|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 endedSeptember 30,

Three months endedSeptember 30,2000

1999

2000

1999REVENUESGross premiums written

$
76,777

$
65,474

$
25,019

$
20,815Net premiums written

$
71,335

$
61,433

$
23,439

$
19,415Net premiums earned

$
64,833

$
62,486

$
22,752

$
20,969EXPENSESClaims and claim expenses


37,740


33,160


15,694


13,371Other underwriting expenses


23,959


23,232


8,227


8,090Total Losses and Expenses Incurred


61,699


56,392


23,921


21,461Underwriting income (loss)


3,134


6,094


(1,169
)

(492
)Investment income


6,800


6,739


2,297


2,300Realized investment gains


7,275


7,796


3,296


2,536Other income


253


181


96


52Income Before Income Tax


17,462


20,810


4,520


4,396Income tax expense


5,066


6,445


1,197


1,289NET INCOME

$
12,396

$
14,365

$
3,323

$
3,107EARNINGS PER SHARE- BASIC

$
1.11

$
1.28

$
0.30

$
0.28EARNINGS 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

1996PER SHARE INFORMATION:Book value per share

$
13.01

$
12.02

$
11.65

$
12.11

$
9.62Income per share- diluted


1.11


1.27


1.18


0.59


1.06COMPANY STATISTICS:Gross premiums written

$
76,777

$
65,474

$
68,228

$
75,017

$
67,444Underwriting income (loss)


3,134


6,094


4,118


(1,508
)

8,214Net investment income


6,800


6,739


6,892


6,241


5,261Realized investment gains


7,275


7,796


7,569


4,030


2,590Other income


253


181


76


21


82Consolidated gross income


17,462


20,810


18,655


8,784


16,147Consolidated net income


12,396


14,365


13,300


6,661


11,741Consolidated net operating earnings


7,667


9,298


8,380


4,042


10,058Cash and invested assets


224,919


221,534


221,856


226,816


171,111Total assets


277,138


264,026


265,271


274,423


207,856Shareholders' investment


143,819


135,388


130,692


135,250


106,575Dividends paid


2,339


2,375


2,372


3,487


2,979INSURANCE 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 30,1999ASSETSInvestments:Available-for-sale investments, at fair valueU.S. Government bonds (cost $35, $39 and $41, respectively)

$
37

$
42

$
43State and municipal bonds (cost $79,613, $78,856 and $77,683, respectively)


83,464


82,075


81,875Corporate bonds (cost $1,102, $1,124 and $876, respectively)


1,075


1,094


849Common stock (cost $123,862, $125,914 and $124,591, respectively)


119,542


116,657


119,874Preferred stock (cost $6,009, $5,726 and $5,976, respectively)


5,247


5,695


6,154Investment real estate


10,944


10,540


10,327Short-term investments


3,140


1,982


1,554Total Investments


223,449


218,085


220,676Cash

$
1,470

$
1,081

$
858Receivables


33,233


22,371


25,146Other assets


18,986


16,086


17,346TOTAL ASSETS

$
277,138

$
257,623

$
264,026LIABILITIESReserves for losses and loss adjustment expenses

$
76,793

$
77,256

$
77,617Unearned premiums


46,349


39,454


40,913Other liabilities


10,177


7,686


10,108TOTAL LIABILITIES

$
133,319

$
124,396

$
128,638SHAREHOLDERS' EQUITYCommon stock, $1.00 par value, authorized 15,000 shares,  issued 11,558, 11,539 and 11,536 shares, respectively

$
11,558

$
11,539

$
11,536Paid-in surplus


22,728


22,595


22,571Accumulated 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


102,018Less treasury stock, 506, 271 and 268 shares, respectively, at cost


(3,286
)

(522
)

(496
)TOTAL SHAREHOLDERS' EQUITY

$
143,819

$
133,227

$
135,388TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$
277,138

$
257,623

$
264,026SHAREHOLDERS' EQUITY PER SHARE

$
13.01

$
11.82

$
12.02SHARES OUTSTANDING


11,052


11,268


11,268