<PAGE>


                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549

                                      FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
    EXCHANGE ACT OF 1934 

    FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 

    OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934 

    FOR THE TRANSITION PERIOD FROM _______________ TO_______________

                           COMMISSION FILE NUMBER:  0-23830

                               CROP GROWERS CORPORATION
                (Exact name of registrant as specified in its charter)

DELAWARE                                               81-0491497
(State or other jurisdiction                           (I.R.S. Employer
of incorporation or organization)                       Identification No.)

10895 LOWELL, SUITE 300
OVERLAND PARK, KANSAS                                  66210
(Address of principal executive offices)               (zip code)

                                    (913) 338-7800
                 (Registrant's telephone number, including area code)

                 201 CROP GROWERS DRIVE, GREAT FALLS, MONTANA, 59401
                 (Former name, former address and former fiscal year, 
                            if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes____X____  No ________

The number of shares outstanding of the registrant's common stock on November 1,
1996 was 7,994,251 shares.


<PAGE>

                               CROP GROWERS CORPORATION

                                      FORM 10-Q
                           Quarter ended September 30, 1996

                                        INDEX


                                                                          Page
                                                                          -----

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements 

           Consolidated Balance Sheets as of September 30, 1996 
              (unaudited) and December 31, 1995                             3

           Consolidated Statements of Income (Loss) (unaudited) for the 
             Three and Nine Months Ended September 30, 1996 and 1995        4

           Consolidated Statements of Cash Flows (unaudited) for the 
             Nine Months Ended September 30, 1996 and 1995                  5

           Notes to Unaudited Consolidated Financial Statements             6

Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                    10


PART II - OTHER INFORMATION

Item 1. Legal Proceedings                                                  19

Item 2.   Changes in Securities                                            19

Item 3.   Defaults Upon Senior Securities                                  19

Item 4.   Submission of Matters to a Vote of Security Holders              19

Item 5.   Other Information                                                19

Item 6.   Exhibits and Reports on Form 8-K                                 19

SIGNATURES                                                                 20

                                       2

<PAGE>

                            PART I - FINANCIAL INFORMATION

                            ITEM 1. Financial Statements.

                      CROP GROWERS CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS

                                               SEPTEMBER 30,     DECEMBER 31,
                                                   1996              1995
                                                (UNAUDITED)
ASSETS                                         -----------       ------------

Investments:
  Fixed maturities, held to maturity          $  2,309,335       $ 2,311,177
  Fixed maturities, available for sale           5,860,577         5,838,391
  Equity securities, available for sale          1,923,613         1,757,540
                                              ------------       ------------
    Total investments                           10,093,525         9,907,108

Cash and cash equivalents                        4,136,565         6,980,570
Premiums receivable, net                       220,058,231        73,870,654
Prepaids and other assets                       12,996,836         8,556,765
Reinsurance balances receivable                109,692,949        31,779,006
Property and equipment, net                      5,363,711        11,687,066
Intangible assets, net                           8,304,249         9,264,662
                                              ------------       ------------
                                              $370,646,066       152,045,831
                                              ------------       ------------
                                              ------------       ------------
LIABILITIES AND STOCKHOLDERS' EQUITY 

Premiums and commissions payable              $ 79,635,400       $23,572,783
Accounts payable and other liabilities           8,577,179         8,183,036
Loss reserves                                  108,911,186        21,726,157
Reinsurance balances payable                   108,961,418        17,787,552
Note payable to bank                             7,580,000        32,245,539
Long-term debt                                   3,393,299         4,188,540
                                              ------------       ------------
                                               317,058,482       107,703,607

Redeemable preferred stock                      10,000,000                --

Stockholders' equity:
  Common stock (par value $.01):
    40,000,000 shares authorized;
    8,006,251 and 8,172,581 shares issued and 
    outstanding at September 30, 1996 and 
    December 31, 1995, respectively                 80,063            81,726
  Paid-in capital                               36,884,866        38,244,567
  Retained earnings                              6,427,549         5,881,973
  Unrealized appreciation of fixed maturity 
    and equity investments, net of taxes           232,606           208,958
  Unearned compensation                            (37,500)          (75,000)
                                              ------------      ------------
    Total stockholders' equity                  43,587,584        44,342,224

  Contingencies
                                              ------------      ------------
                                              $370,646,066      $152,045,831
                                              ------------      ------------
                                              ------------      ------------


See accompanying notes to unaudited consolidated financial statements.

                                       3

<PAGE>

                      CROP GROWERS CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                                     (UNAUDITED)

<TABLE>
<CAPTION>

                                                     THREE MONTHS ENDED             NINE MONTHS ENDED
                                                        SEPTEMBER 30,                  SEPTEMBER 30,
                                                    1996          1995              1996         1995
                                                  --------      --------          --------     --------
<S>                                            <C>           <C>             <C>            <C>
Revenues:
  Service fees                                  $17,419,027   $16,492,215     $ 96,737,736   $79,069,394
  Software and hardware sales                       184,209        62,845        1,117,015       702,154
  Premiums earned and other income                  422,143        46,325        2,850,640       381,136
  Investment income                                 363,571       669,079        1,077,882     1,383,350
                                                 ----------    ----------       ----------    ----------
    Total revenues                               18,388,950    17,270,464      101,783,273    81,536,034

Expenses:
  Agent commissions and other direct costs        6,928,570     6,938,947       62,255,866    49,887,534
  Cost of software and hardware sold                166,172        82,764          878,524       100,564
  Losses incurred and other expenses                 31,387    (3,219,306)       2,415,879    (2,871,826)
  General and administrative expenses             7,369,876     6,798,317       22,927,862    17,502,945
  Restructuring and non-core expenses             4,791,404            --        7,438,106            --
  Depreciation expense                              432,082       310,972        1,302,368       876,301
  Amortization expense                              382,413       234,026        1,216,142       663,292
  Interest expense                                  251,077       276,121        1,381,826       791,077
                                                 ----------    ----------       ----------    ----------
    Total expenses                               20,352,981    11,421,841       99,816,573    66,949,887
                                                 ----------    ----------       ----------    ----------

    Income (loss) before income taxes            (1,964,031)    5,848,623        1,966,700    14,586,147
    Income tax benefit (expense)                    662,649    (2,416,370)        (881,237)   (5,764,556)
                                                 ----------    ----------       ----------    ----------
      Net income (loss)                         $(1,301,382)  $ 3,432,253     $  1,085,463   $ 8,821,591

      Redeemable preferred stock dividend       $  (113,889)  $        --     $   (113,889)  $        --
                                                 ----------    ----------       ----------    ----------
      Net income (loss) attributable to 
        common stock                            $(1,415,271)  $ 3,432,253     $    971,574   $ 8,821,591
                                                 ----------    ----------       ----------    ----------
                                                 ----------    ----------       ----------    ----------

    Net income (loss) per common share          $      (.17)  $       .41     $        .12   $      1.06
                                                 ----------    ----------       ----------    ----------
                                                 ----------    ----------       ----------    ----------
    Weighted average common shares  
      outstanding                                 8,150,251     8,351,239        8,251,664     8,358,225
                                                 ----------    ----------       ----------    ----------
                                                 ----------    ----------       ----------    ----------

</TABLE>

        See accompanying notes to unaudited consolidated financial statements.

                                       4

<PAGE>

                      CROP GROWERS CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (UNAUDITED)

<TABLE>
<CAPTION>

                                                               NINE MONTHS ENDED
                                                                 SEPTEMBER 30,
                                                            1996              1995
                                                         ----------        ----------
<S>                                                   <C>                <C>
Operating activities:
  Net income                                           $   1,085,463     $  8,821,591
  Adjustments to reconcile net income to 
    net cash used by operating activities: 
    Depreciation                                           1,302,368           876,301
    Amortization                                           1,216,142           663,292
    Gain on sale of securities - available for sale          (61,736)         (426,879)
  Other changes:
    Premiums receivable                                 (146,187,577)     (146,026,044)
    Premiums and commissions payable                      38,208,102        48,889,840
    Accounts payable and other liabilities                   376,005         6,798,349
    Loss reserves                                         87,185,029        64,987,281 
    Reinsurance balances receivable                      (77,913,943)      (53,834,108)
    Reinsurance balances payable                          91,173,866        58,959,982
    Other                                                  1,982,074           435,419
                                                        -------------     ------------
  Net cash used by operating activities                     (330,207)       (9,854,976)

Investing activities:
  Decrease in company financed premiums                   17,854,515        24,780,160
  Purchases of equity securities - available for sale     (1,177,987)               --
  Purchases of fixed maturity securities - 
    available for sale                                      (214,612)      (10,047,852)
  Proceeds from sale of equity securities - 
    available for sale                                     1,186,525                --
  Proceeds from sale and maturities of fixed
    maturity securities - available for sale                 115,000        19,131,051
  Acquisition of Dawson, net of cash received                     --        (5,571,421)
  Capitalization of intangible assets, including
    acquisitions of businesses                              (391,964)       (6,432,132)
  Proceeds from sale of property and equipment               166,975                --
  Purchases of property and equipment                     (2,043,219)       (4,713,996)
                                                        ------------       -----------
  Net cash provided by investing activities               15,495,233        17,145,810

Financing activities:
  Net repayments of note payable to bank                 (24,665,539)      (13,052,000)
  Proceeds from issuance of long-term debt                    30,903         4,120,937
  Issuance of redeemable preferred stock                  10,000,000                --
  Redeemable preferred stock issuance costs                 (647,000)               --
  Payment of dividend on redeemable preferred stock         (113,889)               --
  Repayments on long-term debt                              (826,144)         (696,525)
  Repurchase of common stock                              (1,801,762)               --
  Issuance of common stock                                    14,400           284,850
                                                        ------------       -----------
  Net cash used by financing activities                  (18,009,031)       (9,342,738)
                                                        ------------       -----------

  Net decrease in cash and cash equivalents               (2,844,005)       (2,051,904)
  Cash and cash equivalents, beginning of year             6,980,570         2,975,363
                                                       -------------      ------------
  Cash and cash equivalents, end of period             $   4,136,565      $    923,459
                                                       -------------      ------------
                                                       -------------      ------------

</TABLE>

        See accompanying notes to unaudited consolidated financial statements.

                                       5

<PAGE>

                    CROP GROWERS CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.    QUARTERLY PRESENTATION

    The unaudited consolidated financial statements have been prepared by Crop
    Growers Corporation (the Company), pursuant to the rules and regulations of
    the Securities and Exchange Commission applicable to quarterly reports on
    Form 10-Q.  Certain information and footnote disclosures normally included
    in financial statements prepared in accordance with generally accepted
    accounting principles have been condensed or omitted pursuant to such rules
    and regulations, although management believes that the disclosures are
    adequate to make the information presented not misleading.  Results of
    operations for interim periods are not indicative of results of operations
    to be expected for the full year ending December 31, 1996.  It is suggested
    that these unaudited consolidated financial statements be read in
    conjunction with the consolidated financial statements and related notes in
    the Company's Form 10-K for the year ended December 31, 1995, as amended.

    In the opinion of management, the information furnished reflects all
    adjustments which are of a normal recurring nature and are necessary for a
    fair presentation of the Company's financial position as of September 30,
    1996 and December 31, 1995, and the results of its operations for the three
    and nine months ended September 30, 1996 and 1995, and its cash flows for
    the nine months ended September 30, 1996 and 1995.

    Certain amounts in the 1995 consolidated financial statements have been 
    reclassified to conform to the presentation in 1996.

2.  RECONCILIATION OF STOCKHOLDERS' EQUITY           1996               1995

    Balance at January 1,                        $44,342,224        $38,668,720
      Net income                                   1,085,463          8,821,591
      Change in unrealized appreciation of
        fixed maturity and equity investments,
        net of taxes                                  23,648           371,309
      Restricted stock compensation earned            37,500            37,500
      Exercise of stock options                       14,400           284,850
      Redeemable preferred stock dividend paid      (113,889)               --
      Issuance of common stock                            --           759,500
      Repurchase of common stock                  (1,801,762)               --
                                                 -----------       -----------
    Balance at September 30,                     $43,587,584       $48,943,470
                                                 -----------       -----------
                                                 -----------       -----------

    Included in the repurchase of common stock is the purchase of 76,000 and
    68,000 shares of the Company's common stock from its former President and
    Chief Executive Officer John Hemmingson and its former Executive Vice
    President Gary Black, respectively.  See footnote 5, "Separation
    Agreements" for further discussion on the repurchase of common stock.
    
3.  LINE OF CREDIT

    The Company had two secured revolving line of credit agreements in the 
    amount of $35 and $15 million which matured on October 15, 1996. The $35 
    million facility has been extended through November 25, 1996.  The $15 
    million facility was available solely to pay crop hail losses with 
    respect to policies issued, serviced or managed by or through the 
    company or its subsidiaries.  No amounts were drawn on this line during 
    1996 and the Company does not anticipate needing to renew this line in 
    1997. The $7.6 million outstanding under the $35 million facility at 
    September 30, 1996 was repaid during October. Since then, the Company 
    has not borrowed any additional amounts under the line of credit.

    Historically, the Company has utilized the line of credit during the 4th 
    quarter to finance premiums due to the Federal Crop Insurance Corporation 
    "FCIC" which have not yet been paid to the Company by the policyholder.  
    Under the Standard Reinsurance Agreement "SRA", the FCIC charges interest 
    at a rate of 1.25% per month on overdue premiums and the insurance 
    company, which is responsible for payment of the policyholder's premiums 
    to the FCIC, passes such interest cost on to the policyholder. The 
    Company has agreed with its contracting insurance companies to assume the 
    responsibility

                                       6

<PAGE>
                    CROP GROWERS CORPORATION AND SUBSIDIARIES
         NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

    for such payments to the FCIC and, therefore, receives interest payments 
    made by policyholders on deferred premiums. The Company and Fireman's 
    Fund Insurance Company are currently negotiating an agreement whereby 
    Fireman's Fund would finance the premiums and the Company would receive a 
    service fee as its compensation for administering the ultimate collection of
    premium payments by policy holders. The Company has and is also 
    discussing financing these premiums using a line of credit.

    The FCIC provides an expense reimbursement advance to the Company once 
    the premium due from a policyholder has been calculated and accepted 
    by the FCIC which is in advance of when the premium is paid.  The Company 
    also uses the line of credit to finance working capital needs prior to 
    receiving this advance from the FCIC.  The Company generally utilizes 
    the line of credit for this purpose from April through September. The 
    Company has and is currently in the process of negotiating with lenders to 
    secure additional working capital financing. If the Company were unable 
    to secure a credit facility, it would be required to seek additional 
    sources of financing for its working capital needs. Such sources could 
    include dividends from its insurance subsidiaries, issuance of debt or 
    equity securities, or the sale of assets.

4.  LEGAL MATTERS 

    INDEPENDENT COUNSEL INVESTIGATION.  On May 30, 1996, the Company, its 
    former President and Chief Executive Officer John Hemmingson and its 
    former Executive Vice President Gary Black were indicted by a federal 
    grand jury in Washington, D.C. in connection with the previously 
    announced investigation being conducted by the Independent Counsel 
    appointed to investigate matters relating to former Secretary of 
    Agriculture, Mike Espy. (UNITED STATES OF AMERICA V. CROP GROWERS 
    CORPORATION, JOHN J. HEMMINGSON, AND GARY A. BLACK (CRIMINAL ACTION NO. 
    96-0181 (6K))) The indictment alleges conspiracy to violate federal 
    election laws, false statements to a government agency, falsification of 
    books and records, false statements to auditors, various securities law 
    violations and other matters.  The trial is scheduled to begin on 
    January 23, 1997 in federal court in Washington D.C.  The Company formed 
    a special committee (the "Special Committee"), consisting of outside 
    directors of the Board of Directors, which had the authority and discretion 
    to take any and all appropriate actions relating to the investigation to 
    review matters related to the investigation. In August 1996, the 
    Company announced that the Board of Directors would have the authority to 
    take actions with respect to the investigation and the special 
    committee's function would end. On August 6, 1996, Mr. Hemmingson, but 
    not the Company, was added to a previous federal indictment in New 
    Orleans of Henry Espy, Alvarez Ferrouillet and other entities. The 
    charges against Mr. Hemmingson involve money laundering and other matters 
    being investigated by the Independent Counsel.  The trial is scheduled to 
    begin on December 2, 1996 in federal court in New Orleans.  The Company 
    believes that Mr. Hemmingson intends to defend the New Orleans matter 
    vigorously. It is not possible to predict what adverse consequences, if 
    any, would flow to the Company from an outcome unfavorable to Mr. 
    Hemmingson in that proceeding.

    The Company intends to vigorously defend the charges brought against it 
    by the Independent Counsel.  Although the ultimate outcome of the 
    proceedings cannot be determined, if the outcome is unfavorable, the 
    Company could be subject to substantial monetary fines and other 
    sanctions.  In addition, the charges or convictions could effect the 
    ability of the Company to participate in the MPCI program or could 
    result in state insurance regulatory issues.  Any such result would 
    likely have a material adverse effect on the Company, its results of 
    operations, financial position and liquidity.  No provision for any 
    liability that may result from events relating to the charges or 
    convictions have been made in the Company's Consolidated Financial 
    Statements. 

    SHAREHOLDER LITIGATION.  On May 22, 1995, a complaint in an action entitled
    JEANNE M. WEILEIN VS. JOHN HEMMINGSON, GARY BLACK AND CROP GROWERS
    CORPORATION (CIV. NO. 95-58-GF-PGH) was filed in the United States District
    Court for the District of Montana.  On May 26, 1995, a complaint in an
    action entitled SANDRA L. ING. VS. JOHN HEMMINGSON, GARY BLACK AND CROP
    GROWERS CORPORATION (CIV. NO. 95-59-GF-PGH) was filed in the same court. 
    Each suit was filed by one shareholder of the Company as a class action on
    behalf of all persons who purchased the Company's common stock between
    February 13, 1995 and May 16, 1995.  Except for the identities of the named
    plaintiffs, the complaints are identical in all respects.  The two suits

                                       7

<PAGE>
                   CROP GROWERS CORPORATION AND SUBSIDIARIES
         NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

    have been consolidated by the court into a single action entitled IN RE
    CROP GROWERS SECURITIES LITIGATION (CIV. NO. 95-58-GF-PGH).  The complaint
    alleges, among other things, that the Company made false and misleading
    statements in publicly filed or disseminated documents to inflate
    artificially the price of its common stock.  The complaint seeks
    compensatory damages for the class. On March 20, 1996, the Magistrate Judge
    issued a Report and Recommendation granting the plaintiffs' motion for
    class certification and issued an Order denying defendants' motion to
    dismiss. The Company has filed objections to the Magistrate's Report and
    Recommendation and appealed his Order to the District Court. The District
    Court currently has the Company's objections and appeal under advisement. 
    The parties are engaging in discovery, which to date has primarily involved
    the answering of written questions and production of documents.  Deposition
    discovery has just commenced.

    The Company considers the claims made in the complaint to be without merit
    and intends to continue to vigorously defend against them.  However, an
    unfavorable decision in this case would likely have a material adverse
    effect on the Company's results of operations, financial position or
    liquidity.  No provision for any liability that may result from events
    relating to the charges have been made in the Company's Consolidated
    Financial Statements.

5.  SEPARATION AGREEMENTS

    On September 23, 1996, the Company entered into separation agreements with
    its former President and Chief Executive Officer John Hemmingson and its
    former Executive Vice President Gary Black.  These agreements terminated
    the existing leave of absence agreements between the Company and each of
    Messrs. Hemmingson and Black as of June 30, 1996.  As part of the
    arrangement, Messrs. Hemmingson and Black no longer receive any
    compensation or benefits from the Company and the Company agreed to
    purchase 68,000 and 64,000 shares of its common stock from Messrs.
    Hemmingson and Black, respectively, at a price of $9.88 per share (based
    on, among other factors, the market price of the stock on the date the
    agreement in principle was reached, and the termination of compensation and
    benefits to Messrs. Hemmingson and Black).
    
    Additionally, the Company agreed to purchase up to an additional 8,000 
    and 4,000 shares of common stock monthly from each of Messrs. Hemmingson 
    and Black on the first day of September through January of 1997 at 
    prices related to the then bid and asked price of the stock.  
    Additionally, Mr. Hemmingson agreed to reduce his ownership in the 
    Company to less than 10% of the voting stock on an as converted basis by 
    June 30, 1998.  As a part of the separation agreements, Messrs. 
    Hemmingson and Black have also agreed to enter into proxy agreements 
    pursuant to which an independent third party institutional proxy holder 
    will exercise voting authority with respect to all matters on which 
    shares then owned by either Messrs. Hemmingson or Black are entitled to 
    vote.  The proxy arrangements will not be effective until receipt of 
    necessary insurance regulatory approvals from the state insurance 
    commissioners of the states in which the Company's insurance companies 
    are domiciled.  Messrs. Hemmingson and Black will, subject to certain 
    conditions, be able to dispose of their shares during the period that 
    the proxy agreements remain in effect.  Under certain circumstances, 
    Fireman's Fund Insurance Company has a first right of refusal on shares 
    sold by either Messrs. Hemmingson or Black.  The proxies will remain in 
    place until the earlier of the acquittal of Messrs. Hemmingson and Black 
    under the indictments obtained by the Independent Counsel or the end of 
    the suspension/debarment periods currently being imposed by the Federal 
    Crop Insurance Corporation on Messrs. Hemmingson and Black.
        
    At September 30, 1996, the Company had purchased 76,000 and 68,000 shares
    from Messrs. Hemmingson and Black, respectively at an average price of
    $9.78 per share.
                                       8

<PAGE>

                    CROP GROWERS CORPORATION AND SUBSIDIARIES
         NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

6.  RESTRUCTURING AND NON-CORE EXPENSES

    The following is a breakdown of restructuring and non-core expenses.

<TABLE>
<CAPTION>

                                                        Three months ended    Nine months ended
                                                        September 30, 1996    September 30, 1996
                                                        ------------------    ------------------
    <S>                                                 <C>                   <C>
    Write down and losses on assets to be disposed 
      and elimination of non-core operations               $ 1,654,000            $ 1,847,000
    Other restructuring charges                                761,000                761,000
                                                           -----------            -----------
         Total restructuring charges                         2,415,000              2,608,000
                                                           -----------            -----------

    Shareholder litigation - defense costs                      33,000                168,000
    Independent counsel matters - defense costs              1,313,000              2,732,000
                                                           -----------            -----------
         Total defense costs                                 1,346,000              2,900,000
                                                           -----------            -----------

    Relocation costs                                         1,030,000              1,930,000
                                                           -----------            -----------
         Total restructuring and
           non-core expenses                               $ 4,791,000            $ 7,438,000
                                                           -----------            -----------
                                                           -----------            -----------

</TABLE>

    As part of the Company's consolidation efforts, the Company has recorded 
    write downs and losses on assets to be disposed consisting of real estate 
    and software mapping inventory. The Company has also recorded expenses 
    related to the elimination of certain business operations including 
    travel agency and employee leasing ventures. These amounts were written 
    off or down to net realizable value in the three months ended September 
    30, 1996. At September 30, 1996, the Company had $7.2 million recorded as 
    assets to be disposed which are included in prepaids and other assets. 
    The Company anticipates selling these assets over the next twelve months.

    The Company continues to vigorously defend the Independent Counsel
    indictment and the shareholder litigation.  Those costs incurred in
    defending these actions, including the advancement of costs under the 
    indemnification agreements with Messrs. Hemmingson and Black, have been 
    recorded as defense costs.

    On March 28, 1996, the Company announced that it was relocating its
    headquarters and main office to Overland Park, Kansas. Since then, the
    Company has substantially completed relocation efforts and anticipates
    completion of these efforts by the end of 1996.

7.  ISSUANCE OF REDEEMABLE PREFERRED STOCK

    On July 10, 1996, Fireman's Fund Insurance Company purchased 10,000 shares
    of a new series of preferred stock of the Company for $10 million.  The
    preferred stock is convertible into common stock at a price of $13.25 per
    share (equivalent to 754,717 shares), subject to certain adjustments.  The
    preferred stock pays a quarterly dividend (on each January 1, April 1, July
    1 and October 1 commencing October 1, 1996) of 5% per annum and is entitled
    to vote on all matters brought before the common stockholders on an 
    as-converted basis.  The preferred stock is redeemable at the option of the
    Company on or after July 9, 1997, at $1,000 per share plus all dividends
    accumulated and unpaid on the date fixed for redemption; however, the
    Company may not redeem the shares prior to July 9, 2001 unless the price of
    the common stock exceeds a redemption threshold set forth in the
    certificate of designations creating the preferred stock.  The preferred
    stock is subject to mandatory redemption on July 9, 2006.  Subsequent to 
    the issuance of preferred stock, the Company has 10,000,000 shares 
    authorized (par value $.01) and 10,000 shares issued and outstanding.

                                       9

<PAGE>

                      CROP GROWERS CORPORATION AND SUBSIDIARIES
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                              AND RESULTS OF OPERATIONS

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
          RESULTS OF OPERATIONS.

FORWARD-LOOKING INFORMATION

Except for the historical information contained in this Quarterly Report on Form
10-Q, matters discussed herein may constitute forward-looking information.  Such
forward-looking information reflects the Company's current best estimates
regarding future operations, but, since they are only estimates, actual results
may differ materially from such estimates.

A variety of events, most of which are outside the Company's control, cannot 
be accurately predicted and may materially impact estimates of future 
operations. Important among such factors are weather conditions, natural 
disasters, changes in state or federal laws or regulations, price competition 
impacting premium levels and agent commissions, issues related to the 
indictments brought by the Independent Counsel, and general economic 
conditions.  In addition, and more specifically, federal regulations 
governing aspects of crop insurance are frequently modified, and any such 
changes may impact the Company's results of operations.

GENERAL

The Company operates principally in three business segments:
    
    Agency operations:  Servicing of multi-peril crop insurance ("MPCI"), crop
    hail insurance and other insurance products underwritten by third party
    insurance companies as well as its own property and casualty insurance
    subsidiaries.
    
    Software operations:  Development, marketing, and sale of proprietary
    software and related products to agents, farmers and others.

    Insurance operations:  Underwriting of premiums by the Company's property
    and casualty insurance subsidiaries and the developing of risk management
    strategies for all premiums serviced by the Company.

AGENCY OPERATIONS

SERVICE FEES

    The Company's agency operations revenues include service fees related to
the servicing of MPCI and crop hail insurance and excess loss adjusting expense
reimbursement related to MPCI premiums serviced.
    
    For MPCI buy-up coverage, the Company is entitled to the expense
reimbursement payable by the FCIC.   This expense reimbursement is passed
through to the Company under its MPCI contracts with third party insurance
companies and is paid directly to the Company for MPCI premiums underwritten by
its property and casualty insurance subsidiaries. For the 1997 crop year,
beginning July 1, 1996, the expense reimbursement for buy-up coverage has been
established by the FCIC at 29%.  For the 1996 and 1995 crop years, the expense
reimbursement for buy-up coverage was established by the FCIC at 31%.

    For MPCI basic coverage, the Company retains a portion of the
administrative fee paid by the insured and receives an amount for loss adjusting
expenses (regardless of the loss experience of the insureds), which amounts are
passed through or paid directly to the Company under its MPCI contracts. For
basic coverage, the Company's portion of the administrative fee is up to the
first $100 of the fee paid by the insured and the loss adjusting expense
reimbursement which is equal to 4.7% of an imputed premium.

    The expense reimbursement level for the 1998 and 1999 crop years for buy-up
coverage is limited under the Federal Crop Insurance Reform Act of 1994 (the
"Reform Act") to levels not to exceed 28% and 27.5%, respectively.  Because the
Company's MPCI service fees 

                                      10

<PAGE>
                      CROP GROWERS CORPORATION AND SUBSIDIARIES
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS (CONTINUED)

are directly related to the expense reimbursement established by the FCIC, 
the Company's future MPCI service fees will be affected by the reduction in 
the level of expense reimbursement.  Prior to the 1997 crop year, the impact 
of FCIC expense reimbursement level reductions on the Company's net earnings 
had been minimized because the Company had reduced its agents' commissions in 
order to minimize the impact on its margin on MPCI business. MPCI agent 
commissions vary by agent depending on such factors as the volume of premium 
produced by the agent, whether or not the agent is responsible for any direct 
costs and other competitive factors. The Company believes, based on 
competitive factors within the industry, that it will have to absorb a 
significant portion of the expense reimbursement reduction in the 1997 crop 
year.  For the 1998 crop year the Company will negotiate with agents 
regarding reduced commissions on buy-up coverage to offset the expense 
reimbursement reduction, however, there is no assurance that any reduction 
will be passed through to agents as a result of competitive or other factors.

    Under its MPCI contracts, the Company is also entitled to receive any 
excess loss adjustment expense reimbursement from the FCIC.  The FCIC pays 
contracting insurance companies an amount up to 4% of premium on buy-up 
coverage for excess loss adjusting expenses on such coverage if loss ratios 
on the Company's total book of MPCI business, by state and by risk retention 
fund, are in excess of the ratios established by the FCIC.  Generally, the 
excess loss adjustment expense reimbursement increases as the loss ratio 
increases.  Under basic coverage policies, the FCIC pays contracting 
insurance companies an amount up to 1.7% of the imputed premium for excess 
loss adjusting expenses in the event loss ratios on the overall book of basic 
coverage are in excess of loss ratios established by the FCIC. 

    The Company's service fees related to crop hail insurance are a percentage
of the premiums serviced for third party insurance companies.

AGENT COMMISSIONS AND OTHER DIRECT COSTS

    Agent commissions and other direct costs related to marketing and 
servicing MPCI are obligations of the Company and, accordingly, are reflected 
as expenses of the Company. Additionally, agent commissions and other direct 
costs on crop hail insurance are generally direct obligations of the Company 
and, therefore, are reflected as expenses of the Company.  Under the 
Company's crop hail contract with CNA Insurance Companies ("CNA"), agent 
commissions and other direct costs, except loss adjusting expense, are the 
direct obligations of CNA and therefore are not reflected as an expense of 
the Company.

    Other direct costs include overwrite fees payable to third party 
insurance companies, loss adjusting expenses, premium taxes on crop hail 
insurance, bureau fees and other costs.  These costs, except for loss 
adjusting expense, vary proportionally with the amount of premiums serviced.  
As a result of the Fireman's Fund alliance, the Company will no longer pay 
any overwrite fees on MPCI with Fireman's Fund.

    Loss adjustment expenses are based on management's estimate of all 
Company adjusting costs to settle claims incurred or to be incurred on 
policies on which revenue has been recognized.  The estimate is reviewed 
periodically and variances, if any, in estimated versus actual amounts are 
reflected in current operations.  In some instances, agents are responsible 
for loss adjusting expenses or other direct costs associated with policies 
sold by them, and those agents generally receive higher commissions in return 
for the assumption of those direct costs.  Bureau fees are fees charged by 
National Crop Insurance Service for providing rates and procedures required 
to be used by the FCIC.

RECOGNITION OF SERVICE FEES AND DIRECT COSTS

    Crop Growers recognizes service fees from MPCI policies and the related 
direct costs as of the sales closing date for the particular policy.  The 
sales closing date, which is established by the FCIC, is the date on which 
coverage for a crop must be bound or renewed by the policyholder and when 
substantially all required services relating to placing the insurance have 
been rendered by the Company.  Unless canceled by the farmer, policies in 
place from the prior year automatically renew on the same terms on the sales 
closing date.

    Since sales closing dates precede the date on which farmers plant their

                                      11
<PAGE>

                      CROP GROWERS CORPORATION AND SUBSIDIARIES
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (CONTINUED)

insured crop, MPCI coverage and related premiums are estimated by the Company 
until the farmer subsequently submits his or her report on actual acreage 
planted.  The effect of changes in such estimated premiums are included in 
the results of operations in the period in which the estimates are changed.

    For crop hail insurance, service fees are recognized when the insurance 
coverage is accepted by the insurance company, which is concurrent with the 
completion of substantially all services required by the Company.  Direct 
costs such as agent commissions, loss adjusting and premium taxes are 
recognized at the time service fees are recognized.

SOFTWARE OPERATIONS

    The Company's software operations revenues include sales of VisAg-TM- 
software, mapping products, and hardware products. Costs include commissions 
on software and mapping sales, mapping product development costs, hardware 
costs, and other direct costs such as shipping, postage, and packaging.  The 
VisAg product is a PC-based map driven farm management system designed for 
use by small family farms to large corporate operations. Mapping products are 
computer generated geo-referenced maps which allow an agent or farmer to view 
an entire agricultural operation on a single map. Hardware products represent 
various hardware products manufactured by third parties sold to agents and 
other outside customers.  

    Revenues from the sale of VisAg, mapping products and hardware are 
recognized upon shipment to the customer.

    Sales of VisAg and other mapping products have not made a 
significant contribution to revenues or earnings since their introduction. 
Management continues to assess the VisAg product marketing and distribution 
strategy and does not expect to achieve significant profitability in its 
software operations over the next nine to fifteen months.  The Company will 
seek to manage these operations to a break even level over this period.  The 
Company does, however, continue to believe map based technology is important 
in supporting its crop insurance operations and will continue to develop 
products for use by its agency distribution network.  

INSURANCE OPERATIONS

    The Company's insurance operations include premiums earned and losses 
incurred on MPCI buy up and basic coverages, crop hail, and other insurance 
coverages underwritten and retained by the Company's property and casualty 
insurance subsidiaries.  Additionally, the Company has arrangements with its 
third party insurance companies pursuant to which it is entitled to receive a 
percentage of the underwriting gains, if any, on crop insurance it services. 
These gains, or profit sharing, are reflected as additional service fees.

    The Company's operating results may vary significantly depending on the 
underwriting results of the premiums serviced and underwritten by it.  The 
Company does not assume any of the underwriting loss under its servicing 
contracts with third party insurers; and under the Company's servicing 
agreement with Fireman's Fund, there is no loss carryforward to reduce future 
underwriting gains.  Underwriting gains or losses on crop insurance are 
generally not determinable until sometime after the second quarter of any 
year and, accordingly, the Company expects that revenues, if any, from these 
arrangements will typically be recognized in the third and fourth quarters. 
Underwriting gains on premiums serviced by the Company are recognized by the 
Company as additional service fees and, because they generally have very low 
related expenses, can have a material impact on the Company's operating 
results. Accordingly, although the Company's risk management strategy is to 
minimize its exposure to underwriting risk, the Company's earnings can be 
materially affected by factors which impact underwriting results and, 
accordingly, its portion of any underwriting gains, including the timing and 
severity of losses from storms and other natural perils.

    For the 1996 and 1997 crop years, the Company did not retain any MPCI 
premiums underwritten by its insurance companies. For the 1996 crop hail 
season, the Company retained 15% of crop hail premiums underwritten by Dawson 
Hail Insurance Co.  The Company has secured stop loss coverage 

                                      12

<PAGE>
                      CROP GROWERS CORPORATION AND SUBSIDIARIES
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                       AND RESULTS OF OPERATIONS (CONTINUED)

whereby the reinsurers indemnify the Company for significantly all of the 
aggregate net losses in excess of 80% of net earned premiums retained by the 
Company.  The reinsurers are not obligated for aggregate net losses in excess 
of 180% of net earned premiums.

INVESTMENT INCOME

    The Company derives investment income from interest charged to 
policyholders who elect not to pay their MPCI premiums on the FCIC 
established due date and from investments. Under the MPCI program, the FCIC 
charges interest at a rate of 1.25% per month on overdue premiums and the 
insurance company, which is responsible for payment of the policyholder's 
premiums to the FCIC, passes such interest cost on to the policyholder.

    The Company has agreed with its contracting insurance companies to assume 
the responsibility for such payments to the FCIC and, therefore, receives 
interest payments made by policyholders on deferred premiums.  In the event 
of an insured loss, the Company deducts premium payments and interest, if 
any, from the claim payment to the farmer. 

    The Company also earns investment income on interest and dividends on 
investment securities and excess cash invested at certain times of the year, 
which typically occurs after MPCI and crop hail premiums are collected. Also 
included in investment income are income and losses on investments in 
companies which are less than 50% owned, which are accounted for under the 
equity method. For the three and nine months ended September 30, 1996, 
losses on investments in less than 50% owned companies were $138,000 and 
$382,000, respectively. 

SEASONALITY

    The Company's quarterly operating results vary substantially from quarter 
to quarter as a result of various factors, including MPCI sales closing 
dates, crop production cycles and recognition of underwriting gains, if any.  
The Company recognizes the highest amount of service fees and related direct 
costs in the first quarter.  The majority of these amounts are attributed to 
service fees related to MPCI.  Virtually all of the Company's service fees 
and direct costs related to crop hail insurance are recognized in the second 
quarter.  The Company generally recognizes its second highest amount of 
revenues and related direct costs in the third quarter because the MPCI sales 
closing date for the majority of fall crops is September 30.  In addition, 
the Company may recognize a portion of underwriting gains or losses, if any, 
on the premiums it underwrites or services in the third quarter.  In the 
fourth quarter, the Company also recognizes underwriting gains or losses, if 
any, on the premiums it underwrites or services, most of the interest income 
on MPCI deferred premium financing and service fees on MPCI premiums with 
sales closing dates occurring in the fourth quarter.  Crop Growers cannot 
predict whether MPCI sales closing dates will be changed in the future, but 
any such change could have a material effect on the Company's quarterly 
results of operations.  Because the Company's business is directly tied to 
the production cycle of crops, the Company expects that seasonal patterns in 
its operating results will continue.

    The following table sets forth MPCI and crop hail premiums serviced by 
quarter.  MPCI premiums for 1995 and 1996 crop years have been adjusted to 
reflect actual premiums serviced by quarter.
<TABLE>
<CAPTION>
                          Three months ended    Three months ended    Three months ended    Nine months ended
                              March 31,              June 30,            September 30,        September 30,
                           1996        1995      1996        1995       1996       1995       1996      1995
                          -----       -----     -----       -----      -----      -----      -----     -----
<S>                     <C>         <C>       <C>         <C>        <C>        <C>        <C>       <C>
Premiums serviced
  (in millions)
  MPCI Buy-up            $183.1      $126.4    $  --       $   --     $ 24.3     $ 32.6     $207.4    $159.0
       Basic               34.5        28.5       --           --        5.8        6.6       40.3      35.1
                          -----       -----     -----       -----      -----      -----      -----     -----
         Total           $217.6       154.9    $  --       $   --     $ 30.1     $ 39.2     $247.7    $194.1
                          -----       -----     -----       -----      -----      -----      -----     -----
                          -----       -----     -----       -----      -----      -----      -----     -----
    Crop Hail            $   --      $   --    $ 76.4      $ 63.3     $  6.7     $  6.8     $ 83.1    $ 70.1
                          -----       -----     -----       -----      -----      -----      -----     -----
                          -----       -----     -----       -----      -----      -----      -----     -----
</TABLE>
                                      13

<PAGE>
                      CROP GROWERS CORPORATION AND SUBSIDIARIES
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS 

THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

    AGENCY OPERATIONS.  Service fees were $17.4 million for the three months 
ended September 30, 1996 compared to $16.5 million in the three months ended 
September 30, 1995. In the three months ended September 30, 1995, service 
fees were reduced by $5.2 million attributed to premium estimate revisions 
related to the 1995 crop year.  There were no such premium estimate revisions 
made in the three months ended September 30, 1996. Without giving effect to 
this adjustment, service fees decreased $4.3 million for the three months 
ended September 30, 1996 from the comparable period in 1995.  Total MPCI 
premiums serviced in the three months ended September 30, 1996 were $30.1 
million as compared to $39.2 million in the three months ended September 30, 
1995.  The premium decrease was attributed primarily to the loss of premium 
from the Kansas Farm Bureau, which is now performing its own servicing in 
house, of approximately $6.4 million.  Also contributing to the decrease was 
the loss of of premium written by other agencies who elected to have their 
premiums serviced by other insurance companies.  Management believes that the 
company's premiums in the fourth quarter 1996 and the first quarter 1997 will 
continue to be negatively inpacted by certain factors including the 
dissolution of its MPCI agreement with CNA Insurance Company "CNA." See 
"Restructuring and Non-Core Expenses."

    Also contributing to the decrease was the effect of the reduction of the 
expense reimbursement from 31% in the 1996 crop year to 29% in the 1997 crop 
year.  This resulted in a reduction of approximately $500,000 in service fee 
revenues on the premiums serviced in the three months ended September 30, 
1996.

    The Company also recorded $6.8 million in profit sharing revenue 
in the three months ended September 30, 1996 as compared to $5.2 million in 
the three months ended September 30, 1995.  The increase in profit 
sharing was primarily a result of increased premiums serviced in the 1996 
crop year. 

    In addition to profit sharing, the Company also recorded excess loss 
adjusting expense revenue of $702,000 in the three months ended September 30, 
1996 as compared to $2.6 million in the three months ended September 30, 
1995. Included in the $2.6 million of excess loss adjusting expense revenue 
in the three months ended September 30, 1995 was $1.7 million of excess loss 
adjusting expense revenue associated with hold harmless provisions on certain 
prevented planting claims.  No similar amounts have been recorded relating 
to prevented planting claims in the three months ended September 30, 1996. 

    Agent commissions and other direct costs were $6.9 million for both the 
three months ended September 30, 1996 and 1995.  In the three months ended 
September 30, 1995, agent commissions and other direct costs were reduced by 
$2.6 million attributed to premium estimate revisions related to the 1995 
crop year. Without giving effect to this adjustment, agent commissions and 
other direct costs decreased by $2.6 million in the three months ended 
September 30, 1996 from the comparable period in 1995. This decrease was 
primarily the result of the reductions in premiums serviced in the three 
months ended September 30, 1996.  Also contributing to the decrease was the 
elimination of the majority of the overwrite fees in the 1997 crop year.

    SOFTWARE OPERATIONS.  Software and hardware sales increased $121,000 to 
$184,000 for the three months ended September 30, 1996 compared to $63,000 in 
the three months ended September 30, 1995.  Cost of software sold increased 
$83,000 in the three months ended September 30, 1996 to $166,000 from $83,000 
in three months ended September 30, 1995.  The increases were attributed to 
sales of VisAg which was introduced in December 1995, and increased sales of 
mapping products.

    INSURANCE OPERATIONS.  During the third quarter of 1996, the Company 
retained 15% of the crop hail premiums underwritten by its insurance company 
subsidiary Dawson Hail Insurance Co. ("Dawson"). For the three months ended 
September 30, 1996, Dawson wrote $2.3 million in crop hail premiums.  These 
premiums have been reflected in the accompanying financial statements 
assuming an approximate 40.0% loss ratio.  Dawson was not acquired until July 
14, 1995, which was after most crop hail premiums were written. Virtually all 

                                      14
<PAGE>

                      CROP GROWERS CORPORATION AND SUBSIDIARIES
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS (CONTINUED)

other premiums underwritten by the Company's property and casualty insurance 
subsidiaries are reinsured with third party insurance companies.

    Included in the three months ended September 30, 1995, was $3.2 million 
in underwriting gains.  In connection with the purchase of Dawson, at July 
14, 1995, initial estimates were made of premiums and losses related to the 
MPCI and crop hail business underwritten by Dawson prior to the acquisition.  
The Company's practice is to estimate a breakeven underwriting result until 
late in the third quarter, when more information is available on the 
underwriting results of its premiums serviced.  Subsequent to the acquisition 
of Dawson, the FCIC changed the MPCI program to provide insurance companies 
relief for most of the prevented planting losses, and as a result the level 
of loss reserves estimated at the acquisition date was higher than the amount 
ultimately necessary.  This reduction of loss reserves along with other 
changes in estimates made as of the acquisition date, resulted in the 
business acquired having an underwriting gain.

    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
increased 8.4% in the three months ended September 30, 1996 to $7.4 million from
$6.8 million in the three months ended September 30, 1995.  The increase was due
primarily to increased costs incurred in servicing the year to year increase 
in MPCI and crop hail premium volumes serviced by the Company. General and 
administrative expenses increased $600,000 in the three months ended September 
30, 1996 as compared to the same period last year, but were down $1.0 million 
from the three months ended June 30, 1996. For the fourth quarter of 1996, 
the Company expects general and administrative expenses to be significantly 
lower than the same period last year.

    RESTRUCTURING AND NON-CORE EXPENSES.  As a result of managements assessment 
of the Company's core operation and focus on improving the consistency of its 
financial performance and improving shareholder returns, the Company has 
recorded write downs and losses on assets to be disposed consisting of 
real estate and software mapping. The Company has also recorded expenses 
related to the elimination of certain business operations including travel 
agency and employee payroll leasing ventures.

    As a result of the dissolution of its MPCI agreement with CNA, the 
Company is in the process of transferring or requesting agents to cancel and 
rewrite MPCI policies previously written on CNA paper to Fireman's Fund, or 
one of its insurance subsidiaries' paper.  For other competitive factors, 
including significant incentive fees being offered to agents by competitors 
to induce agents to transfer their books of business, the Company has offered 
incentive fees to agents to compensate them for obtaining the necessary 
cancellation and rewrite forms from policyholders. In the three months ended 
September 30, 1996, the Company agreed to pay approximately $200,000 in such 
incentive fees. The Company expects to pay approximately $1.0 to $1.3 million 
of additional incentive fees during the next six months as a part of the 
cancellation and rewrite process. The Company anticipates accruing these 
amounts in the fourth quarter 1996 and first quarter 1997 consistent with the 
company's revenue recognition method.  The Company believes these costs are a 
one time expenditure and will not be incurred after the first quarter 1997.

     In the three months ended September 30, 1996, the Company incurred 
approximately $1.3 million in expenses, primarily legal fees, in connection 
with the indictments of the Company and certain of its former officers by the 
Independent Counsel appointed to investigate matters relating to former 
Secretary of Agriculture, Mike Espy. The Company is currently advancing 
expenses for Messrs. Hemmingson and Black pursuant to the advancement 
provisions of the indemnification agreements with the Company. The Company 
also incurred approximately $33,000 in the three months ended September 30, 
1996 in connection with defending a shareholder class action lawsuit filed in 
May 1995. The Company expects these legal expenses to continue to be 
significant for the foreseeable future. See Note 4 and 6 of Notes to Unaudited 
Consolidated Financial Statements.

    The Company also incurred approximately $1.0 million in relocation costs as
part of the relocation of the Company's main office to Overland Park, Kansas. 
The Company expects the relocation to be substantially completed by December
1996.  The Company expects to offset the relocation costs through the reduction
in its workforce occurring as a part of the relocation and other administrative
cost savings over the next year.

                                      15

<PAGE>

                      CROP GROWERS CORPORATION AND SUBSIDIARIES
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS (CONTINUED)


    DEPRECIATION AND AMORTIZATION EXPENSE.  Depreciation and amortization
expenses increased to $815,000 in the three months ended September 30, 1996 from
$545,000 for the three months ended September 30, 1995.  The increase was
primarily a result of increased property and equipment purchased in 1995 and an
increase in the amortization of intangible assets as a result of 1995
acquisitions.

NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

    AGENCY OPERATIONS.  Service fees increased 22.4% to $96.7 million for the 
nine months ended September 30, 1996 compared to $79.1 million in the nine 
months ended September 30, 1995.  The increase in service fees was primarily 
the result of increased MPCI premiums serviced primarily attributable to 
acquisitions made in 1995 and FCIC established rate increases as well as 
increased crop hail premiums serviced. MPCI buy up and basic coverage 
premiums serviced in the nine months ended September 30, 1996 were $207.4 
million and $40.3 million, respectively, as compared to $159.0 million and 
$35.1 million in the nine months ended September 30, 1995.  Crop hail 
premiums serviced in the nine months ended September 30, 1996 were $83.1 
million as compared to $70.1 million in the nine months ended September 30, 
1995.

     Agent commissions and other direct costs increased 24.8% to $62.3 
million for the nine months ended September 30, 1996 compared to $49.9 
million for the nine months ended September 30, 1995.  The increase in agent 
commissions and other direct costs was the result of the increased MPCI and 
crop hail premiums serviced by the Company.

    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses 
increased 31.0% in the nine months ended September 30, 1996 to $22.9 million 
from $17.5 million in the nine months ended September 30, 1995. The increase 
was due primarily to increased costs incurred in servicing the year to year 
increase in the MPCI and crop hail premium volumes serviced by the Company.

    RESTRUCTURING AND NON-CORE EXPENSES.  As part of managements assessment 
of the Company's core operation and focus on the improvement of its financial
performance and improved shareholder returns, the Company has recorded write 
downs and losses on assets to be disposed consisting of real estate and 
software mapping. The Company has also recorded expenses related to the 
elimination of certain business operations including travel agency and 
employee payroll leasing ventures. For a discussion of incentive fees paid to 
agents in connection with the cancellation/rewrite process, see the Three 
Months discussion.

    In the nine months ended September 30, 1996, the Company incurred 
approximately $2.7 million in expenses, primarily legal fees, in connection 
with the indictments of the Company and certain of its former officers by the 
Independent Counsel appointed to investigate matters relating to former 
Secretary of Agriculture, Mike Espy. The Company also incurred approximately 
$168,000 in the nine months ended September 30, 1996 in connection with 
defending a shareholder class action lawsuit filed in May 1995.

    The Company also incurred approximately $1.9 million in relocation costs 
as part of the relocation of the Company's main office to Overland Park, 
Kansas. 


                                      16
<PAGE>
                      CROP GROWERS CORPORATION AND SUBSIDIARIES
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS (CONTINUED)

    DEPRECIATION AND AMORTIZATION EXPENSE.  Depreciation and amortization 
expenses increased to $2.5 million in the nine months ended September 30, 
1996 from $1.5 million for the nine months ended September 30, 1995.  The 
increase was primarily a result of increased property and equipment purchased 
in 1995 and an increase in the amortization of intangible assets as a result 
of 1995 acquisitions.

    INTEREST EXPENSE.  Interest expense increased 74.7% to $1.4 million in the 
nine months ended September 30, 1996 from $791,000 in the nine months ended 
September 30, 1995. The increase in interest expense was primarily due to 
additional borrowings necessary to finance MPCI deferred premiums and the 
increase in operating expenses necessary to service the increase in premium 
volumes.

LIQUIDITY AND CAPITAL RESOURCES

    Cash flows for the Company's MPCI and crop hail businesses differ in 
certain respects from cash flows associated with more traditional property 
and casualty lines. MPCI premiums are generally not received from the farmer 
until the covered crops have been harvested, and when received, are remitted 
monthly by the Company in full to the FCIC.  In the crop hail business, 
premiums are generally not received until after the harvest, while losses and 
other expenses are paid throughout the year.

OPERATING ACTIVITIES

    Cash used by operating activities was $330,000 in the nine months ended 
September 30, 1996 and $9.9 million in the nine months ended September 30, 
1995. The primary use of cash by operating activities resulted from an 
increase in MPCI and crop hail premiums serviced by the Company which 
premiums have not yet been collected from policyholders. The primary reason 
for cash used from operating activities in the nine months ended September 
30, 1995 was a result of the extension by the FCIC of reporting deadlines for 
the 1995 crop year (which delayed the Company's receipt of a portion of the 
expense reimbursement payable to the Company on MPCI premiums.) There were no 
such delays for the 1996 crop year.

INVESTING ACTIVITIES

    Cash provided by investing activities was $15.5 million in the nine 
months ended September 30, 1996 and $17.1 million in the nine months ended 
September 30, 1995.  The primary source of cash provided by investing 
activities was the receipt of a substantial portion of the deferred MPCI 
premiums which were financed by the Company in the fourth quarter.

    The remaining investing activities of the Company have been primarily the 
acquisitions of certain agency operations, purchases and sales of investment 
securities, and the purchase of property and equipment needed as a result of 
the growth of the Company.

FINANCING ACTIVITIES

    Cash used by financing activities was $18.0 million in the nine months
ended September 30, 1996 and $9.3 million in the nine months ended September 30,
1995.  The primary uses of cash were to repay borrowings of $24.7 and $13.1
million under its lines of credit in the nine months ended September 30, 1996
and 1995, respectively.  The primary source of cash in the nine months ended
September 30, 1996 was the issuance of $10.0 million of redeemable preferred
stock to Fireman's Fund, the proceeds of which were used to pay down short 
term borrowings.

CAPITAL RESOURCES  

    The Company had two secured revolving line of credit agreements in the 
amount of $35 and $15 million which matured on October 15, 1996. The $35 
million facility has been extended through November 25, 1996. The $15 million 
facility was available solely to pay crop hail losses with respect to 
policies issued, serviced or managed by or through the company or its 
subsidiaries.  No amounts were drawn on this line during 1996 and the Company 
does not anticipate needing to renew this line in 1997. The $7.6 million 
outstanding under the $35 million facility at September 30,1996 was repaid 
during October. Since then, the Company has not borrowed any additional 
amounts under the line of credit.
                                      17

<PAGE>

                      CROP GROWERS CORPORATION AND SUBSIDIARIES
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS (CONTINUED)

    Historically, the Company had utilized the line of credit during the 
fourth quarter to finance premiums due to the FCIC which have not yet been 
paid to the Company by the policyholder. Under an SRA, the FCIC charges 
interest at a rate of 1.25% per month on overdue premiums and the insurance 
company, which is responsible for payment of the policyholder's premiums to 
the FCIC, passes such interest cost on to the policyholder. The Company has 
agreed with its contracting insurance companies to assume the responsibility 
for such payments to the FCIC and, therefore, receives interest payments made 
by policyholders on deferred premiums. The Company and Fireman's Fund are 
currently negotiating an agreement whereby Fireman's Fund would finance the 
premiums and the Company would receive a service fee as its compensation for 
administering the ultimate collection of premium payments by policy holders. 
The Company has and is also discussing financing these premiums using a line of
credit.

    The FCIC provides an expense reimbursement advance to the Company once 
the premium due from a policyholder has been calculated and accepted by the 
FCIC which is in advance of when the premium is paid.  The Company also uses 
the line of credit to finance the working capital needs prior to receiving 
this advance from the FCIC.  The Company generally utilizes the line of 
credit for this purposes from April through September.  The Company has and 
is currently in the process of negotiating with lenders to secure additional 
working capital financing.  If the Company were unable to secure a credit 
facility, it would be required to seek additional sources of financing for 
its working capital needs.  Such sources could include, among other things, 
dividends from its insurance subsidiaries, issuance of debt or equity 
securities, or the sale of assets.

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<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

     See Note 4 (Legal Matters) of the Company's Quarterly Report on Form 
10-Q for the quarter ended September 30, 1996 and the Company's Current 
Report on Form 8-K dated June 10, 1996. See also Part I, Item 3 and Part II, 
Item 8, Note 16 (Legal Matters), of the Company's Annual Report on Form 10-K 
for the year ended December 31, 1995, as amended.

ITEM 2.  CHANGES IN SECURITIES.

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

ITEM 5.  OTHER INFORMATION.

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)         Exhibits

         10.1.     Separation Agreement dated September 23, 1996 between John
                   Hemmingson and the Company

         10.2.     Right of First Offer and First Refusal Agreement dated 
                   September 23, 1996 between Fireman's Fund Insurance Company,
                   John Hemmingson, and the Company

         10.3.     Separation Agreement dated September 23, 1996 between Gary 
                   Black and the Company

         10.4.     Right of First Offer and First Refusal Agreement dated 
                   September 23, 1996 between Fireman's Fund Insurance Company,
                   Gary Black, and the Company

         10.5.     Coehlo Associates Amended Promissory Note dated May 31, 1996

         (b)         Reports on Form 8-K

                   None

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<PAGE>

                                  SIGNATURE

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 thereunto duly authorized.


                                            CROP GROWERS CORPORATION



November 14, 1996                           ________________________
                                            David E. Hill
                                            Chief Financial Officer


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