Fiberglass insulation is made from very fine glass fibers that are spun and woven in to a blanket. The glass fibers are so thin that they break easily and often do when they touch, for instance, your arms or hands. The fibers break off and stick in to the skin surface they come in touch with.
The new EcoTouch insulation, by Owens Corning, uses glass fibers that are of a different length and different diameter, and uses a different bio(plant)-based binder. This new insulation causes much less itching.