NEW YORK (Reuters) - Willis Group Holdings Ltd., the world's No. 3 insurance broker, on Wednesday said quarterly profit rose, helped by higher premium rates.

The London-based broker, partly owned by buyout firm Kohlberg Kravis & Roberts Co., also took a $170 million hit to shore up its employees' pension fund, and declared its first quarterly divided of 12.5 cents a share.

Willis reported fourth-quarter profit of $118 million, or 70 cents per share, compared with $27 million, or 16 cents per share, a year earlier.

That was boosted by one-time gains related to stock options and the sale of a small claims administration business. Excluding those and other one-time items, the company earned 49 cents a share, compared with 30 cents a share a year earlier. Wall Street expected 47 cents a share, according to analysts polled by research firm Thomson First Call.

Revenue rose 25 percent to $483 million, helped by rising premium rates. Rising rates help Willis as it gets a slice of the insurance premiums it places for clients. Premium hikes should continue "at least" through 2003, Willis said, as it forecast a 25 percent or better rise in operating earnings for the year. That indicates a forecast of $2.02 or more in earnings per share in 2003, ahead of the $1.97 forecast by Wall Street.

As a result of falling investments, Willis said its pension liabilities increased by $170 million in the year, which would reduce shareholders' equity by the same amount.