The best solution for this scenario is to perform forecasting by using claim IDs and dates to identify the expected number of claims in each outcome category every month. This solution has the following advantages:
It leverages the historical data of claim outcomes and dates to capture the temporal patterns and trends of the claims in each category1.
It does not require the claim contents or any other features to make predictions, which simplifies the data preparation and reduces the impact of missing or incomplete data2.
It can handle the high cardinality of the outcome categories, as forecasting models can output multiple values for each time point3.
It can provide predictions for several months in advance, which is useful for planning and budgeting purposes4.
The other solutions have the following drawbacks:
A: Performing classification every month by using supervised learning of the 200 outcome categories based on claim contents is not suitable, because it assumes that the claim contents are available and complete for all the records, which is not the case in this scenario2. Moreover, classification models usually output a single label for each input, which is not adequate for predicting the number of claims in each category3. Additionally, classification models do not account for the temporal aspect of the data, which is important for forecasting1.
B: Performing reinforcement learning by using claim IDs and dates and instructing the insurance agents who submit the claim records to estimate the expected number of claims in each outcome category every month is not feasible, because it requires a feedback loop between the model and the agents, which might not be available or reliable in this scenario5. Furthermore, reinforcement learning is more suitable for sequential decision making problems, where the model learns from its actions and rewards, rather than forecasting problems, where the model learns from historical data and outputs future values6.
D: Performing classification by using supervised learning of the outcome categories for which partial information on claim contents is provided and performing forecasting by using claim IDs and dates for all other outcome categories is not optimal, because it combines two different methods that might not be consistent or compatible with each other7. Also, this solution suffers from the same limitations as solution A, such as the dependency on claim contents, the inability to handle multiple outputs, and the ignorance of temporal patterns123.
1: Time Series Forecasting - Amazon SageMaker
2: Handling Missing Data for Machine Learning | AWS Machine Learning Blog
3: Forecasting vs Classification: What’s the Difference? | DataRobot
4: Amazon Forecast – Time Series Forecasting Made Easy | AWS News Blog
5: Reinforcement Learning - Amazon SageMaker
6: What is Reinforcement Learning? The Complete Guide | Edureka
7: Combining Machine Learning Models | by Will Koehrsen | Towards Data Science
