UPDATE 1-S.Africa's Metropolitan H1 profit up 13 pct

* H1 diluted core headline EPS 70 cents vs 62 cents * Net premiums received up 3 pct to 4.96 bln rand * Shares up 19 pct this year vs 3.5 pct drop in index

JOHANNESBURG, Sept 1 (Reuters) - South African insurer Metropolitan METJ.J reported a 13 percent rise in first-half profit on Wednesday, as a slow economic recovery helped its mainstay low and middle-income customers.

Metropolitan, South Africa's fourth-largest life insurer by market value, said diluted core headline earnings per share totalled 70 cents in the six months to end-June, compared with 62 cents a year earlier.

Headline earnings per share is the main gauge of profit in South Africa and strips out some one-times items.

Net insurance premiums received rose by 3 percent to 4.96 billion rand ($672.8 million).

Metropolitan, which is due to be absorbed by larger rival Momentum, said it was helped by cost cutting and a rise in the value of investments.

South Africa's insurers are mounting a gradual recovery after being hit hard last year by the economic downturn, when fewer customers bought investment products and existing clients allowed policies to lapse.

Metropolitan said in May that it saw "unexpected signs of recovery" in all of its markets during the first quarter.

Africa's biggest economy emerged from a recession last year, but nagging unemployment and debt have crimped consumer demand and weighed on household earnings.

Shares of Metropolitan are up nearly 19 percent so far this year, outperforming a 3.5 percent drop in South Africa's Top-40 index .JTOPI. (Reporting by David Dolan)