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

                    CAPITOL TRANSAMERICA CORPORATION REPORTS
                    ----------------------------------------
                             SECOND QUARTER RESULTS
                             ----------------------

     MADISON,  WISCONSIN,  AUGUST  8,  2001  -  Capitol Transamerica Corporation
(NASDAQ:  CATA)  reported a second quarter written premium increase of 20.8 % on
$34.3  million  of  gross premiums written in 2001 compared to $28.4 million for
the  same three months of 2000, the sixth consecutive double digit quarterly top
line  growth increase.  For the six months ended June 30, gross written premiums
were  $61.9 million, 19.6 % higher than the $51.8 million for the same period in
2000.  While  a  portion of the growth is attributable to premium rate increases
on  retained  renewals,  significant  new  business  growth  also  occurred,
particularly  in  the  property  and  casualty  lines.

     For  the  quarter  ended  June 30, 2001, the Company had a net loss of $2.2
million,  or  $0.20 per share (reported on a diluted share basis), versus a $3.4
million in income, or $0.31 per share, the prior year.  On a year-to-date basis,
the  net  loss  for  2001  was $0.3 million, or $0.03 per share compared to $9.1
million  in  income  or  $0.81  per share in 2000.  Excluding after-tax realized
investment losses of $1.1 million, net operating income for the first six months
of  2001  was  $0.8  million  compared  to  $6.5 million in net operating income
(excluding  $2.6  million  in  after-tax  realized gains) for the same period in
2000.

     Pre-tax  realized investment losses for the second quarter of 2001 included
$6.2  million  of  other-than-temporary  market  value  declines  for  certain
securities  held  in the Company's portfolio. Year to date, other-than-temporary
market  value  losses  recognized  pursuant to Accounting FASB Statement No. 115
equaled  $8.2 million on a pre-tax basis. No such write-downs were recognized in
2000.

     Net  comprehensive  income,  which includes after-tax unrealized investment
results, was $5.2 million, or $0.47 per share, for the six months ended June 30,
2001.  For  the same period last year, comprehensive income was $7.4 million, or
$0.66  per  share. Net investment income for the six month period increased 7.6%
from  $4.5  million  in  2000  to  $4.8  million  this  year.

     The  Company's  combined  ratio for the first six months of 2001 was 105.7%
versus  87.6%  for  the first half of 2000. For comparison purposes, the overall
industry  average  combined  ratio  was  106.2%  for  the first quarter of 2001.

     There  were  several  causes for the weaker underwriting results during the
quarter.  Similar  to  prior  periods,  the  contract  surety  loss  experience
continued to develop adversely though signs of stabilization occurred during the
second  quarter.  In  addition,  unusually  high  losses  in  the property lines
occurred  in  the  past  three  months due to an unexpected high level of claims
related  to  storm  damage in the Midwest.  Another factor is that the Company's
written premium growth has not yet been fully experienced as earnings given that
the  earned  premium  increase  year  to  date  is 12.4 % compared to the 19.6 %
written  premium  growth.


<PAGE>
     Book  value  per share increased to $13.57 as of June 30, 2001, from $13.23
and $12.34 at December 31, 2000, and June 30, 2000, respectively.  Shareholders'
equity  rose  2.0% from $145.7 million at December 31, 2000 to $148.6 million at
June  30,  2001.  Total  assets  increased  4.5%  to  $296.1 million from $283.3
million  during  the  same  six-month  period.  The Company distributed an $0.08
dividend per share during the second quarter compared to $0.07 per share for the
same  quarter  in  2001.

     Company  Chairman  George A. Fait stated that "We continue to be pleased at
our  top  line growth as well as our increased book value per share figure as of
June  30.  On the down side, we have written down several of our equity holdings
due  to  stock  market  declines in the past year.  Though already fully written
down  under  generally  accepted  accounting  principles  on  our balance sheet,
recognizing  these  declines as other-than-temporary has negatively impacted our
bottom  line  profitability  thus  far  in  2001."

     "Additionally,  persistent loss development in the contract bond portion of
our  fidelity  and  surety  line in addition to early summer storm damage losses
resulted  in  disappointing underwriting results thus far in 2001. To attain our
corporate  goals, management continues to focus on growth in the more profitable
lines  as  well  as  forcefully  managing  claims  activity  where  needed."

     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  recently  announced  the signing of a merger agreement under which
Alleghany  Corporation  (NYSE:  Y) will acquire Capitol Transamerica at a $16.50
per  share cash price, subject to shareholder and regulatory approvals.  Details
of  this press release, additional financial information, and recent filings can
be  found  at  the  Company's website http://www.captrans.com through the NASDAQ
                                      -----------------------
Easy Links  page.

     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


<PAGE>
<TABLE>
<CAPTION>
                        CAPITOL TRANSAMERICA CORPORATION
                            SELECTED FINANCIAL DATA

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        (IN THOUSANDS, EXCEPT PER SHARE)

                                          Six months ended  Three months ended
                                             June 30,            June 30,
                                         -----------------  ------------------
                                           2001     2000      2001      2000
                                         --------  -------  --------  --------
<S>                                      <C>       <C>      <C>       <C>
REVENUES
  Gross premiums written                 $61,884   $51,758  $34,311   $28,393
  Net premiums written                    54,732    47,896   30,342    25,948
                                         ========  =======  ========  ========

  Net premiums earned                    $47,320   $42,081  $24,477   $21,414

EXPENSES
  Claims and claim expenses               33,590    22,046   21,334    14,207
  Other underwriting expenses             18,217    15,732    9,325     7,802
                                         --------  -------  --------  --------

     Total Losses and Expenses Incurred   51,807    37,778   30,659    22,009
                                         --------  -------  --------  --------

  Underwriting (loss) income              (4,487)    4,303   (6,182)     (595)

  Investment income                        4,843     4,503    2,389     2,244
  Realized investment (losses) gains      (1,748)    3,979       75     2,933
  Other income                               268       157      142        86
                                         --------  -------  --------  --------

     (Loss) Income Before Income Tax      (1,124)   12,942   (3,576)    4,668

  Income tax (benefit) expense              (811)    3,869   (1,363)    1,276
                                         --------  -------  --------  --------

       NET (LOSS) INCOME                 $  (313)  $ 9,073  $(2,213)  $ 3,392
                                         ========  =======  ========  ========

(LOSS) EARNINGS PER SHARE- BASIC         $ (0.03)  $  0.81  $ (0.20)  $  0.31
                                         ========  =======  ========  ========

(LOSS) EARNINGS PER SHARE- DILUTED       $ (0.03)  $  0.81  $ (0.20)  $  0.31
                                         ========  =======  ========  ========
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                COMPARATIVE FINANCIAL HIGHLIGHTS - SIX MONTHS ENDED JUNE 30,

                                                2001       2000       1999       1998       1997
                                              ---------  ---------  ---------  ---------  ---------
<S>                                           <C>        <C>        <C>        <C>        <C>
PER SHARE INFORMATION:
  Book value per share                        $  13.57   $  12.34   $  13.10   $  12.95   $  11.18
  (Loss) earnings per share - diluted            (0.03)      0.81       1.00       0.93       0.24
COMPANY STATISTICS:
  Gross premiums written                      $ 61,884   $ 51,758   $ 44,659   $ 46,464   $ 47,449
  Net investment income                          4,843      4,503      4,439      4,583      4,120
  Realized investment (losses) gains            (1,748)     3,979      5,260      7,538        379
  (Loss) income before income tax               (1,124)    12,942     16,413     14,692      3,069
  Net (loss) income                               (313)     9,073     11,257     10,493      2,664
  Net operating earnings                           823      6,487      7,838      5,593      2,418
  Comprehensive income                           5,177      7,406      7,533      7,213     10,360
  Cash and invested assets                     245,144    215,826    239,510    243,858    208,948
  Total assets                                 296,123    270,022    284,729    288,942    252,218
  Shareholders' investment                     148,595    136,800    147,627    145,307    124,692
  Dividends paid                                 1,754      1,565      1,574      1,569      2,676
INSURANCE OPERATING RATIOS, STATUTORY BASIS:
  Loss and loss adjustment expenses               71.1%      52.6%      47.9%      60.4%      61.9%
  Underwriting expenses                           34.6%      35.0%      36.7%      33.7%      34.8%
                                              ---------  ---------  ---------  ---------  ---------
  Combined ratios                                105.7%      87.6%      84.6%      94.1%      96.7%
                                              =========  =========  =========  =========  =========
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                CAPITOL TRANSAMERICA CORPORATION
                                     SELECTED FINANCIAL DATA

                                         BALANCE SHEETS
                                (IN THOUSANDS, EXCEPT PER SHARE)

                                                                        June 30,  December 31, June 30,
                                                                          2001       2000       2000
                                                                        ---------  ---------  ---------
<S>                                                                     <C>        <C>        <C>
ASSETS
Investments
     Available-for-sale  investments,  at  fair  value
        U.S. Government bonds (cost $28, $34 and $37, respectively)     $     30   $     36   $     38
        State and municipal bonds (cost $94,846, $84,236 and
                  $77,473, respectively)                                  99,652     89,732     80,913
        Corporate bonds (cost $1,095, $1,100 and $1,119, respectively)     1,072      1,074      1,091
        Common stock (cost $112,753, $123,504 and
                  $125,727, respectively)                                116,991    119,413    114,457
        Preferred stock (cost $5,344, $6,470 and $5,810, respectively)     5,195      5,516      5,007
     Investment real estate                                               11,385     11,009     10,800
     Short-term investments                                                6,249      5,587      2,398
                                                                        ---------  ---------  ---------
       Total Investments                                                 240,574    232,367    214,704

  Cash                                                                     4,570      3,642      1,122
  Receivables                                                             31,100     28,942     35,494
  Other assets                                                            19,879     18,307     18,702
                                                                        ---------  ---------  ---------

   TOTAL ASSETS                                                         $296,123   $283,258   $270,022
                                                                        =========  =========  =========

LIABILITIES
  Reserves for losses and loss adjustment expenses                      $ 77,401   $ 77,981   $ 77,858
  Unearned premiums                                                       53,590     45,588     45,540
  Other liabilities                                                       16,537     13,989      9,824
                                                                        ---------  ---------  ---------

   TOTAL LIABILITIES                                                    $147,528   $137,558   $133,222
                                                                        ---------  ---------  ---------

SHAREHOLDERS' EQUITY
  Common stock, $1.00 par value, authorized 15,000
     shares,  issued 11,561, 11,559 and 11,558 shares, respectively     $ 11,561   $ 11,559   $ 11,558
  Paid-in surplus                                                         22,745     22,733     22,728
  Accumulated other comprehensive income (loss), net of
     deferred taxes of $3,107, $149 and ($3,031), respectively             5,767        278     (5,629)
  Retained earnings                                                      113,084    114,944    111,085
  Less treasury stock, 611, 550 and 476 shares,
     respectively, at cost                                                (4,562)    (3,814)    (2,942)
                                                                        ---------  ---------  ---------

   TOTAL SHAREHOLDERS' EQUITY                                            148,595    145,700    136,800
                                                                        ---------  ---------  ---------

   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                           $296,123   $283,258   $270,022
                                                                        =========  =========  =========

BOOK VALUE PER SHARE                                                    $  13.57   $  13.23   $  12.34
                                                                        =========  =========  =========

SHARES OUTSTANDING                                                        10,950     11,009     11,082
                                                                        =========  =========  =========
</TABLE>


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