The insurance-linked securities market continued to see robust activity in the first half of this year, though it's slightly less than last year's record activity in the alternative reinsurance market.

First-quarter issuance totaled $1.70 billion and second-quarter issuance totaled $2.96 billion, Swiss Re Ltd. said in a July report.

The $4.66 billion in first-half catastrophe bond activity was some $1.25 billion short of last year's record first half, according to the Swiss Re report.

Total catastrophe bonds on risk stood at $23.47 billion as of June 30, off 3.3% from year-end 2014, according to Aon Benfield's analysis released last month.

While most of the issuance covered perils such as U.S. hurricanes, U.S. earthquakes, European windstorms and Japanese earthquakes, the market continues to diversify in terms of geography and perils covered.

For example, the first catastrophe bond covering Chinese perils, Panda Re Ltd.'s Series 2015-1, provides $50 million in per occurrence protection from earthquakes in China on an indemnity basis for sponsor China Property & Casualty Reinsurance Co. Ltd.

The deal is the first time cat bond investors have gained exposure to Chinese perils, law firm Mayer Brown L.L.P., which represented China Re, said in a statement.

“We continue to run at a very strong rate despite the fact that it may not be as fast as the rate of deals last year,” said Cory Anger, global head of insurance-linked securities structuring at GC Securities in New York.

“I think the big picture is that the investor assets are still growing, though they are growing at a slower rate,” said Bill Dubinsky, head of ILS at Willis Capital Markets & Advisory in New York.

The market remains attractive to investors and insurers.

“I do see the ILS market continuing to grow,” said Albert Pinzon, of counsel at law firm Locke Lord L.L.P. in New York. “It remains extremely attractive to investors as long as the Federal Reserve is only raising rates at a slow, even level.”

On the other side of the equation, “the insurance market still wants to transfer risk, so the ILS market will continue to grow,” he said.

One reason figures trail last year is that the second quarter of 2014 saw the largest-ever cat bond in Everglades Re Ltd. by Citizens Property Insurance Corp, which provided $1.5 billion in coverage for Florida hurricane risks, said Paul Schultz, CEO of Aon Securities in Chicago.

Citizens returned to the market in the second quarter this year, but Everglades Re II Ltd. placed a substantially lower $300 million, he said.

“If you net those numbers out, then actually the first half of this year looks even better relative to last year,” said Mr. Dubinsky. “Because some deals are multiyear deals, (Citizens has) a $1.5 billion, three-year deal outstanding, and didn't need as much because that $1.5 billion, since there wasn't an event last year, is still available to pay claims this year.”

Such large deals are unusual.

“It's very difficult to have a lot of issuers come along that are going to want to raise $1.5 billion at a single point in time,” said Ms. Anger. “We don't think that because we haven't seen another $1.5 billion issuance that it means the market is not going to continue to grow.”

Another measure of the market's strength is that eight of nine issuers in this year's second quarter were repeat issuers.

“They know the marketplace. They tried it out and they're coming back to do it again, which is clearly a positive in that what they found and the coverage they bought did what it was supposed to do,” said Brad Adderley, a Bermuda-based partner in the corporate department of Appleby law firm.

“Certainly the people who have renewed are happy with the market and what it's providing them,” said Mr. Dubinsky.

Less expensive and quicker to prepare, private catastrophe bond placement also continues to grow alongside the standard 144A cat bond market.

“That continues to grow quite rapidly,” said Ms. Anger.

In 2014, she said, there were 17 deals that raised $562 million in capacity. Through July 10 this year, 18 deals raised $837 million in capacity.

“Clearly, we are seeing continued growth of the application of alternative capital in the form of insurance-linked securities, just not always in the 144A format,” said Ms. Anger.

Indeed, private placement could pave the road toward the standard 144A market.

“The private cat bonds are sometimes a stepping stone for those that could have meaningful needs from the 144A market, so a private cat bond can be a way to step into the 144A market,” said Ms. Anger.