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                                                                    Exhibit 10.2
                                                      [Form of Option Agreement]

                              ALLEGHANY CORPORATION
                        DIRECTOR'S STOCK OPTION AGREEMENT

            THIS AGREEMENT, made as of April __, 200_, between Alleghany
Corporation, a Delaware corporation ("Alleghany"), and ________________, a
non-employee member of Alleghany's Board of Directors (the "Director").

            WHEREAS, in order to encourage increased stock ownership by the
non-employee directors of Alleghany, Alleghany has adopted the Alleghany
Corporation 2005 Directors' Stock Plan (the "Plan").

            NOW, THEREFORE, in consideration of the covenants and agreements
herein contained, the parties hereto hereby agree as follows:

            1. Grant. Alleghany hereby grants to the Director an option (the
            "Option") to purchase 500 shares (the "Option Shares") of Alleghany
            common stock, par value $1.00 per share ("Alleghany Common Stock"),
            at $_____ per share (the "Option Price").

            2. Manner of Exercise. Subject to the provisions of the Plan, the
            Option may be exercised at any time during the period hereinafter
            permitted by written notice to Alleghany stating the number of
            shares with respect to which it is being exercised and accompanied
            by payment of the Option Price (a) in United States dollars by cash
            or check, or (b) by tendering to Alleghany shares of Alleghany
            Common Stock owned by the Director and having a Fair Market Value
            (as defined in the Plan) equal to the cash exercise price applicable
            to the Option, or (c) directing Alleghany to withhold the number of
            shares issuable upon exercise having a Fair Market Value equal to
            the Option Price, or (d) by a combination of United States dollars,
            owned shares of Alleghany Common Stock and shares issuable upon
            exercise as aforesaid. It shall be a condition to the obligation of
            Alleghany to issue shares of Alleghany Common Stock upon exercise of
            the Option that the Director (or any other person entitled to
            exercise the Option as provided in Paragraph 4 hereof) pay to
            Alleghany, upon demand by Alleghany, such amount as may be

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            requested by Alleghany for the purpose of satisfying any liability
            to withhold federal, state, local or foreign income or other taxes,
            and if the amount requested is not paid Alleghany may refuse to
            issue shares of Alleghany Common Stock.

            3. Timing of Exercise; Term. The Option shall not be exercisable
            before the expiration of one year from the date hereof or after the
            expiration of ten years from the date hereof and may be exercised
            during such period as follows: one-third (33-1/3 percent) of the
            total number of shares of Common Stock covered by the Option shall
            become exercisable each year beginning with the first anniversary of
            the date hereof; provided that the Option shall automatically become
            immediately exercisable in full when the Director ceases to be a
            non-employee director of Alleghany for any reason other than
            resignation as a director prior to the next Annual Meeting
            succeeding the date hereof. If the Director resigns as a
            non-employee director of Alleghany prior to the next Annual Meeting
            succeeding the date hereof, the Option shall terminate
            simultaneously with his resignation.

            4. Transferability and Sale. To the extent that the Option is not
            exercisable, the Option shall not be transferable by the Director
            otherwise than by will or the laws of descent and distribution, and
            shall be exercisable during his lifetime only by him. To the extent
            that the Option is exercisable, the Option may be transferred,
            without consideration, to the Director's immediate family members
            (i.e., children, grandchildren or spouse), to trusts for the benefit
            of the Director's immediate family members and to partnerships in
            which the only partners are the Director's immediate family members.
            In all cases, the instrument of transfer of the Option shall be
            approved by, and shall contain such conditions, restrictions and
            agreements relating to any further transfer or exercise of the
            Option as may be required by, the general counsel of Alleghany.

            5. Requirement of Continuing Service. The Option shall not be
            exercisable unless the Director has been, at all times during the
            period beginning with the date of grant of the Option and ending on
            the date of such exercise, a non-employee director of Alleghany,
            except that:

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            (A) if the Director shall cease to be such a non-employee director
            for reasons other than death and such Option has not terminated or
            expired and has not been fully exercised, the person exercising the
            Option, at any time within one year of the date the Director ceased
            to be a non-employee director but not thereafter (and in no event
            after the Option has expired under the provisions of Paragraph 3
            hereof), may exercise the Option with respect to any shares of
            Common Stock as to which the Option has not been exercised on the
            date the Director ceased to be such a non-employee director; and

            (B) if the Director shall die and the Option has not been fully
            exercised, the person holding the Option may, at any time within one
            year after the date of the death of the Director but not thereafter
            (and in no event after the Option has expired under the provisions
            of Paragraph 3 hereof), exercise the Option with respect to any
            shares of Common Stock as to which the Director could have exercised
            the Option at the time of his death (in the absence of any permitted
            transfer of the Option).

            6. No Rights as a Stockholder. The Director (and any person
            succeeding to the Director's rights pursuant to this Agreement)
            shall have no rights as a stockholder with respect to any shares of
            Alleghany Common Stock issuable pursuant to the Option until the
            date of the issuance of a stock certificate for such shares to the
            Director (or successor). Except as provided in the Plan, no
            adjustment shall be made for dividends, distributions or other
            rights (whether ordinary or extraordinary, and whether in cash,
            securities or other property) for which the record date is prior to
            the date such stock certificate is issued.

            7. Legality of Issuance. Alleghany shall not be obligated to issue
            any Option Shares pursuant to this Agreement unless Alleghany's
            counsel shall be satisfied that such issuance will be in compliance
            with applicable federal, state and other securities laws.

            8. Restrictive Legends on Stock Certificates. Stock certificates
            evidencing Option Shares may bear such restrictive legends as
            Alleghany's counsel may deem necessary or advisable under applicable
            law or pursuant to this Agreement.

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            9. Plan. The Option is granted subject to all terms and conditions
            of the Plan, which is incorporated herein by reference. In the event
            of any inconsistency between the provisions of this Agreement and
            the provisions of the Plan, the provisions of the Plan shall govern.

            10. Tax Advice. Alleghany makes no warranties or representations
            with respect to the income tax consequences of the transactions
            contemplated by this Agreement.

            11. Acceptance of Terms. By acceptance of this Option, the Director
            indicates his acceptance and ratification of, and his consent to,
            the terms and conditions of this Agreement, the Plan and any action
            taken under the Plan by Alleghany or the Board of Directors of
            Alleghany.

            IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.

                                           ALLEGHANY CORPORATION



                                           By:  ________________________


                                           _____________________________
                                           Director