The catastrophe bond market ended 2014 with a busy fourthquarter, resulting in a new industry record of more than $8 billionof 144A property and casualty (P&C) bonds issued for theyear.

The activity followed one of the slowest third quarters sincethe P&C catastrophe bonds were first issued in the mid-1990s,according to a new briefing and analysis by GC Securities, adivision of MMC Securities Corp. Total risk capital outstanding asof Dec. 31, 2014, was $22.868 billion, which is the highest levelof outstanding risk capital that the market has ever supported.

[Learn more: Whatare catastrophe bonds?]

The briefing noted that seven new sponsors entered the 144AP&C cat bond market in 2014. Of the seven, five were insurers,one was a reinsurer and the other a residual markets insurer. GCSecurities also noted that more than 70% of deals coming to marketin 2014 settled at greater notional value than initiallyexpected.

Of the P&C risk capital in 144A cat bond transactions, 81%were structured with an indemnity trigger on either aper-occurrence, annual aggregate or multi-year aggregate basis. Theuse of indemnity triggers showed a steady increase from a low of30% in 2011 to 55% in 2013.

What’s ahead for 2015?

GC Securities says that pricing levels for first quarter 2015deals will be influenced by the number of bonds maturing.

“January alone will see $2.3 billion of principal returned toinvestors” absent any triggering event, according to the briefing.It remains to be see what effect, if any, events such as WinterStorm Juno in New England will have on these bonds.

The market also is likely to see more innovative and “bespoke”structured catastrophe bonds issued. The structural features thatinvestors are expected to continue to accept on a larger scaleinclude:

• Non-modeled natural perils such as meteorite impact, wildfireand volcanic eruption,
• Manmade perils, including terrorism,
• Longer duration bonds (greater than five years), and
• Increased usage of insurance-linked securities by corporatesponsors.