The white "swashes" could be created as vector objects with a white fill, placed above the words (in the stacking order). The central blue element could be created by a similar but larger vector object, applied with a blend mode. Or you could take the same vector object and apply it as a mask to a copy of the original words (with a blue fill).
You could also take the white swashes and "cut" the text beneath. First, you'd select the type and choose Text > Convert to Paths and then ungroup the result using Modify > Ungroup. Then you'd select the converted text (now composite paths) and the swash vector shapes together and choose Modify > Combine Paths > Punch.
Find an image of a wave you like and paste it inside the text. That's a lot easier than drawing swashes. :-)