Genworth Financial experienced a second quarter of elevated claims from lenders that arose from borrower defaults, with the specialist insurance company expecting only a modest improvement over the remainder of this year.Last night Genworth published its second detailed quarterly update in a row on the issues facing its business in Australia, a level of disclosure motivated by the need to inform restless US investors.The firm's interest in reviving its options for a sell-down of its local subsidiary will be another consideration.The insurer said it paid out 770 claims in Australia during the June quarter, down from 852 in the March quarter. The average size of each claim paid out increased to A$91,000 in June, up from $77,000 in March.Borrowers getting into strife fall into the same categories outlined four months ago. They include the self-employed and those running small businesses in general, and small business owners that took out loans in 2007 and 2008 in particular. Borrowers in Queensland in general and in coastal Queensland in particular remain a prominent source of claims.Genworth said there was a rise in the percentage of loans in long-term arrears ending up in default.On the other hand, the insurer said there were improving trends to be seen in the portfolio over the second quarter, as more borrowers in arrears (presumably, at relatively early stages) managed to catch up with their repayments.Genworth said 0.52 per cent of insured loans were in arrears at the end of June, down two basis points from March.While the firm must grapple with an elevated level of defaults, it is reporting profits once again, after a one-off loss in March quarter. Genworth reported a net profit in Australia for the June 2012 quarter of US$44 million, down from US$54 million in the corresponding quarter of 2011.Four months ago Genworth reported a loss of US$21 million in the March 2012 quarter. A review of troubled loans for that quarter led to a rise in reserves of US$131 million, which was more than three times the average level for each quarter in 2011.Genworth said that new insurance written in Australia over the June 2012 quarter increased by eight per cent over the March quarter, and increased by 24 per cent over the June 2011 quarter.The firm said the rise in the refinancing of home loans was helping to prop up business flows.Refinancings of home loans overall were up 16 per cent in the three months to May 2012 compared with the previous year, according to Australian Bureau of Statistics data, which suggests Genworth is faring well.Depending on the percentage of loans refinanced that were previously insured by Genworth, the rise in refinancings should be beneficial to the insurer's bottom line.Genworth's Australian management will hold a briefing for investors and the media this morning to amplify the disclosures released last night.