A reduction in the proportion of high loan-to-valuation ratio loans being sold in Australia and an increase in the number of delinquent loans hit mortgage insurer Genworth hard during the six months to June, resulting in lower sales, higher claims and a 15 per cent fall in earnings.Genworth Mortgage Insurance Australia reported a net profit of A$135.8 million for the June half - an increase of 20.2 per cent over the previous corresponding period.However, after adjusting for the unrealised gains on the company's investment portfolio the underlying profit fell 15 per cent to $112.9 million.Return on equity for the half was 11.2 per cent - down from 11.9 per cent in the previous corresponding period. On an underlying basis ROE fell from 12 per cent to 11.3 per cent.Gross written premium fell 33.5 per cent to $189.8 million. The impact of the trend to lower LVR lending is twofold; its means lower volumes for mortgage insurers; and the premiums on the business that is written are lower.The company said it expected these conditions to prevail in the second half of the year.The fall in gross written premium also reflected the ongoing impact of the loss of Westpac's business last year.Net claims incurred rose from $49.9 million in the six months to June last year to $75.4 million in the latest half.The company reported higher delinquencies in Queensland, Western Australia and South Australia.Genworth's loss ratio, which calculates net claims as a proportion of net earned premium, rose from 22.1 per cent in the June half last year to 33 per cent in the latest half.Its combined ratio, which calculates claims plus underwriting expenses as a percentage of premium income (a combined ratio of over 100 per cent indicates an underwriting loss), rose from 48.8 per cent to 57.3 per cent over the same period.The company has worked to keep its costs down and it had a win in that department. The expense ratio, which calculates acquisition costs and underwriting expenses as a percentage of net earned premium, fell from 26.7 per cent to 24.4 per cent.