The body underlies our sense of self, emotion, and agency. Signals arising from the skin convey warmth, social touch, and the physical characteristics of external stimuli. Surprising or unexpected tactile sensations can herald events of motivational salience, including imminent threats (e.g., an insect bite) and hedonic rewards (e.g., a caressing touch). Awareness of such events is thought to depend upon the hierarchical integration of body-related mismatch responses by the anterior insula. To investigate this possibility, we measured brain activity using functional magnetic resonance imaging, while healthy participants performed a roving tactile oddball task. Mass-univariate analysis demonstrated robust activations in limbic, somatosensory, and prefrontal cortical areas previously implicated in tactile deviancy, body awareness, and cognitive control. Dynamic Causal Modelling revealed that unexpected stimuli increased the strength of forward connections along a caudal to rostral hierarchy—projecting from thalamic and somatosensory regions towards insula, cingulate and prefrontal cortices. Within this ascending flow of sensory information, the AIC was the only region to show increased backwards connectivity to the somatosensory cortex, augmenting a reciprocal exchange of neuronal signals. Further, participants who rated stimulus changes as easier to detect showed stronger modulation of descending PFC to AIC connections by deviance. These results suggest that the AIC coordinates hierarchical processing of tactile prediction error. They are interpreted in support of an embodied predictive coding model where AIC mediated body awareness is involved in anchoring a global neuronal workspace.