The catastrophe bond market shows signs of firming despite a record level of issues in the first quarter, says Guy Carpenter in a study of the market.

The reinsurance broker says eight bond issues in the first quarter raised a total of $US1.3 billion ($1.32 billion) and the market is playing an increasingly important role in risk transfer.

It says this could be a record year for cat bond issues, if they raise more than $US7 billion ($7.1 billion).

Guy Carpenter says there is more than enough capacity to support all deals that are priced to reflect market conditions, and that transparency is increasing, along with the number of investors in the market.

But it says the total return across the insurance-linked securities market was flat for the quarter.

The broker found that once bonds are issued, sellers generally outstrip buyers in the secondary market.

Although a few investors sought to sell relatively large portfolios, these were sold promptly at a modest discount, indicating plenty of liquidity.

The research confirms work by Aon Benfield in April that shows record issues for the first quarter, mostly for US hurricanes, earthquakes and European windstorm.