(Recasts; adds CEO's comments, details)

By Ratul Ray Chaudhuri

BANGALORE, March 31 (Reuters) - Risk-advisory firm RiskMetrics Group Inc (RMG.N: Quote, Profile, Research), which made its market debut in January, reported fourth-quarter earnings in line with market expectations, as higher revenue was offset by an increase in expenses.

Shares of RiskMetrics, which advises thousands of companies on how to navigate risk, fell 10 percent in trading after the bell.

Higher market volatility and the market's need for risk systems have increased the demand for the company's products, Chief Executive Ethan Berman said in a statement.

This has resulted in an increase of more than 30 percent in average contract value and a renewal rate of 91.4 percent, he said.

"We expect these trends to continue into the new year as institutions focus on implementing enhanced risk systems," Berman said.

The company continues to add employees, resulting in increased compensation expenses, he said by phone.

For the quarter, RiskMetrics earned $1.2 million, or 2 cents a share, compared with $3.7 million, or 7 cents a share, a year ago.