In the first half of 2012, there have been about $3.6 billion of catastrophe bonds issued — the most since the record-breaking volume issued in the first half of 2007, according to reinsurer Swiss Re. The first half of 2011, by contrast, only saw half as much action, with just $1.8 billion issued in cat bonds. For perspective, 2012 beat that number in just the second quarter, which had .

1 billion in volume, the second-highest Q2 total on record for an insurance-linked securities (ILS) market that Swiss Re believes will only continue to grow.

“We remain optimistic regarding new issuance for 2012,” writes Swiss Re in its insurance-linked securities market update. “It remains clear that sponsors view the ILS market as an important part of their risk management programs, and as a source of multi-year collateralized reinsurance protection. The broad investor base sees value in a diversifying and non-correlated asset class. Due to these factors, the ILS market is likely to continue to grow in the future.”

Hurricane risk has overwhelmingly been the most common peril (used as the trigger in 23 of the 28 tranches issued so far this year), and Swiss Re believes that this year’s uptick in interest from investors is due to their willingness to use cat bonds to diversify their portfolios due to the fact that price levels are “increasingly competitive with traditional reinsurance.”