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

                    CAPITOL TRANSAMERICA CORPORATION REPORTS
                    ----------------------------------------
                              FIRST QUARTER RESULTS
                              ---------------------

     MADISON, WISCONSIN, MAY 9, 2001 - Capitol Transamerica Corporation (NASDAQ:
CATA)  reported  a  first  quarter  written  premium  increase of 18.0% on $27.6
million of gross premiums written in 2001 compared to $23.4 million for the same
three  months  of  2000  continuing  the  positive  trend from last year.  First
quarter  net  investment income increased 8.6% from $2.3 million in 2000 to $2.5
million  this  year.

     Net  income,  reported on a diluted share basis for the quarter ended March
31,  2001,  was  $1.9 million, or $0.17 per share, versus $5.7 million, or $0.50
per  share,  the  prior year.  Excluding after-tax realized investment losses of
$1.2  million,  net  operating  income  for  first quarter 2001 was $3.1 million
compared  to  $5.0 million in net operating income (excluding nearly $700,000 in
after-tax  realized  gains)  for  the  same  period  in  2000.

The  Company's  first quarter 2001 combined ratio improved to 90.5% and resulted
in  underwriting  income  of  $1.7  million  for  the  three month period.  This
compares  to  a  combined  ratio of 100.5% and an underwriting loss for calendar
year  2000.  The  Company's  ratio continues to compare favorably to the overall
industry  average  combined  loss  and expense ratio of 110.4% for calendar year
2000.

     These  results  were  impacted by a number of factors.  The contract surety
loss  experience  continued  to develop adversely during the first quarter.  The
Company  absorbed  realized  losses  of $2.0 million pursuant to Accounting FASB
Statement  No.  115  for  other than temporary market value declines for certain
securities  held  in  the  portfolio.  The  recent  downturn of the stock market
contributed  to a drop in first quarter net comprehensive income, which includes
after-tax unrealized investment results, to $372,000 or $0.03 per share compared
to  net  comprehensive  income  of $5.8 million or $0.52 per share for the first
quarter  of  2000.

     Since  December  31, 2000, total assets remained at the same $283.0 million
level while shareholders' equity decreased slightly to $144.5 million, resulting
in  book  value  per share of $13.20.  The number of shares outstanding was 10.9
million  as  of March 31, 2001.  The Company increased its dividend payment from
$0.07  per share in previous quarters to $0.08 per share in the first quarter of
2001.


<PAGE>
     Company  Chairman  George  A.  Fait stated that "We continue to be somewhat
disappointed  in  the  overall  underwriting results primarily caused by ongoing
contract bond losses in the fidelity and surety line.  Despite these higher than
expected  loss  levels,  we  were  pleased to return to an operating profit this
quarter due to concentrated claims management efforts as well as premium growth.
Most  of  our  recent  premium  growth  has  been  in  the  more  profitable
property/casualty  and  non-contract  bond areas, which should benefit us in the
long  run.  Management  will  also  continue  to  strongly  focus  on  positive
underwriting  results in the future in order to return to loss ratio levels more
reflective  of  our  corporate  history."

     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.
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
                        (IN THOUSANDS, EXCEPT PER SHARE)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                     Three months ended March 31,
                                     ----------------------------
                                           2001     2000
                                         --------  -------
<S>                                      <C>       <C>
REVENUES
  Gross premiums written                 $27,573   $23,365
                                         ========  =======
  Net premiums written                   $24,390   $21,948
                                         ========  =======

  Net premiums earned                    $22,843   $20,667
                                         --------  -------

EXPENSES
  Claims and claim expenses               12,256     7,839
  Other underwriting expenses              8,892     7,930
                                         --------  -------

     Total losses and expenses incurred   21,148    15,769
                                         --------  -------

  Underwriting income                      1,695     4,898

  Investment income                        2,454     2,259
  Realized investment (losses) gains      (1,823)    1,046
  Other income                               126        71
                                         --------  -------

     Income before income tax              2,452     8,274

  Income tax expense                         552     2,593
                                         --------  -------

NET INCOME                               $ 1,900   $ 5,681
                                         ========  =======

EARNINGS PER SHARE - BASIC               $  0.17   $  0.50
                                         ========  =======

EARNINGS PER SHARE - DILUTED             $  0.17   $  0.50
                                         ========  =======
</TABLE>

<TABLE>
<CAPTION>
                   COMPARATIVE FINANCIAL HIGHLIGHTS - THREE MONTHS ENDED MARCH 31,

                                                 2001       2000       1999       1998       1997
                                               ---------  ---------  ---------  ---------  ---------
<S>                                            <C>        <C>        <C>        <C>        <C>
PER SHARE INFORMATION:
  Book value per share                         $  13.20   $  12.26   $  12.23   $  13.13   $  10.28
  Earnings per share - diluted                     0.17       0.50       0.39       0.31       0.18
COMPANY STATISTICS:
  Gross premiums written                       $ 27,573   $ 23,365   $ 19,336   $ 21,675   $ 20,287
  Net investment income                           2,454      2,259      2,145      2,296      2,147
  Realized investment (losses) gains             (1,823)     1,046      2,354        897        346
  Income before income tax                        2,452      8,274      6,539      4,680      2,474
  Net income                                      1,900      5,681      4,525      3,461      2,040
  Net operating earnings                          3,085      5,001      2,995      2,878      1,816
  Comprehensive income (loss)                       372      5,835     (3,258)     8,453       (418)
  Cash and invested assets                      235,803    223,096    232,712    254,056    189,338
  Total assets                                  283,031    264,572    273,929    293,890    226,628
  Shareholders' investment                      144,510    137,442    137,311    147,105    114,669
  Dividends paid                                    906        793        792        790      1,911
INSURANCE OPERATING RATIOS, STATUTORY BASIS:
  Loss and loss adjustment expenses                53.8%      38.1%      57.2%      59.0%      61.4%
  Underwriting expenses                            36.7%      37.3%      39.4%      34.6%      36.7%
                                               ---------  ---------  ---------  ---------  ---------
  Combined ratios                                  90.5%      75.4%      96.6%      93.6%      98.1%
                                               =========  =========  =========  =========  =========
</TABLE>


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

                                                 BALANCE SHEETS
                                        (IN THOUSANDS, EXCEPT PER SHARE)


                                                                             March 31,    March 31,
                                                                               2001         2000
                                                                            -----------  -----------
<S>                                                                         <C>          <C>
ASSETS
  Investments
     Available-for-sale investments, at fair value
        U.S. Government bonds (cost $33 and $38, respectively)              $       35   $       40
        State and municipal bonds (cost $91,871 and $78,144, respectively)      98,441       81,759
        Corporate bonds (cost $1,098 and $1,122, respectively)                   1,073        1,092
        Common stock (cost $124,493 and $128,276, respectively)                116,341      119,476
        Preferred stock (cost $5,844 and $5,441, respectively)                   5,524        4,795
     Investment real estate                                                     11,238       10,670
     Short-term investments                                                      1,464        3,928
                                                                            -----------  -----------
       Total Investments                                                       234,116      221,760

  Cash                                                                           1,687        1,336
  Receivables                                                                   28,465       24,270
  Other assets                                                                  18,763       17,206
                                                                            -----------  -----------

   TOTAL ASSETS                                                             $  283,031   $  264,572
                                                                            ===========  ===========

LIABILITIES
  Reserves for losses and loss adjustment expenses                          $   74,065   $   75,746
  Unearned premiums                                                             47,321       40,803
  Other liabilities                                                             17,135       10,581
                                                                            -----------  -----------

   TOTAL LIABILITIES                                                        $  138,521   $  127,130
                                                                            -----------  -----------

SHAREHOLDERS' EQUITY
  Common stock, $1.00 par value, authorized 15,000
     shares,  issued 11,561 and 11,558 shares, respectively                 $   11,561   $   11,558
  Paid-in surplus                                                               22,743       22,728
  Accumulated other comprehensive (loss) income, net of
     deferred taxes of ($673) and ($2,050), respectively                        (1,251)      (3,808)
  Retained earnings                                                            116,029      108,469
  Less treasury stock, 611 and 352 shares,
     respectively, at cost                                                      (4,572)      (1,505)
                                                                            -----------  -----------

   TOTAL SHAREHOLDERS' EQUITY                                                  144,510      137,442
                                                                            -----------  -----------

   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                               $  283,031   $  264,572
                                                                            ===========  ===========

BOOK VALUE PER SHARE                                                        $    13.20   $    12.26
                                                                            ===========  ===========

SHARES OUTSTANDING                                                              10,949       11,206
                                                                            ===========  ===========
</TABLE>


<PAGE>