFO

(513) 943-7100

The Midland Company Reports Record Third Quarter

and Nine Month Results

• Record Setting Third Quarter Earnings Per Share of 88 Cents

• Solid Non-Catastrophe Underwriting Coupled with Mild Weather Drives Results

• Double Digit Property and Casualty Premium Growth

• Raises Full Year Earnings Guidance

Cincinnati, October 24, 2006 — The Midland Company (Nasdaq: MLAN), a highly focused provider of specialty insurance products and services, today reported record results for the third quarter ended September 30, 2006. Net income for the quarter was a record $17.3 million, or 88 cents per share, exceeding last year’s third quarter net income of $3.7 million, or 19 cents per share. All per share amounts are on an after-tax, diluted basis. Prior period amounts have been restated to reflect the impact of expensing stock options, which the company implemented December 31, 2005.

Net income before realized capital gains* for the quarter was also a record $16.6 million, or 85 cents per share compared to the year ago level of $1.7 million, or 8 cents per share. The increase of 77 cents per share from the prior year third quarter is primarily the result of 82 cents per share lower catastrophe losses in the current quarter, offset by a 10 cent per share increase in base reinsurance costs. The company believes that this non-GAAP financial measure provides a clearer picture of the underlying operating activities than the GAAP measure of net income, as it removes potential issues such as timing of investment gains (or losses) and allows readers to individually assess these components of net income.

John W. Hayden, Midland president and chief executive officer, commented, “We are delighted to deliver these record setting third quarter results. They are the result of solid non-catastrophe underwriting and relatively benign weather patterns during the third quarter. Disciplined non-catastrophe underwriting is at the heart of our profit strategy and we continue to demonstrate our ability to deliver outstanding results across our broad specialty insurance product platform.”

“We are also very pleased with our top line property and casualty premium growth during the quarter. Growth in our site-built dwelling, mortgage fire and excess and surplus product lines paved the way for a double digit growth rate in the third quarter compared to the prior year. Double digit growth coupled with record earnings is compelling evidence that the fundamentals of our business are in order, and reinforces our leadership position in the specialty insurance marketplace,” said Hayden.

Midland’s wholly owned insurance subsidiary, American Modern Insurance Group, specializes in providing insurance products and services for niche markets such as manufactured housing, site-built dwelling, motorcycle, watercraft, snowmobile, recreational vehicle and credit life and related products. American Modern’s products and services are offered through diverse distribution channels.

Page 1 of 7

The Midland Company Reports Record Third Quarter and Nine Month Results

October 24, 2006

Strong Non-Catastrophe Underwriting Results

American Modern’s property and casualty combined ratio was 95.1 percent in the third quarter, compared to 106.6 percent a year ago. Catastrophe losses for the quarter impacted the property and casualty combined ratio by 2.5 percentage points in 2006, as compared to 18.5 percentage points in the prior year. Catastrophe losses reduced earnings per share by 14 cents in the third quarter, compared to 96 cents in the prior year third quarter, primarily emanating from Hurricanes Katrina, Rita and Dennis. These amounts compare to the 30 cents per share that the company considers normal for third quarter catastrophe losses.

Excluding catastrophe losses, American Modern’s third quarter property and casualty combined ratio was a solid 92.6 percent, compared with 88.1 percent in the same period of 2005. The increase in the non-catastrophe combined ratio over the prior period was driven primarily by additional seasonal losses related to the casualty product lines and an increase in the cost of the company’s reinsurance.

“We continue to be very pleased with the underwriting trends across our major product lines. Our manufactured housing combined ratio was a solid 91.5 percent during the third quarter. We also experienced very favorable underwriting trends in our site-built, mortgage fire and excess and surplus product lines,” Hayden said.

“We have again been well-served by our deep specialty product expertise and proactive risk management disciplines. Our underwriting proficiency and commitment to rate adequacy have enabled us to deliver record third quarter results and further positions us to achieve our long-term financial objectives,” Hayden said.

Double Digit Property and Casualty Premium Growth

American Modern’s property and casualty gross written premiums for the third quarter were $212.7 million, compared to $185.8 million in last year’s third quarter, an increase of 14.5 percent. Hayden commented, “We experienced strong growth across our broad specialty product platform, with mortgage fire, site-built dwelling and excess and surplus product lines achieving the most impressive growth. We continue to emphasize the diversification of our products and distribution channels to achieve a sustainable level of above average growth. This diversification strategy continues to demonstrate its value.”

“Our manufactured housing premium actually declined 3.1 percent to $88.0 million, compared to $90.8 million in the third quarter of 2005, due to the continued run-off of our lender channel business. However, we remain encouraged by the manufactured housing premium growth we are getting from our agency and point of sale distribution channels, and believe we are well positioned to capture future market share opportunities.” Hayden said.

Hayden continued, “We continue to execute our strategic growth plan by emphasizing organic expansion and policyholder retention complemented with strategic business alliances and strategically appropriate acquisitions. We believe that these strategies will position us to achieve our objective of long-term profitable growth.”

Record Nine-Month Results

For the nine months ended September 30, 2006, net income was a record $49.6 million, or $2.53 per share, which includes 18 cents from realized capital gains, up from last year’s previous record net income of $45.3 million, or $2.34 cents per share, which included 18 cents per share in net capital gains. Net income before realized capital gains per share* for the first nine months of 2006 was also a record $46.0 million, compared to the previous record set last year of $41.8 million, an increase of 10.0 percent.

American Modern’s property and casualty combined ratio was 94.7 percent for the first nine months of both 2006 and 2005. Excluding the impact of catastrophe losses, American Modern’s combined ratio for the first nine months of 2006 was 88.9 percent, compared to 87.3 percent last year.

Page 2 of 7

The Midland Company Reports Record Third Quarter and Nine Month Results

October 24, 2006

American Modern’s property and casualty gross written premiums were $597.2 million for the first nine months of the year, compared to $533.3 in the same period last year, an increase of 12.0 percent. Manufactured housing premiums were moderately higher to $259.5 million for the first nine months of 2006, from $256.6 million for the same period in 2005.

Investment Portfolio, Book Value and Market Value Growth

The market value of Midland’s investment portfolio increased to $1.0 billion at September 30, 2006, compared with $966.1 million at September 30, 2005. Net pre-tax investment income (which does not include capital gains and losses) increased 3.4 percent to $10.5 million for the third quarter compared with $10.1 million in last year’s third quarter. This increase is driven by the year-over-year growth of the fixed income portfolio and higher interest rates. The annualized pre-tax equivalent yield, on a cost basis, of Midland’s fixed income portfolio was 5.8 percent in the third quarter of 2006, up from 5.3 percent in the comparable prior period.

After-tax realized investment gains from Midland’s investment portfolio totaled three cents per share in the third quarter of 2006, compared to 11 cents per share in the last year’s third quarter. Pre-tax net unrealized gains on Midland’s fixed income portfolio were $7.4 million at September 30, 2006, down from $10.7 million of pre-tax net unrealized gains at September 30, 2005. Pre-tax net unrealized gains on Midland’s equity portfolio were $99.2 million at September 30, 2006, up from $82.7 million at September 30, 2005.

Midland’s shareholders’ equity increased to a record $545.7 million, or $28.50 per share, at September 30, 2006, up from $465.2 million, or $24.56 per share, at September 30, 2005, an increase of 16.0 percent on a per share basis. Midland’s book value per share has grown at a compound annual rate of 13.1 percent over the last 10 years.

Hayden noted that, “Midland’s common stock continues to outperform the broader equities market and virtually every relevant index for the 1-, 5-, 10-, 15- and 20-year periods ended September 30, 2006. We are extremely proud of this performance record and believe it is a good indicator of the value we deliver to our shareholders.”

M/G Transport Group

M/G Transport, Midland’s transportation subsidiary, contributed an after-tax profit of seven cents per share for the third quarter of 2006, compared to three cents per share for the third quarter of 2005. For the first nine months, M/G transport has contributed an after-tax profit of 20 cents per share, which doubles the prior year contribution of 10 cents per share. “M/G Transport continues to take full advantage of the exceptional current market conditions through increased pricing power and effective management of its barge fleet,” Hayden said.

Named to Ward’s Top 50 Property and Casualty Insurance Companies

American Modern Insurance Group has once again been recognized as one of Ward’s Top 50 Property and Casualty Insurance Companies, balancing financial safety, consistency and performance. “This marks the eighth consecutive year American Modern has achieved this distinction,” Hayden said. “We are extremely proud of our track record of being consistently recognized alongside such an elite group of insurance companies.”

Raises Full Year Earnings Guidance

Hayden commented, “As we look toward the final quarter of 2006, we remain very optimistic about our top line growth and earnings outlook. We believe that we are on track to meet our previously announced high single-digit to low double-digit top line growth expectation for the full year 2006. From an earnings standpoint, we remain optimistic about our full year results and are raising our previously issued guidance. The first few weeks of October are off to a good start and we expect our solid non-catastrophe underwriting results will continue throughout the fourth quarter. Assuming normal weather for the remainder of the year, we anticipate a full year property and casualty combined ratio in the range of 93.5 percent to 94.5 percent. Based on this level of anticipated underwriting profit, we are raising our annual earnings estimated range to $3.10 to $3.30 per share, assuming no net realized capital gains or losses, which is ahead of our previously issued guidance of $2.90 to $3.20 per share.”

Page 3 of 7

The Midland Company Reports Record Third Quarter and Nine Month Results

October 24, 2006

About the Company

Midland, which is headquartered in Cincinnati, Ohio, is a provider of specialty insurance products and services through its wholly owned subsidiary, American Modern Insurance Group, which accounts for approximately 95 percent of Midland’s consolidated revenue. American Modern specializes in writing physical damage insurance and related coverages on manufactured housing and has expanded to other specialty insurance products including coverage for site-built homes, motorcycles, watercraft, snowmobiles, recreational vehicles, physical damage on long-haul trucks, extended service contracts, excess and surplus lines coverages, credit life and related products as well as collateral protection and mortgage fire products sold to financial institutions and their customers. Midland also owns a niche transportation business, M/G Transport Group, which operates a fleet of dry cargo barges for the movement of dry bulk commodities on the inland waterways. Midland’s common stock is traded on the Nasdaq National Market under the symbol MLAN. Additional information on the company can be found on the Internet at www.midlandcompany.com.

*Non-GAAP Measure and Reconciliation to GAAP Measure

Net income before realized capital gains is a non-GAAP measure. Items excluded from this measure are significant components in understanding and assessing financial performance. The company believes that this non-GAAP financial measure provides a clearer picture of the underlying operating activities than the GAAP measure of net income, as it removes potential issues such as timing of investment gains (or losses) and allows readers to individually assess these components of net income.

Reconciliation to GAAP:

	Third Quarter				Nine Months
	2006		2005		2006		2005
Dollars in Millions (After-tax):
Net Income Before Realized Capital Gains*	$	16.6	$	1.7	$	46.0	$	41.8
Net Realized Capital Gains		0.7		2.0		3.6		3.5
Net Income (GAAP)	$	17.3	$	3.7	$	49.6	$	45.3
	2006		2005		2006		2005
Per Share Amounts (After-tax, Diluted):
Net Income Before Realized Capital Gains*	$	0.85	$	0.08	$	2.35	$	2.16
Net Realized Capital Gains		0.03		0.11		0.18		0.18
Net Income (GAAP)	$	0.88	$	0.19	$	2.53	$	2.34

Forward Looking Statements Disclosure

Certain statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These statements include certain discussions relating to underwriting, premium and investment income volume, business strategies, profitability and business relationships, as well as any other statements concerning the year 2006 and beyond. The forward-looking statements involve risks, uncertainties and other factors 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 the company or its subsidiaries, changes in the business tactics or strategies of the company, its subsidiaries or its current or anticipated business partners, the financial condition of the company’s business partners, acquisitions or divestitures, changes in market forces, litigation and the other risk factors that have been identified in the company’s filings with the SEC, any one of which might materially affect the operations of the company 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.

Page 4 of 7

The Midland Company Reports Record Third Quarter Results

October 24, 2006

THE MIDLAND COMPANY

FINANCIAL HIGHLIGHTS

(UNAUDITED)

	Three-Months Ended September 30,								Nine-Months Ended September 30,
	2006			2005			% Change		2006			2005			% Change
Revenues	$	204,813		$	173,243		18.2	%	$	581,918		$	549,947		5.8	%
Net Income	$	17,345		$	3,732				$	49,585		$	45,325
Net Income per Share (Diluted)	$	0.88		$	0.19				$	2.53		$	2.34
Dividends Declared per Share	$	0.06125		$	0.05625		8.9	%	$	0.18375		$	0.16875		8.9	%
Market Value per Share	$	43.32		$	36.03		20.2	%	$	43.32		$	36.03		20.2	%
Book Value per Share	$	28.50		$	24.56		16.0	%	$	28.50		$	24.56		16.0	%
Shares Outstanding		19,147			18,943					19,147			18,943
AMIG’s Property and Casualty Operations:
Direct and Assumed Written Premium	$	212,707		$	185,778		14.5	%	$	597,172		$	533,294		12.0	%
Net Written Premium	$	185,828		$	159,602		16.4	%	$	522,079		$	483,419		8.0	%
Combined Ratio (GAAP)		95.1	%		106.6	%				94.7	%		94.7	%
Combined Ratio (GAAP) - Excluding Catastrophe Losses		92.6	%		88.1	%				88.9	%		87.3	%
AMIG’s Life Insurance Operations:
Direct and Assumed Written Premium	$	14,377		$	10,126		42.0	%	$	33,676		$	27,574		22.1	%
Net Written Premium	$	5,449		$	2,432		124.1	%	$	10,298		$	6,363		61.8	%
Combined Ratio (GAAP)		86.1	%		93.1	%				91.3	%		77.9	%

Note:

Dollar amounts in thousands except per share data.

Page 5 of 7

The Midland Company Reports Record Third Quarter Results

October 24, 2006

THE MIDLAND COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three-Months Ended September 30,				Nine-Months Ended September 30,
	2006		2005		2006		2005
Revenues:
Premiums earned	$	175,726	$	147,946	$	497,226	$	473,226
Other insurance income		3,284		3,148		9,747		9,542
Net investment income		10,474		10,128		30,978		30,247
Net realized investment gains		1,094		3,162		5,492		5,378
Transportation		14,235		8,859		38,475		31,554
Total	$	204,813	$	173,243	$	581,918	$	549,947
Costs and Expenses:
Insurance:
Losses and loss adjustment expenses	$	81,949		86,742	$	234,788		221,452
Commissions and other policy acquisition costs		56,405		45,539		154,334		147,584
Operating and administrative expenses		30,194		27,294		88,507		83,320
Transportation operating expenses		11,904		8,019		32,372		28,563
Interest expense		1,281		1,774		4,016		4,853
Total	$	181,733	$	169,368	$	514,017	$	485,772
Income Before Federal Income Tax		23,080		3,875		67,901		64,175
Provision for Federal Income Tax		5,735		143		18,316		18,850
Net Income	$	17,345	$	3,732	$	49,585	$	45,325
Basic Earnings per Common Share:	$	0.91	$	0.20	$	2.60	$	2.40
Diluted Earnings per Common Share:	$	0.88	$	0.19	$	2.53	$	2.34
Dividends per Common Share	$	0.06125	$	0.05625	$	0.18375	$	0.16875

Note:

Dollar amounts in thousands except per share data.

Shares used for EPS calculations (000’s):

	Basic EPS	Diluted EPS
Nine months ended September 30
2006	19,050	19,585
2005	18,878	19,369
Three months ended September 30
2006	19,109	19,644
2005	18,914	19,401

Page 6 of 7

The Midland Company Reports Record Third Quarter Results

October 24, 2006

THE MIDLAND COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	September 30, 2006		December 31, 2005
ASSETS
Cash and Marketable Securities	$	1,005,520	$	950,464
Receivables - Net		271,899		269,862
Property, Plant and Equipment - Net		102,679		89,888
Deferred Insurance Policy Acquisition Costs		102,916		88,374
Other		33,896		29,525
Total Assets	$	1,516,910	$	1,428,113
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned Insurance Premiums	$	459,961	$	395,007
Insurance Loss Reserves		226,248		254,660
Long-Term Debt		90,828		91,766
Short-Term Borrowings		7,654		20,005
Deferred Federal Income Tax		43,397		38,350
Other Payables and Accruals		143,145		143,948
Shareholders’ Equity		545,677		484,377
Total Liabilities and Shareholders’ Equity	$	1,516,910	$	1,428,113

Note: Dollar amounts in thousands.

Page 7 of 7

EX-99.2

Exhibit 99.2

The Midland Company

Supplemental Financial Information

($ in millions except per share data)

	2005															2006
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year
Direct & Assumed Written Premium:
Property-Casualty Premiums
Mobile Home and Related		77.8			88.0			90.8			74.9			331.5			81.0			90.5			88.0			259.5
All Other Specialty Lines		86.3			95.4			95.0			89.7			366.4			94.1			118.9			124.7			337.7
Total Property and Casualty		164.1			183.4			185.8			164.6			697.9			175.1			209.4			212.7			597.2
Revenues:
Insurance:
Premiums Earned		165.6			159.7			147.9			158.7			631.9			159.2			162.3			175.7			497.2
Net Investment Income		9.9			10.2			10.1			10.3			40.5			10.3			10.2			10.5			31.0
Net Realized Investment Gains (Losses)		0.8			1.4			3.1			0.9			6.2			2.4			1.9			1.1			5.4
Other Insurance Income		3.3			3.1			3.2			3.0			12.6			3.2			3.3			3.3			9.8
Transportation		10.8			11.9			8.9			10.6			42.2			11.8			12.5			14.2			38.5
Total Revenues		190.4			186.3			173.2			183.5			733.4			186.9			190.2			204.8			581.9
Costs & Expenses:
Insurance:
Losses & Loss Adjustment Expenses		62.9			71.8			86.7			65.3			286.7			60.9			91.9			81.9			234.7
Commissions & Other Policy Acquisition Costs		57.7			44.3			45.5			51.1			198.6			54.2			43.7			56.4			154.3
Operating & Administrative Expenses		27.4			28.6			27.3			29.0			112.3			28.8			29.5			30.2			88.5
Transportation Operating Expenses		10.1			10.4			8.0			8.4			36.9			9.5			11.0			11.9			32.4
Interest Expense		1.5			1.6			1.8			1.1			6.0			1.4			1.4			1.3			4.1
Total Costs and Expenses		159.6			156.7			169.3			154.9			640.5			154.8			177.5			181.7			514.0
INCOME BEFORE FIT		30.8			29.6			3.9			28.6			92.9			32.1			12.7			23.1			67.9
Pretax Margin		16.18	%		15.89	%		2.25	%		15.59	%		12.67	%		17.17	%		6.68	%		11.28	%		11.67	%
Provision for Federal Income Taxes (Credit)		9.6			9.1			0.2			8.6			27.5			9.7			2.9			5.7			18.3
NET INCOME BEFORE CHANGE IN ACCTG PRINCIPLE		21.2			20.5			3.7			20.0			65.4			22.4			9.8			17.4			49.6
Change in Acctg Principle		—			—			—			—			—			—			—			—			—
NET INCOME		21.2			20.5			3.7			20.0			65.4			22.4			9.8			17.4			49.6
NET OPERATING INCOME		20.7			19.6			1.7			19.4			61.4			20.8			8.5			16.7			46.0
Per Share (Post Split) Amounts
EPS (Diluted)	$	1.08		$	1.05		$	0.19		$	1.03			3.37		$	1.15		$	0.50		$	0.88			2.53
Cumulative Effect of Change in Acctg Principle		—			—			—			—			—			—			—						—
Realized Gains (Losses) Per Share		0.02			0.05			0.10			0.03			0.21			0.08			0.06			0.03			0.18
Operating EPS Per Share (Diluted)	$	1.06		$	1.00		$	0.09		$	1.00		$	3.16		$	1.07		$	0.44		$	0.85		$	2.35
Diluted Average Shares Outstanding (thousands)		19,508			19,565			19,401			19,446			19,407			19,511			19,585			19,644			19,585
Total Shares Outstanding (thousands)		18,862			18,908			18,943			18,964			18,964			19,040			19,089			19,147			19,147
Dividends Per Common Share	$	0.0563		$	0.0563		$	0.0563		$	0.0563		$	0.2250		$	0.0613		$	0.0613		$	0.0613		$	0.1838
Other Relevant Financial Information
Property and Casualty Operations
P&C Combined Ratio
GAAP Combined Ratio		88.6	%		89.9	%		106.6	%		91.2	%		93.8	%		88.8	%		100.1	%		95.1	%		94.7	%
Impact of Reclassification		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
GAAP Combined Ratio - Adjusted for Reclassification		88.6	%		89.9	%		106.6	%		91.2	%		93.8	%		88.8	%		100.1	%		95.1	%		94.7	%
Less: Impact of Net CAT Losses on P&C Loss Ratio		-2.0	%		-2.8	%		-18.5	%		-7.5	%		-7.4	%		-2.9	%		-12.2	%		-2.5	%		-5.8	%
GAAP Combined Ratio Excluding CAT Losses		86.6	%		87.1	%		88.1	%		83.7	%		86.4	%		85.9	%		87.9	%		92.6	%		88.9	%
Consolidated (P&C & Life) Insurance Operations
Various Requested Ratios
Losses / Earned Premiums		38.0	%		45.0	%		58.6	%		41.1	%		45.4	%		38.3	%		56.6	%		46.61	%		47.2	%
Insurance Operating Expenses / Earned Premiums		16.5	%		17.9	%		18.5	%		18.3	%		17.8	%		18.1	%		18.2	%		17.19	%		17.8	%
Commissions / Earned Premiums		34.8	%		27.7	%		30.8	%		32.2	%		31.4	%		34.0	%		26.9	%		32.10	%		31.0	%
Losses & Commissions / Earned Premiums		72.8	%		72.7	%		89.4	%		73.3	%		76.8	%		72.3	%		83.5	%		78.71	%		78.2	%
Consolidated Midland Operations
Various Requested Ratios
Cash & Invested Assets		947.0			975.7			971.0			950.5			950.5			944.0			944.3			1,005.5
Average Invested Assets		962.5			976.9			974.5			964.3			964.3			947.3			947.4			978.0
Consolidated MLAN Investment Portfolio Composition
Fixed Income Securities		750.7			787.2			779.1			751.7			751.7			740.3			736.1			787.0
Total Equity Securities		189.8			183.7			187.0			195.4			195.4			199.5			201.8			213.0
Fixed Income Securities as a % of Investment Portfolio		79.8	%		81.1	%		80.6	%		79.4	%		79.4	%		78.8	%		78.5	%		78.7	%
Total Equity Securities as a % of Investment Portfolio		20.2	%		18.9	%		19.4	%		20.6	%		20.6	%		21.2	%		21.5	%		21.3	%
Net Book Value Per Share (post split)
Total Shareholders’ Equity		440.9			468.4			465.2			484.4			484.4			506.7			510.4			545.7
Total Net Book Value Per Share	$	23.31		$	24.77		$	24.56		$	25.54		$	25.54		$	26.61		$	26.74		$	28.50
Less (Add): Net U/R Gain on Fixed Income Portfolio		0.38			0.74			0.37			0.28			0.28			0.03			(0.28	)		0.25
Book Value Per Share (Net of FAS 115)	$	22.93		$	24.03		$	24.19		$	25.26		$	25.26		$	26.58		$	27.02		$	28.25
Less (Add): Net U/R Gain on Equity Income Portfolio		2.83			2.86			2.84			2.96			2.96			3.10			3.04			3.37
Book Value Per Share (Net of Unrealized Gain on Mrkt Sec)	$	20.10		$	21.17		$	21.35		$	22.30		$	22.30		$	23.48		$	23.98		$	24.88

EX-99.3

Exhibit 99.3

The Midland Company

Supplemental Financial Information by Segment

Financial Highlights

(all amounts in 000’s except per share data)

	Nine Months Ended Sept. 30								Three Months Ended Sept. 30
	2006			2005			%		2006			2005			%
Income Statement Data
Insurance Revenue	$	543,443		$	518,393		4.8	%	$	190,578		$	164,384		15.9	%
Transportation Revenue		38,475			31,554		21.9	%		14,235			8,859		60.7	%
Total Revenue	$	581,918		$	549,947		5.8	%	$	204,813		$	173,243		18.2	%
Net Income	$	49,585		$	45,325				$	17,345		$	3,732
Balance Sheet Data
Cash & Invested Assets	$	1,005,520		$	971,040		3.6	%
Total Assets	$	1,516,910		$	1,530,838		-0.9	%
Total Debt	$	98,482		$	105,477		-6.6	%
Shareholders’ Equity	$	545,677		$	465,189		17.3	%
Common Shares Outstanding		19,147			18,943
Per Share Data
Net Income (Diluted)	$	2.53		$	2.34				$	0.88		$	0.19
Dividends Declared	$	0.18375		$	0.16875		8.9	%	$	0.06125		$	0.05625		8.9	%
Market Value	$	43.32		$	36.03		20.2	%
Book Value	$	28.50		$	24.56		16.0	%
AMIG’s Property and Casualty Operations
Direct and Assumed Written Premiums	$	597,172		$	533,294		12.0	%	$	212,707		$	185,778		14.5	%
Net Written Premium	$	522,079		$	483,419		8.0	%	$	185,828		$	159,602		16.4	%
Combined Ratio Before Catastrophes		88.9	%		87.3	%				92.6	%		88.1	%
Catastrophe Effects on Combined Ratio		5.8	%		7.4	%				2.5	%		18.5	%
Combined Ratio		94.7	%		94.7	%				95.1	%		106.6	%

Overview of Premium Volume

	Nine Months Ended Sept. 30, 2006						Nine Months Ended Sept. 30, 2005
Business Segment	Gross Written Premium		Net Written Premium		Net Earned Premium		Gross Written Premium		Net Written Premium		Net Earned Premium
Residential Property	$	348.9	$	314.3	$	291.4	$	324.6	$	294.6	$	285.1
Recreational Casualty		78.3		77.1		72.1		83.6		81.5		78.1
Financial Institutions		81.8		74.7		74.4		53.7		48.8		57.2
All Other Insurance		121.8		66.3		59.3		99.0		64.9		52.8
Total	$	630.8	$	532.4	$	497.2	$	560.9	$	489.8	$	473.2
	Three Months Ended Sept. 30, 2006						Three Months Ended Sept. 30, 2005
Business Segment	Gross Written Premium		Net Written Premium		Net Earned Premium		Gross Written Premium		Net Written Premium		Net Earned Premium
Residential Property	$	119.4	$	106.3	$	99.4	$	115.0	$	97.4	$	87.7
Recreational Casualty		24.0		23.6		23.7		25.5		24.0		24.5
Financial Institutions		33.6		31.9		30.5		21.0		18.9		18.8
All Other Insurance		50.0		29.5		22.1		34.4		21.8		16.9
Total	$	227.0	$	191.3	$	175.7	$	195.9	$	162.1	$	147.9

Residential Property

(all amounts in 000’s)

	Nine Months Ended Sept. 30						Three Months Ended Sept. 30
	2006		2005		%		2006		2005			%
Direct and Assumed Written Premiums	$	348,926	$	324,603	7.5	%	$	119,432	$	114,953		3.9	%
Net Written Premiums	$	314,236	$	294,633	6.7	%	$	106,265	$	97,391		9.1	%
Net Earned Premium	$	291,375	$	285,112	2.2	%	$	99,374	$	87,745		13.3	%
Service Fees		4,624		4,324	6.9	%		1,535		1,457		5.4	%
Total Revenues	$	295,999	$	289,436	2.3	%	$	100,909	$	89,202		13.1	%
Pre-Tax Income (Loss)	$	28,585	$	28,907			$	15,280	$	(4,005	)

Recreational Casualty

(all amounts in 000’s)

	Nine Months Ended Sept. 30						Three Months Ended Sept. 30
	2006		2005		%		2006			2005			%
Direct and Assumed Written Premiums	$	78,271	$	83,592	-6.4	%	$	23,997		$	25,498		-5.9	%
Net Written Premiums	$	77,115	$	81,523	-5.4	%	$	23,598		$	23,998		-1.7	%
Net Earned Premium	$	72,165	$	78,134	-7.6	%	$	23,824		$	24,522		-2.8	%
Service Fees		1,322		1,816	-27.2	%		439			612		-28.3	%
Total Revenues	$	73,487	$	79,950	-8.1	%	$	24,263		$	25,134		-3.5	%
Pre-Tax Income (Loss)	$	6,682	$	7,736			$	(1,178	)	$	(2,509	)

Financial Institutions

(all amounts in 000’s)

	Nine Months Ended Sept. 30						Three Months Ended Sept. 30
	2006		2005		%		2006		2005		%
Direct and Assumed Written Premiums	$	81,813	$	53,640	52.5	%	$	33,653	$	20,981	60.4	%
Net Written Premiums	$	74,716	$	48,781	53.2	%	$	31,895	$	18,857	69.1	%
Net Earned Premium	$	74,392	$	57,184	30.1	%	$	30,471	$	18,770	62.3	%
Pre-Tax Income (Loss)	$	9,395	$	7,850			$	4,213	$	3,291

All Other Insurance

(all amounts in 000’s)

	Nine Months Ended Sept. 30						Three Months Ended Sept. 30
	2006		2005		%		2006		2005		%
Direct and Assumed Written Premiums	$	121,838	$	99,032	23.0	%	$	50,002	$	34,471	45.1	%
Net Written Premiums	$	66,311	$	64,845	2.3	%	$	29,519	$	21,788	35.5	%
Net Earned Premium	$	59,299	$	52,799	12.3	%	$	22,060	$	16,910	30.5	%
Agency Revenues		3,791		2,706	40.1	%		1,305		1,057	23.5	%
Service Fees		5		63	-92.1	%		2		21	-90.5	%
Total Revenues	$	63,095	$	55,568	13.5	%	$	23,367	$	17,988	29.9	%
Pre-Tax Income (Loss)	$	17,675	$	17,531			$	3,126	$	5,422