Specifically an artist who creates illustrations for publications such as novels, magazines, or textbooks.
As a famous illustrator, she has worked on the pictures for many children's books.
イラストレーター is a broader term for any illustrator, often used in commercial or modern contexts, while 挿絵画家 specifically refers to an artist who draws illustrations for printed publications.
Compound of 挿絵 (sashie, 'illustration inserted in a text') and 画家 (gaka, 'painter, artist').