8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2007

Alleghany Corporation

(Exact name of registrant as specified in its charter)

Delaware	1-9371	51-0283071
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

7 Times Square Tower, 17th Floor, New York, New York	10036
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 752-1356

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

     On December 19, 2006, the Board of Directors of Alleghany Corporation (the “Company”) adopted the 2007 Long-Term Incentive Plan (the “2007 LTIP”), to be effective upon stockholder approval. At the Company’s 2007 Annual Meeting of Stockholders (the “2007 Annual Meeting”) held on April 27, 2007, Alleghany stockholders approved the adoption of the 2007 LTIP by an affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to vote at the 2007 Annual Meeting. A copy of the 2007 LTIP is filed herewith as Exhibit 10.1.

     The 2007 LTIP permits the Company to provide incentive compensation of the types commonly known as restricted stock, stock options, stock appreciation rights, performance shares, performance units and phantom stock, as well as other types of incentive compensation. The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) may select participants in the 2007 LTIP from among employees of the Company and its subsidiaries. The term “employee,” as used in the 2007 LTIP, means any person, including any officer, employed by the Company or a subsidiary on a salaried basis. The term “subsidiary,” as used in the 2007 LTIP, means any corporation, partnership or limited liability company, a majority of the total combined voting power of whose stock or other equity interest is beneficially owned, directly or indirectly, by the Company. The 2007 LTIP provides for a maximum of 300,000 shares of common stock to be paid to participants under the 2007 LTIP and/or purchased pursuant to stock options granted under the 2007 LTIP, subject to antidilution and other adjustments in certain events specified in the 2007 LTIP. The Compensation Committee administers the 2007 LTIP, and it has authority to determine, within the limits of the 2007 LTIP, the individuals to whom awards will be granted, and the type and size of such awards, including any objectives or conditions for earning payment pursuant to such awards. Awards under the 2007 LTIP may include, but need not be limited to: cash and/or shares of common stock, stock appreciation rights, options to purchase shares of common stock, including options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and options not intended so to qualify.

     The Compensation Committee may also make any other type of award deemed by it to be consistent with the purposes of the 2007 LTIP. The Compensation Committee may, but is not required to, grant an award to any participant that is intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, or a “Qualifying Award.” To be considered a Qualifying Award, awards, other than stock options or a stock appreciation rights granted at Fair Market Value (as defined below), must be granted conditional upon the attainment of specific amounts of, or increases in, performance goals enumerated in the 2007 LTIP and established by the Compensation Committee in writing at the time the award is granted. “Fair Market Value” is defined in the 2007 LTIP generally as (i) the closing sales prices of the common stock on the relevant date as reported on the stock exchange or market on which the common stock is primarily traded, or (ii) if no sale is made on such date, then fair market value is the closing sales prices of the common stock on the next preceding day and the next succeeding day on which such sales were made as reported on the stock exchange or market on which the common stock is primarily traded.

     The Board, without the consent of any participant, may amend or terminate the 2007 LTIP at any time, provided, however, that no such action shall adversely affect any rights or obligations with respect to any awards previously made under the 2007 LTIP, and provided further, that no such amendment, without approval of the holders of a majority of the shares of common stock voted thereon in person or by proxy, shall: increase the number of shares of common stock subject to the 2007 LTIP, extend the period during which awards may be granted, increase the maximum term for which stock options may be issued under the 2007 LTIP, decrease the minimum price at which stock options may be issued under the 2007 LTIP, or materially modify the requirements for eligibility to participate in the 2007 LTIP.

Item 2.02 Results of Operations and Financial Condition

     On April 26, 2007, the Company issued a press release on the subject of its 2007 first quarter consolidated earnings. A copy of such release is furnished herewith as Exhibit 99.1. The information hereunder shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

10.1	Alleghany Corporation 2007 Long-Term Incentive Plan
99.1	2007 First Quarter Earnings Release, dated April 26, 2007

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ALLEGHANY CORPORATION
Date: April 30, 2007	By:	/s/ Roger B. Gorham
		Name:	Roger B. Gorham
		Title:	Senior Vice President and chief financial officer

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Index to Exhibits

Exhibit Number	Exhibit Description
10.1	Alleghany Corporation 2007 Long-Term Incentive Plan
99.1	2007 First Quarter Earnings Release, dated April 26, 2007

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EX-10.1

EXHIBIT 10.1

ALLEGHANY CORPORATION

2007 LONG-TERM INCENTIVE PLAN

     1. PURPOSES OF THE PLAN. The purposes of the Alleghany Corporation 2007 Long-Term Incentive Plan (the “Plan”) are to further the long-term growth of Alleghany Corporation (the “Corporation”), to the benefit of its stockholders, by providing incentives to the officers and other employees of the Corporation and its subsidiaries who will be largely responsible for such growth, and to assist the Corporation in attracting and retaining executives of experience and ability on a basis competitive with industry practices. The Plan permits the Corporation to provide equity-based incentive compensation of the types commonly known as restricted stock, stock options, stock appreciation rights, performance shares, performance units and phantom stock, as well as other types of equity-based incentive compensation.

     2. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Compensation Committee of the Board of Directors of the Corporation (the “Committee”). No member of the Committee, during the one year period prior to such membership or during such membership, shall be granted or awarded equity securities pursuant to the Plan or any other plan of the Corporation or any of its affiliates, except as permitted by Rule 16b-3(c)(2)(i) promulgated under the Securities Exchange Act of 1934, as amended, as such Rule may be amended from time to time. Subject to the provisions of the Plan, the Committee shall have exclusive power to select the employees to participate in the Plan, to determine the type, size and terms of awards to be made to each participant selected, and to determine the time or times when awards will be granted or paid. The Committee’s interpretation of the Plan or of any awards granted thereunder shall be final and binding on all parties concerned, including the Corporation and any participant. The Committee shall have authority, subject to the provisions of the Plan, to establish, adopt and revise such rules, regulations, guidelines, forms of agreements and instruments relating to the Plan as it may deem necessary or advisable for the administration of the Plan.

     3. PARTICIPATION. Participants in the Plan shall be selected by the Committee from among the employees of the Corporation and its subsidiaries. The term “employee” shall mean any person (including any officer) employed by the Corporation or a subsidiary on a salaried basis. The term “subsidiary” shall mean any corporation, partnership or limited liability company, a majority of the total combined voting power of whose stock or other equity interests is beneficially owned, directly or indirectly, by the Corporation. Participants may receive multiple awards under the Plan.

     4. AWARDS.

     (a) Types. Awards under the Plan may include, but need not be limited to, cash and/or shares of the Corporation’s common stock, $1.00 par value (“Common Stock”), rights to receive cash and/or shares of Common Stock, stock appreciation rights, options (“Options”) to purchase shares of Common Stock, including options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Code”), and options not intended so to qualify. The Committee may also make any other type of award deemed by it to be consistent with the purposes of the Plan.

     (b) Certain Qualifying Awards. The Committee, in its sole discretion, may grant an award to any participant with the intent that such award qualifies as “performance-based compensation” under Section 162(m) of the Code (a “Qualifying Award”). The right to receive (or retain) any award granted as a Qualifying Award (other than an Option or a stock appreciation right granted at Fair Market Value) shall be conditional upon the achievement of performance goals established by the Committee in writing at the time such award is granted. Such performance goals, which may vary from participant to participant and award to award, shall be based upon the attainment of specific amounts of, or increases in, one or more of the following: revenues, operating income, cash flow, management of expenses, loss reserves and loss adjustment expense reserves, underwriting expenses, income before income taxes, net income, earnings per share, net worth, stockholders’ equity, return on equity or assets or total return to stockholders, whether applicable to the Corporation or any relevant subsidiary or business unit or entity in which the Corporation has a significant investment, or any combination thereof as the Committee may deem appropriate. Prior to the payment of any award granted as a Qualifying Award, the Committee shall certify in writing that the performance goals were satisfied. The maximum number of shares of Common Stock with respect to which Qualifying Awards may be granted to any participant in any calendar year shall be 50,000 shares of Common Stock, subject to adjustment as provided in Section 7(a) hereof.

     (c) Time and Deferral of Payments. At the time the Committee grants each award under the Plan, the Committee shall specify in writing the time (which time may be a specific date or event, or the time of satisfaction of any performance goals or other condition imposed by the Committee) of the payment of the award. In awarding any right to receive cash and/or shares of Common Stock, the

Committee may also specify that the payment of all or any portion of such cash and/or shares of Common Stock may at the election of the participant be deferred until a later date. Deferrals shall be for such periods and upon such other terms as the Committee may determine, all of which terms (including the amount (or method for determining the amount) of the deferrals payable, the time when such deferrals shall be payable and the terms and conditions of, and any limitations on changes to, such elections) shall be set forth in the award agreement, which terms and any changes to such terms, shall comply with the requirements of Section 409A of the Code and, in the case of any Qualifying Award, shall comply with the requirements of Section 162(m) of the Code.

     (d) Vesting, Other Performance Requirements and Forfeiture. In awarding any Options or any rights to receive cash and/or shares of Common Stock (including Qualifying Awards), the Committee (i) may specify that the right to exercise such Options or the right to receive payment of such cash and/or shares of Common Stock shall be conditional upon the fulfillment of specified conditions, including, without limitation, completion of specified periods of service in the employ of the Corporation or its subsidiaries, and the achievement of specified business and/or personal performance goals, and (ii) may provide for the forfeiture of all or any portion of any such Options or rights in specified circumstances. The Committee may also specify by whom and/or in what manner the accomplishment of any such performance goals shall be determined and may waive or modify any such performance goals or conditions.

     (e) Agreements. Any award under the Plan may, in the Committee’s discretion, be evidenced by an agreement at the time of grant of the award or thereafter, which, subject to the provisions of the Plan, may contain such terms and conditions as may be approved by the Committee, and shall be executed by an officer on behalf of the Corporation; provided that in the event that payment of any award may be deferred as provided in Section 4(c) hereof, the award must be evidenced by an award agreement.

     5. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to adjustment as provided in Section 7(a) hereof, the number of shares of Common Stock which may be paid to participants under the Plan and/or purchased pursuant to Options granted under the Plan shall not exceed an aggregate of 300,000 shares. For this purpose, awards based upon, or measured by, the value or changes in the value of shares of Common Stock (whether paid in cash or shares of Common Stock), any shares of Common Stock retained by the Corporation in satisfaction of the participant’s obligation for withholding taxes, and shares of Common Stock not issued as a result of a net exercise of an Option shall be treated as shares of Common Stock paid to participants. If any award shall be forfeited or otherwise terminates (in whole or in part) or an Option shall expire or terminate unexercised, the shares of Common Stock covered thereby shall remain available under the Plan for payment to participants. Shares to be delivered or purchased under the Plan may be either authorized but unissued shares of Common Stock or shares of Common Stock held by the Corporation as treasury shares. Any shares of Common Stock issued by the Corporation through the assumption or substitution of outstanding grants in connection with the acquisition of another entity shall not reduce the maximum number of shares available for delivery under the Plan.

     6. OPTIONS.

     (a) Term of Options. The term of any Option shall be determined by the Committee, but in no event shall any Option be exercisable more than ten years after the date on which it was granted. The Committee may grant options intended to qualify as incentive stock options under Section 422 of the Code, and Options not intended so to qualify; provided, however, that Options intended to qualify as incentive stock options may only be granted to employees of the Corporation and any subsidiary corporation (within the meaning of Section 424(f) of the Code).

     (b) Option Price; Fair Market Value. The price (“Option Price”) at which shares of Common Stock may be purchased pursuant to any Option shall be determined by the Committee at the time the Option is granted, but in no event shall the Option Price be less than 100 percent of the Fair Market Value of such shares on the date the Option is granted. For purposes of the Plan, Fair Market Value is the closing sales prices of the Common Stock on the relevant date as reported on the stock exchange or market on which the Common Stock is primarily traded, or, if no sale is made on such date, then Fair Market Value is the weighted average of the closing sales prices of the Common Stock on the next preceding day and the next succeeding day on which such sales were made as reported on the stock exchange or market on which the Common Stock is primarily traded.

     (c) Payment Upon Exercise. Upon exercise of an Option, the Option Price shall be payable to the Corporation in cash, or, at the discretion of the Committee, in shares of Common Stock valued at the Fair Market Value thereof on the date of payment, or in a combination of cash and shares of Common Stock.

     (d) Surrender of Options. The Corporation may, if the Committee so determines, accept the surrender by a participant, or the personal representative of a participant, of an Option, in consideration of a payment by the Corporation equal to the difference obtained by subtracting the aggregate Option Price from the aggregate Fair Market Value of the Common Stock covered by the Option on the date of such surrender, such payment to be in cash, or, if the Committee so provides, in shares of Common Stock valued at Fair Market Value on the date of such surrender, or partly in shares of Common Stock and partly in cash.

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     7. DILUTION AND OTHER ADJUSTMENTS.

     (a) Changes in Capital Structure. In the event of any corporate transaction involving the Corporation (including, without limitation, any subdivision or combination or exchange of the outstanding shares of Common Stock, stock dividend, stock split, spin-off, split-off, recapitalization, capital reorganization, liquidation, reclassification of shares of Common Stock, merger, consolidation, extraordinary cash or other distributions, stock repurchases or redemption at prices in excess of book value per share, stock issuances or sales at prices less than book value per share or sale, lease or transfer of substantially all of the assets of the Corporation or other event similar in type or effect to an event herein listed), the Board of Directors of the Corporation shall make such equitable adjustments as it may deem appropriate in the Plan and the awards thereunder, including, without limitation, an adjustment in the total number of shares of Common Stock which may thereafter be delivered or purchased under the Plan, in the maximum number of shares of Common Stock with respect to which awards may be granted to any participant in any year under Section 4(b) hereof and in any performance goals. Agreements evidencing Options may include such provisions as the Committee may deem appropriate with respect to the adjustments to be made to the terms of such Options upon the occurrence of any of the foregoing events.

     (b) Tender Offers and Exchange Offers. In the event of any tender offer or exchange offer, by any person other than the Corporation, for shares of Common Stock, the Committee may make such adjustments in outstanding awards and authorize such further action as it may deem appropriate to enable the recipients of outstanding awards to avail themselves of the benefits of such offer, including, without limitation, acceleration of the exercise date of outstanding Options so that they become immediately exercisable in whole or in part, or offering to acquire all or any portion of specified categories of Options for a price determined pursuant to Section 6(d) hereof, or acceleration of the payment of outstanding awards payable, in whole or in part, in shares of Common Stock.

     (c) Limits on Discretion to Make Adjustments. Notwithstanding any provision of this Section 7 to the contrary, no adjustment shall be made in any outstanding Qualifying Awards to the extent that such adjustment would adversely affect the status of that Qualifying Award as “performance-based compensation” under Section 162(m) of the Code.

     8. MISCELLANEOUS PROVISIONS.

     (a) Right to Awards. No employee or other person shall have any claim or right to be granted any award under the Plan.

     (b) Rights as Stockholders. A participant shall have no rights as a holder of Common Stock by reason of awards under the Plan, unless and until certificates for shares of Common Stock are issued to the participant.

     (c) No Assurance of Employment. Neither the Plan nor any action taken thereunder shall be construed as giving any employee any right to be retained in the employ of the Corporation or any subsidiary.

     (d) Costs and Expenses. All costs and expenses incurred in administering the Plan shall be borne by the Corporation.

     (e) Unfunded Plan. The Plan shall be unfunded. The Corporation shall not be required to establish any special or separate fund nor to make any other segregation of assets to assure the payment of any award under the Plan.

     (f) Withholding Taxes. The Corporation shall have the right to deduct from all awards hereunder paid in cash any federal, state, local or foreign taxes required by law to be withheld with respect to such payments and, with respect to awards paid in stock, to require the payment (through withholding from the participant’s salary or otherwise) of any such taxes, but the Committee may make such arrangements for the payment of such taxes as the Committee in its discretion shall determine, including payment with shares of Common Stock (including net payments of awards paid in Common Stock).

     (g) Limits on Transferability. No awards under the Plan nor any rights or interests therein shall be pledged, encumbered, or hypothecated to, or in favor of, or subject to any lien, obligation, or liability of a participant to, any party, other than the Corporation or any subsidiary, nor shall such awards or any rights or interests therein be assignable or transferable by the recipient thereof except, in the event of the recipient’s death, to his designated beneficiary as hereinafter provided, or by will or the laws of descent and distribution. During the lifetime of the recipient, awards under the Plan requiring exercise shall be exercisable only by such recipient or by the guardian or legal representative of such recipient. Notwithstanding the foregoing, the Committee may, in its discretion, provide that awards granted pursuant to the Plan (other than an option granted as an incentive stock option) be transferable, without consideration, to a participant’s immediate family members (i.e., children, grandchildren or spouse), to trusts for the benefit of such

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immediate family members and to partnerships in which such family members are the only partners. The Committee may impose such terms and conditions on such transferability as it may deem appropriate.

     (h) Beneficiary. Any payments on account of awards under the Plan to a deceased participant shall be paid to such beneficiary as has been designated by the participant in writing to the Secretary of the Corporation or, in the absence of such designation, according to the participant’s will or the laws of descent and distribution.

     (i) Nature of Benefits. Awards under the Plan, and payments made pursuant thereto, are not a part of salary or base compensation.

     (j) Compliance with Legal Requirements. The obligation of the Corporation to issue or deliver shares of Common Stock upon exercise of Options or otherwise shall be subject to satisfaction of all applicable legal and securities exchange requirements, including, without limitation, the provisions of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. The Corporation shall endeavor to satisfy all such requirements in such a manner as to permit at all times the exercise of all outstanding Options in accordance with their terms, and to permit the issuance and delivery of shares of Common Stock whenever provided for by the terms of any award made under the Plan.

     9. AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors of the Corporation, without the consent of any participant, may at any time terminate or from time to time amend the Plan in whole or in part; provided, however, that no such action shall adversely affect any rights or obligations with respect to any awards theretofore made under the Plan; and provided, further, that no amendment, without approval of the holders of Common Stock by an affirmative vote of a majority of the shares of Common Stock voted thereon in person or by proxy, shall (i) increase the aggregate number of shares subject to the Plan (other than increases pursuant to Section 7 hereof), (ii) extend the period during which awards may be granted under the Plan, (iii) increase the maximum term for which Options may be issued under the Plan, (iv) decrease the minimum Option Price at which Options may be issued under the Plan, or (v) materially modify the requirements for eligibility to participate in the Plan. With the consent of the participants affected, the Committee may amend outstanding agreements evidencing awards under the Plan, and may amend the terms of awards not evidenced by such agreements, in any manner not inconsistent with the terms of the Plan.

     10. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective when approved at the annual meeting of stockholders (the “Annual Meeting”) by a majority of the voting power of the Voting Stock (all as defined in the Corporation’s Restated Certificate of Incorporation) present in person or represented by proxy and entitled to vote at such Annual Meeting. The Plan shall terminate on the date of the Annual Meeting in 2012, unless sooner terminated by action of the Board of Directors of the Corporation. No award may be granted hereunder after termination of the Plan, but such termination shall not affect the validity of any award then outstanding.

     11. LAW GOVERNING. The validity and construction of the Plan and any agreements entered into thereunder shall be governed by the laws of the State of New York, but without regard to the conflict laws of the State of New York except to the extent that such conflict laws require application of the laws of the State of Delaware.

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EX-99.1

Exhibit 99.1

     NEW YORK, NY, April 26, 2007 — Stockholders’ equity per common share of Alleghany Corporation (NYSE-Y) at March 31, 2007 was $271.60, an increase of 3.8% from stockholders’ equity per common share of $261.59 at December 31, 2006 (all as adjusted for the stock dividend declared in February 2007), Weston M. Hicks, President and chief executive officer of Alleghany, announced today. Alleghany’s net earnings in the 2007 first quarter were $106.4 million, or $11.90 per common share (presented on a diluted basis throughout), compared with net earnings of $59.2 million, or $7.21 per common share, in the first quarter of 2006. On a consolidated basis, cash and invested assets were approximately $4.35 billion at March 31, 2007, an increase of 5.4% from approximately $4.13 billion at December 31, 2006.

     Highlights of Alleghany’s results for the three months ended March 31, 2007 and 2006 are as follows:

							Per Share(1)
(in millions, except for per share and share amounts)	2007			2006			2007			2006
Net earnings	$	106.4		$	59.2		$	11.90		$	7.21
Adjustments:
Add: Net catastrophe losses after tax		0.2			0.6			0.02			0.07
Deduct: Net realized capital gains		(32.6	)		(4.5	)		(3.64	)		(0.55	)
Net earnings, as adjusted (2)	$	74.0		$	55.3		$	8.28		$	6.73
Average number of outstanding shares of common stock on a diluted basis (3)								8,950,071			8,222,026

(1)	Represents diluted earnings per share of common stock and includes the impact on net earnings resulting from the inclusion of dilutive securities under the “if-converted method.”
(2)	Adjusted to exclude net catastrophe losses after tax and realized capital gains.
(3)	Adjusted to reflect the dividend of common stock declared in February 2007.

     The comparative contributions to earnings before taxes and minority interest made by Alleghany Insurance Holdings LLC (“AIHL,” a holding company for Alleghany’s property and casualty insurance operating units consisting of RSUI Group, Inc. (“RSUI”), Capitol Transamerica Corporation (“CATA”) and Darwin Professional Underwriters, Inc. (“Darwin”), as well as AIHL’s subsidiary AIHL Re LLC (“AIHL Re”)), and corporate activities (consisting of Alleghany Properties LLC and corporate activities at the parent level), were as follows (in millions):

	Three Months Ended March 31,
	2007		2006
AIHL	$	99.9	$	70.8
Corporate activities		59.9	($	2.3	)
Total	$	159.8	$	68.5

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     The comparative pre-tax contributions to AIHL’s results made by its operating units RSUI, CATA and Darwin and its AIHL Re subsidiary for the three months ended March 31, 2007 and 2006 were as follows (in millions, except ratios):

	RSUI			AIHL Re			CATA			Darwin			Total AIHL
2007
Gross premiums written	$	288.9		$	—		$	52.7		$	74.3		$	415.9
Net premiums written		156.4			—			50.6			48.9			255.9
Net premiums earned (1)		166.6			17.7			47.3			40.0			271.6
Loss and loss adjustment expenses		76.4			—			20.7			25.5			122.6
Underwriting expenses (2)		39.9			0.1			19.6			11.7			71.3
Underwriting profit (3)	$	50.3		$	17.6		$	7.0		$	2.8			77.7
Net investment income (1)														40.0
Net realized capital losses (1)														(5.8	)
Other income (1)														0.1
Other expenses (2)														(12.1	)
Earnings before income taxes and minority interest													$	99.9
Loss ratio (4)		45.9	%		0.0	%		43.8	%		63.7	%		45.1	%
Expense ratio (5)		24.0	%		0.3	%		41.5	%		29.1	%		26.2	%
Combined ratio (6)		69.9	%		0.3	%		85.3	%		92.8	%		71.3	%
2006
Gross premiums written	$	295.5			—		$	44.3		$	59.9		$	399.7
Net premiums written		162.7			—			42.2			36.8			241.7
Net premiums earned (1)	$	162.1		$	—		$	41.2		$	27.3		$	230.6
Loss and loss adjustment expenses		83.7			—			19.6			19.2			122.5
Underwriting expenses (2)		31.8			—			18.3			7.3			57.4
Underwriting profit (3)	$	46.6		$	—		$	3.3		$	0.8			50.7
Net investment income (1)														24.9
Net realized capital gains (1)														4.6
Other income (1)														0.8
Other expenses (2)														(10.2	)
Earnings before income taxes and minority interest													$	70.8
Loss ratio (4)		51.7	%		—	%		47.5	%		70.6	%		53.1	%
Expense ratio (5)		19.6	%		—	%		44.5	%		26.5	%		24.9	%
Combined ratio (6)		71.3	%		—	%		92.0	%		97.1	%		78.0	%

(1)	Represent components of total revenues.
(2)	Underwriting expenses represent commission and brokerage expenses and that portion of salaries, administration and other operating expenses directly attributable to underwriting activities, whereas the remainder constitutes other expenses.
(3)	Represents net premiums earned less loss and loss adjustment expenses and underwriting expenses, all as determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and does not include net investment income and other income or net realized capital gains. Underwriting profit does not replace net income determined in accordance with GAAP as a measure of profitability; rather, we believe that underwriting profit, which does not include net investment income and other income or net realized capital gains, enhances the understanding of AIHL’s insurance operating units’ operating results by highlighting net income attributable to their underwriting performance. With the addition of net investment income and other income and net realized capital gains, reported pre-tax net income (a GAAP measure) may show a profit despite an underlying underwriting loss. Where underwriting losses persist over extended periods, an insurance company’s ability to continue as an ongoing concern may be at risk. Therefore, we view underwriting profit as an important measure in the overall evaluation of performance.
(4)	Loss and loss adjustment expenses divided by net premiums earned, all as determined in accordance with GAAP.
(5)	Underwriting expenses divided by net premiums earned, all as determined in accordance with GAAP.

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(6) The sum of the loss ratio and expense ratio, all as determined in accordance with GAAP, representing the percentage of each premium dollar an insurance company has to spend on losses (including loss adjustment expenses) and underwriting expenses.

     RSUI’s underwriting profit for the 2007 first quarter increased from the corresponding 2006 period, primarily reflecting an increase in net premiums earned and lower property losses incurred, partially offset by higher underwriting expenses primarily due to higher salary and benefit expenses, and lower ceding commissions on RSUI’s property surplus share reinsurance arrangements. AIHL Re’s underwriting profit in the 2007 first quarter reflects the minimal catastrophe losses during the 2007 first quarter.

     CATA’s 2007 first quarter underwriting profit increased from the corresponding 2006 period, primarily reflecting a $3.4 million release of prior year commercial surety and property loss reserves and an increase in net premiums earned, partially offset by increases in loss and loss adjustment and underwriting expenses as a result of growth in CATA’s property and casualty and commercial surety lines of business.

     Darwin’s underwriting profit for the 2007 first quarter increased from the corresponding 2006 period, primarily reflecting an increase in net premiums earned and a release of prior year loss reserves and associated adjustment to ceded reinsurance premiums totaling $1.2 million, partially offset by increases in loss and loss adjustment expenses and underwriting expenses related to the growth of Darwin’s business.

     AIHL’s net investment income increased in the 2007 first quarter from the corresponding period in 2006, primarily reflecting strong underwriting cash flow and slightly higher average investment yields during the 2007 period. AIHL’s $5.8 million net realized capital loss in the 2007 first quarter reflects $6.6 million of unrealized losses related to AIHL’s mortgage- and asset-backed bond portfolio that were deemed to be other than temporary, partially offset by $0.8 of net realized capital gains on the sale of securities by AIHL.

     Highlights of results for corporate activities during the three months ended March 31, 2007 and 2006 were as follows (in millions):

	Three months ended March 31,
	2007		2006
Revenues	$	69.7	$	7.9
Other operating expenses		1.1		0.7
Corporate administration expense		8.0		8.4
Interest expense		0.7		1.1
Earnings before income taxes and minority interest	$	59.9	$	(2.3	)

     Corporate activities’ 2007 first quarter results primarily reflect $55.9 million of net realized capital gains resulting from the sale of 809,000 shares of common stock of Burlington Northern Santa Fe Corporation, compared with $2.4 million of net realized capital gains in the first quarter of 2006, as well as a pre-tax gain of approximately $7.2 million due to the sale by Alleghany Properties of certain real estate assets.

7

Comment on Regulation G

          This press release includes certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures are included herein. Throughout this press release Alleghany presents its operations in the way it believes will be most meaningful and useful to the investing public and others who use such information in evaluating Alleghany’s results.

          In addition to the GAAP presentations of net earnings (loss), Alleghany also shows net earnings (loss) as adjusted to exclude both net catastrophe losses after tax and net realized capital gains after tax, a non-GAAP financial measure, which is intended to assist investors in analyzing the impact of such items and represents the way management analyzes Alleghany’s results. Catastrophe losses and net realized capital gains can fluctuate significantly from period to period, which could distort the analysis of trends and comparability of reported periods.

          Investors should consider these non-GAAP measures in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP.

# # #

Forward-looking Statements

          This release contains disclosures which are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. These forward-looking statements are based upon our current plans or expectations and are subject to a number of uncertainties and risks that could significantly affect current plans, anticipated actions and our future financial condition and results. These statements are not guarantees of future performance, and we have no specific intention to update these statements. The uncertainties and risks include, but are not limited to, risks relating to our insurance operating units such as

• significant weather-related or other natural or human-made catastrophes and disasters;

• the cyclical nature of the property and casualty industry;

• the long-tail and potentially volatile nature of certain casualty lines of business written by our insurance operating units;

• the cost and availability of reinsurance;

• exposure to terrorist acts;

• the willingness and ability of our insurance operating units’ reinsurers to pay reinsurance recoverables owed to our insurance operating units;

• changes in the ratings assigned to our insurance operating units;

• claims development and the process of estimating reserves;

• legal and regulatory changes;

• the uncertain nature of damage theories and loss amounts;

• increases in the levels of risk retention by our insurance operating units; and

• adverse loss development for events insured by our insurance operating units in either the current year or in prior years.

8

     Additional risks and uncertainties include general economic and political conditions, including the effects of a prolonged U.S. or global economic downturn or recession; changes in costs; variations in political, economic or other factors; risks relating to conducting operations in a competitive environment; effects of acquisition and disposition activities, inflation rates or recessionary or expansive trends; changes in market prices of our significant equity investments; extended labor disruptions, civil unrest or other external factors over which we have no control; and changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at our discretion. As a consequence, current plans, anticipated actions and future financial condition and results may differ from those expressed in any forward-looking statements made by us or on our behalf.

9

ALLEGHANY CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)

	THREE MONTHS ENDED 3/31/07							THREE MONTHS ENDED 3/31/06
	ALLEGHANY							ALLEGHANY
	INSURANCE			CORPORATE				INSURANCE		CORPORATE
	HOLDINGS			ACTIVITIES		COMBINED		HOLDINGS		ACTIVITIES			COMBINED
Revenues
Net premiums earned	$	271,571		$	0	$	271,571	$	230,582	$	0		$	230,582
Net investment income		40,000			5,169		45,169		24,896		4,417			29,313
Realized capital (losses) gains		(5,769	)		55,910		50,141		4,574		2,409			6,983
Other income		107			8,618		8,725		836		1,101			1,937
Total revenues		305,909			69,697		375,606		260,888		7,927			268,815
Costs and expenses
Loss and loss adjustment expenses		122,604			0		122,604		122,530		0			122,530
Commissions and brokerage		71,278			0		71,278		57,385		0			57,385
Other operating expenses		12,127			1,039		13,166		10,114		715			10,829
Corporate administration		3			8,001		8,004		0		8,423			8,423
Interest expense		0			723		723		0		1,101			1,101
Total costs and expenses		206,012			9,763		215,775		190,029		10,239			200,268
Earnings (loss) before income taxes and minority interest	$	99,897		$	59,934		159,831	$	70,859	$	(2,312	)		68,547
Income taxes							51,056							9,341
Earnings before minority interest							108,775							59,206
Minority interest, net of taxes							2,357							0
Net earnings						$	106,418						$	59,206
Net earnings						$	106,418						$	59,206
Preferred dividends							4,306							0
Net earnings available to common stockholders						$	102,112						$	59,206

ALLEGHANY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	MARCH 31,		DECEMBER 31,
	2007		2006
ASSETS
Available for sale securities at fair value:
Equity securities	$	903,629	$	872,900
Debt securities		2,819,257		2,622,307
Short-term investments		426,204		438,567
		4,149,090		3,933,774
Other invested assets		164,862		123,651
Total investments		4,313,952		4,057,425
Cash		33,260		68,332
Notes receivable		0		91,536
Premium balances receivable		210,302		222,958
Reinsurance recoverables		1,008,767		1,067,926
Ceded unearned premium reserves		306,132		324,988
Deferred acquisition costs		81,702		80,018
Property and equipment — at cost, net of accumulated depreciation and amortization		18,038		18,404
Goodwill and other intangibles, net of amortization		157,972		159,772
Other assets		80,930		87,381
	$	6,211,055	$	6,178,740
LIABILITIES AND STOCKHOLDERS’ EQUITY
Losses and loss adjustment expenses	$	2,308,082	$	2,304,644
Unearned premiums		851,979		886,539
Reinsurance payable		99,853		114,454
Net deferred tax liabilities		32,899		62,937
Subsidiaries’ debt		0		80,000
Current taxes payable		104,904		29,499
Minority interest		80,232		77,875
Other liabilities		221,321		199,546
Total liabilities		3,699,270		3,755,494
Stockholders’ equity		2,511,785		2,423,246
	$	6,211,055	$	6,178,740
COMMON SHARES OUTSTANDING (adjusted for stock dividends)		8,145,532		8,118,479