The Midland Co. Projects Q3 Profit Despite Hurricanes

The Midland Company, a Cincinnati-based provider of specialty insurance products and services, has projected a third quarter profit, despite volatile weather conditions during the quarter.

“We are anticipating earnings per share for the third quarter to be between 11 cents and 15 cents (after-tax, diluted), which includes approximately 1 cent for realized capital gains,” said John Hayden, Midland’s president and CEO. “We are pleased to report that we are still on track to meet the low end of our previously reported full-year earnings per share guidance of $2.40 to $2.60, which includes an estimated 19 cents of realized capital gains.”

Hayden also commented on the impact from hurricanes Charley, Frances, Ivan and Jeanne. “While we are certainly saddened by the impact that these storms have had on the residents of the afflicted areas, we are proud that our claims team has been so responsive in helping these folks get on with their lives.

“Right now, we are estimating after-tax losses from these hurricanes, after considering reinsurance recoveries and other catastrophe-related items, to be approximately $18.0 million or 93 cents per share (after-tax, diluted). Typically, we would expect third quarter catastrophe losses in the range of 25 to 30 cents per share.”

Hayden also noted, “We are truly encouraged to see the positive non-
catastrophe underwriting results from our core business lines, particularly in our manufactured housing, motorcycle, watercraft and site-built dwelling lines. These results demonstrate the benefit of the underwriting actions we have taken over the last several years, such as tightened underwriting criteria and rate increases. We believe these strong non-catastrophe underwriting results, coupled with our comprehensive reinsurance program and disciplined underwriting approach, demonstrate our fundamental strength and stability. We have certainly established a solid foundation for profitable
growth for 2005 and beyond.”