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                        CAPITOL TRANSAMERICA CORPORATION
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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               [Capitol Transamerica Corporation logo]

FOR IMMEDIATE RELEASE                                   Contact:  George A. Fait
                                                                  (608) 231-4456

                   CAPITOL TRANSAMERICA CORPORATION ANNOUNCES
                       WISCONSIN COMMISSIONER OF INSURANCE
                             APPROVAL OF ACQUISITION

         Madison, Wisconsin, December 14, 2001 - Capitol Transamerica
Corporation (Nasdaq: CATA) today announced that the Wisconsin Commissioner of
Insurance has approved the acquisition of Capitol Transamerica by Alleghany
Corporation (NYSE: Y), as contemplated by a merger agreement between the
parties. Completion of the merger remains subject to approval by holders of
two-thirds of Capitol Transamerica's outstanding shares of common stock and
satisfaction of other closing conditions. Capitol Transamerica has sent proxy
materials to its shareholders relating to the special meeting of its
shareholders to vote on the proposed transaction. The special meeting will take
place on January 3, 2002.

         As announced on July 20, 2001, under the terms of the merger agreement,
Alleghany Corporation will acquire Capitol Transamerica at a price of $16.50 in
cash per share of Capitol Transamerica common stock. The parties expect that the
closing will occur as soon as practicable after receiving the required
shareholder approval, after which Capitol Transamerica will be a wholly-owned
subsidiary of Alleghany Corporation.

         This press release contains forward-looking statements with respect to
the expected time of the closing of the transaction. The timing of the closing
could be significantly different, depending on the timing of satisfaction of the
remaining conditions to closing, among other factors. Although forward-looking
statements help to provide complete information about future prospects, readers
should keep in mind that forward-looking statements are much less reliable than
historical information.