Ko, who has been at less than her best in 2017 after making several off season changes including caddie, coach and equipment, was 15-under for her final two rounds signalling a return to her dominance of recent years may be at hand.
She made 16 birdies and dropped just one shot in the final two rounds though still finished three behind runaway winner Kerr.
The American veteran blistered the Ko Olina Golf Club in 10-under 62 in round three to set up her charge then backed up with a bogey free 66 in the final round to get to 20-under for the week.
That was good enough for a three shot victory over Ko, reigning Evian Championship winner In Gee Chun and overnight leader Su-Yeon Jang.
Katherine Kirk finished the week as leading Australian after firing a final round 67 to climb 12 places up the leaderboard to T11.
It was a good week for the veteran Queenslander who has shown glimpses of a return to form in 2017 after a slump of sorts in recent years.
But while Kirk will be pleased with her progression this week it was a disappointing final day for defending champion Minjee Lee.
The West Australian couldn’t reproduce the fireworks of last year when she closed with a 63 to win and, after starting the final round 10 shots back, could only manage a 2-under 70.
On a day of low scoring that saw her slip eight places down the standings to T23.
Sarah Jane Smith, the only other Australian to make the cut, posted a final round 72 to remain 1-over for the week and T75.