On the literal level, it is supposed to indicate that she wasn't born of woman, but that doesn't work—even a baby who is born after the mother dies would have a belly button. Therefore, we must look to symbolism. All humans have belly buttons; it is part of our lineage, ever since humans were descended from Adam and Eve. (There is an ongoing debate about whether Adam had a navel; see the some of the websites below for details.)
If Pilate lacks this, she would not be fully human. This would be one reason she might have magical powers, and would align well with the way she seems to stand outside normal human relationships.