Which ratio measures the adequacy of the cushion without considering premiums ceded?

The ratio that measures the adequacy of the cushion without considering premiums ceded is the Gross Premiums to Policyholders Surplus. This ratio compares the total premiums collected by an insurer (before any reinsurance transactions) to the policyholders' surplus, which represents the insurer's net worth and financial cushion.

A higher ratio indicates greater reliance on premiums in relation to the surplus available, suggesting a less stable financial position during adverse conditions. This ratio helps assess the insurer's ability to absorb losses before needing to rely on reinsurance or other forms of risk transference, making it a vital measurement for understanding the insurer's financial health and potential risk exposure.

In contrast, other ratios like Loss Ratio and Combined Ratio include losses and expenses in their calculations, which do not focus solely on the available surplus in relation to premiums, and may involve considerations of ceded premiums in their calculations. Overall Ratio 2 also does not specifically measure the cushion relative to premiums without considering reinsurance effects. Hence, Gross Premiums to Policyholders Surplus is the most appropriate choice for evaluating the adequacy of the cushion in isolation.