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FOR IMMEDIATE RELEASE	Contact:	Paul Breitnauer
	Phone:	608-232-0402

CAPITOL TRANSAMERICA CORPORATION REPORTS
INCREASES IN QUARTERLY PREMIUMS AND EARNINGS

      Madison, Wisconsin, October 25, 2000 - With a continuing trend of strong revenue growth, Capitol Transamerica Corporation (NASDAQ: CATA) reported a 20.2% written premium increase from $20.8 million to $25.0 million for the three months ended September 30, 2000 over the 1999 period. Substantial premium growth occurred in all lines with the property-casualty business segment increasing slightly more than fidelity-surety.

      Net income for the third quarter of 2000 was $3.3 million or $0.30 per share (diluted unless otherwise noted) vs. $3.1 million or $0.28 per share for the same period in 1999. Net operating earnings (excluding after-tax realized investment gains) for the quarter were $1.2 million or $0.11 per share vs. $1.5 million or $0.13 per share last year.

      Year-to-date gross written premiums for the nine months ended September 30 were $76.8 million, a 17.3 % increase over the $65.5 million level for the first nine months of 1999. The nine-month written premium volume represents an all-time high for the Company. Year-to-date net income, including $4.7 million of after tax realized investment gains, was $12.4 million, or $1.11 per share. This compares to earnings of $14.4 million, or $1.27 per share, including $5.1 million of after tax realized investment gains, for 1999.

      Higher than expected claims activity for Contract Bond Surety business resulted in a combined ratio of 93.5% through nine months of 2000 compared to a 90.8% ratio for the same time period in 1999. The Company's combined ratio continues to compare very favorably to the industry-wide average, which was 108.3% through June 30, 2000.

      Total assets increased 7.8% since year-end 1999 from $257.6 million to $277.1 million. Unearned premiums increased $6.9 million over the same span, which should result in a benefit to bottom line earnings in future periods.

      With total shareholders' equity of $143.8 million at September 30, 2000, book value per share calculated on shares outstanding increased 10.1% to $13.01 from the December 31, 1999 book value of $11.82, based on $133.2 million in equity at that time. The Company continued its regular dividend payment of $0.07 per share during the third quarter.

      Commenting on the results, Chairman George A. Fait stated that "We are pleased with the Company's premium growth of more than 17% thus far in 2000. Additionally, we feel that this top line growth can be maintained as pricing levels in general continue to firm up and our property-casualty rate increases take effect. Some unexpected loss activity, along with general overhead costs, have increased our combined ratio over last year. Management therefore continues to concentrate on underwriting results to bring loss levels more in line with historical experience and expects the future increase in earned premiums to compensate for the expense factors. Along with the increased book value, the premium growth and our focus on minimizing claims experience bodes well for our shareholders and the Company's future."

      Capitol Transamerica Corporation is an insurance holding company operating nationally and writing specialty lines of commercial property and casualty policies as well as fidelity and surety coverages through its subsidiary companies Capitol Indemnity Corporation and Capitol Specialty Insurance Corporation. A third subsidiary, Capitol Facilities Corporation, is a non-insurance entity available for other business opportunities. The Capitol Transamerica Group operates in 37 states and is rated A+ (Superior) by A.M. Best Company, Inc., an independent organization that analyzes the insurance industry. The Company's website is http://www.captrans.com. With 11.2 million shares outstanding, Capitol Transamerica's common stock is traded on the NASDAQ Stock Exchange under the symbol CATA.

      SAFE HARBOR STATEMENT - Some of the statements in this news release, as well as statements by the company in periodic press releases and oral statements made by the company's officials to analysts and shareholders in the course of presentations about the company, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, estimates subject to change in circumstances, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

      Financial Highlights Follow

CAPITOL TRANSAMERICA CORPORATION SELECTED FINANCIAL DATA CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share)
			Nine months ended September 30,				Three months ended September 30,
			2000		1999		2000			1999
REVENUES
	Gross premiums written		$	76,777	$	65,474	$	25,019		$	20,815
	Net premiums written		$	71,335	$	61,433	$	23,439		$	19,415
	Net premiums earned		$	64,833	$	62,486	$	22,752		$	20,969
EXPENSES
	Claims and claim expenses			37,740		33,160		15,694			13,371
	Other underwriting expenses			23,959		23,232		8,227			8,090
		Total Losses and Expenses Incurred		61,699		56,392		23,921			21,461
	Underwriting income (loss)			3,134		6,094		(1,169	)		(492	)
	Investment income			6,800		6,739		2,297			2,300
	Realized investment gains			7,275		7,796		3,296			2,536
	Other income			253		181		96			52
		Income Before Income Tax		17,462		20,810		4,520			4,396
	Income tax expense			5,066		6,445		1,197			1,289
		NET INCOME	$	12,396	$	14,365	$	3,323		$	3,107
EARNINGS PER SHARE- BASIC			$	1.11	$	1.28	$	0.30		$	0.28
EARNINGS PER SHARE- DILUTED			$	1.11	$	1.27	$	0.30		$	0.28

COMPARATIVE FINANCIAL HIGHLIGHTS - Nine Months Ended September 30, (in thousands, except per share)
		2000		1999		1998		1997			1996
PER SHARE INFORMATION:
	Book value per share	$	13.01	$	12.02	$	11.65	$	12.11		$	9.62
	Income per share- diluted		1.11		1.27		1.18		0.59			1.06
COMPANY STATISTICS:
	Gross premiums written	$	76,777	$	65,474	$	68,228	$	75,017		$	67,444
	Underwriting income (loss)		3,134		6,094		4,118		(1,508	)		8,214
	Net investment income		6,800		6,739		6,892		6,241			5,261
	Realized investment gains		7,275		7,796		7,569		4,030			2,590
	Other income		253		181		76		21			82
	Consolidated gross income		17,462		20,810		18,655		8,784			16,147
	Consolidated net income		12,396		14,365		13,300		6,661			11,741
	Consolidated net operating earnings		7,667		9,298		8,380		4,042			10,058
	Cash and invested assets		224,919		221,534		221,856		226,816			171,111
	Total assets		277,138		264,026		265,271		274,423			207,856
	Shareholders' investment		143,819		135,388		130,692		135,250			106,575
	Dividends paid		2,339		2,375		2,372		3,487			2,979
INSURANCE OPERATING RATIOS, STATUTORY BASIS:
	Loss and loss adjustment expenses		58.4%		53.3%		59.4%		68.2%			51.5%
	Underwriting expenses		35.1%		37.5%		34.4%		33.0%			31.8%
	Combined ratios		93.5%		90.8%		93.8%		101.2%			83.3%

CAPITOL TRANSAMERICA CORPORATION SELECTED FINANCIAL DATA BALANCE SHEETS (in thousands, except per share)
				September 30, 2000			December 31, 1999			September 30, 1999
ASSETS
	Investments:
		Available-for-sale investments, at fair value
			U.S. Government bonds (cost $35, $39 and $41, respectively)	$	37		$	42		$	43
			State and municipal bonds (cost $79,613, $78,856 and $77,683, respectively)		83,464			82,075			81,875
			Corporate bonds (cost $1,102, $1,124 and $876, respectively)		1,075			1,094			849
			Common stock (cost $123,862, $125,914 and $124,591, respectively)		119,542			116,657			119,874
			Preferred stock (cost $6,009, $5,726 and $5,976, respectively)		5,247			5,695			6,154
		Investment real estate			10,944			10,540			10,327
		Short-term investments			3,140			1,982			1,554
			Total Investments		223,449			218,085			220,676
		Cash		$	1,470		$	1,081		$	858
		Receivables			33,233			22,371			25,146
		Other assets			18,986			16,086			17,346
	TOTAL ASSETS			$	277,138		$	257,623		$	264,026
LIABILITIES
		Reserves for losses and loss adjustment expenses		$	76,793		$	77,256		$	77,617
		Unearned premiums			46,349			39,454			40,913
		Other liabilities			10,177			7,686			10,108
	TOTAL LIABILITIES			$	133,319		$	124,396		$	128,638
SHAREHOLDERS' EQUITY
		Common stock, $1.00 par value, authorized 15,000 shares, issued 11,558, 11,539 and 11,536 shares, respectively		$	11,558		$	11,539		$	11,536
		Paid-in surplus			22,728			22,595			22,571
		Accumulated other comprehensive loss, net of deferred tax benefit of ($440), ($2,134) and ($130), respectively			(816	)		(3,962	)		(241	)
		Retained earnings			113,635			103,577			102,018
		Less treasury stock, 506, 271 and 268 shares, respectively, at cost			(3,286	)		(522	)		(496	)
	TOTAL SHAREHOLDERS' EQUITY			$	143,819		$	133,227		$	135,388
	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			$	277,138		$	257,623		$	264,026
SHAREHOLDERS' EQUITY PER SHARE				$	13.01		$	11.82		$	12.02
SHARES OUTSTANDING					11,052			11,268			11,268

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