Would loft insulation be suitable outdoors (protected mainly from rain) & for swimming pool insulation?

I have an above ground vinyl 10ft pool that I'm building an octagonal wooden frame around to make it 'look pretty' and to be able to sit on the sides. It'd occurred to me that a lot of heat loss (when a pool cover is on top) is through the sides of the pool. If I put loft insulation in the gap between the pool and the wooden outer shell, would this help? The insulation would be mainly protected against rain but a little may leak in / splashing in the pool may get it damp - would it go 'off'?